Lykes Lines will receive U.S. government subsidies to offset the cost of operating under a U.S. flag as part of a 10-year contract with the U.S. Department of Transportation. The contract gives the carrier the right to operate five U.S.-flag containerships under the Maritime Security Program starting Oct. 1, 2005. The value of the subsidy will total $145 million.
The five ships will operate on the transatlantic trades.
The Maritime Security Program (MSP) was created to ensure the U.S. Department of Defense has access to a fleet of modern, efficient commercial U.S.-flag ships in times of war or national emergency.
Lykes Lines currently operates five U.S.-flag ships in a single loop on the transatlantic trade, but only three are MSP ships. Those ships are covered by a contract that expires Sept. 30, 2005.
Lykes Lines, which began as Lykes Brothers Steamship Company in 1899, was acquired by CP Ships in 1997, prior to that company being spun off from its Canadian parent. CP Ships’ corporate offices are in Gatwick, U.K.
