JAPANESE PRODUCT TRANSPORTATION COST
A key factor in the ability of U.S. firms to compete
with Japanese firms in the U. S. steel market is the cost of
delivering steel to the United States from Japan. Estimates
of this cost vary.
Kawahito 118, p. 157) reports that conference ship rates
are usually about 20 percent of the f.a.~~vÈlue of steel products at Japanese ports. Kawahito and others have noted, however, that conference rates are an inappropriate measure of
Japanese shipping cost since the bulk of Japanese exports to
tne U.S. travel in non-conference or chartered ships. It is
suspected that sUbstantial discounts are obtained from the
conference rates.
Marcus (21, p. 25) estimates that dock to dock freight
costs for steel products moving between Japan and the U.S.
were 12.3 to 13.7 percent of f.o.b. product values in mid-1974
anå 11.4 to 13.6 in Spring 1975
. To the freight cost Marcus
adds about 2 percent for insurance and brokerage and a 2
percent interest charge. Marcus does not report the source
of his estimate.
PMM (27, p. 26) estimate dock to dock freight plus
insurance from Japan to be about 17.5 percent of the f .a. s.
value of the product. PMM informed the authors that they
based this estimate primarily on the difference between f.a.s.
and c.i.f. values of imports from Japan. Both of these values
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have been reported since 1974 in U.S. Census Bureau report FT
135. The c.i.f. value reported in FT 135 for cold rolled sheet
was 16.3 percent higher than the f.a.s. value in 1974 and 15.2
percent greater in 1975.
Bradford (3, p. 17-18) presents sample freight rates ~7;
which, he informed the authors, were obtained from the records
of a major Japanese trading company. Using cold rolled sheet
as an example, to allow comparison with PMM,. he shows a freight
cost to the east coast of $40.l0/s.t. between January and June
1975. This is about 13 percent of the average f .a.s. value of
cold rolled sheet imported from Japan during those months. !I
This includes loading and unloading but does not include
insurance cost which he estimates to be about one percent of
the value of the product. This same percentage relationship
persisted in March 1977,
according to Bradford's narrative. The
authors have examined a few rate sheets prepared by Japanese
shipping agents, and these confirm the figures presented by
Bradford.
There is another indication that shipping costs may be
somewhat lower than those estimated by PMM. While the difference between f.a.s. and c.i.f~ examined by PMM would seem to
reflect the dock to dock cost of transportation, insurance, and
brokerage, there are other data reported by the U.S. Census
Bureau which give transportation cost directly. In Census
11 About $3l1/net ton as reported by the U.S. Census Bureau
139 J.
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Report FT 246, along with the c.i.f. and f.a.s. data, there is
~nother figure labeled "charges." This figures is defined as
"the aggregate cost of all freight, insurance
and other charges, but not including U,S.
import duties, incurred in bringing the merchandise from alongside the carrier at the
port of exportation in the country of
exporation and placing it alongside the
carr ier at the first port of entry in the
United States. (40, 1974, p. VI).
Tne .charges" for products imported from Japan are consistently lower than the difference betwèènë.i.f. and f.a.s.
For example, the average charges for cold rolled sheet were
8.9 percent of the f.a.s. value in 1974 and 9.4 percent in
1975.
From the definition, it seems likely that these charges
do not include an interest charge and they may exclude some
brokerage costs, but it is unlikely that these omitted costs
would amount to as much as 4 percentage points.
Census and customs personnel interviewed by the authors
were unable to provide an explanation for the difference
between "charges" and the c.i.f. less f.a.s. value. For
countries other than Japan, there is generally little or no
difference.
