Summary: As a result of a congressional action to deregulate domestic air cargo rates, the Chairman of the Board of Commissioners of the Norfolk Port and Industrial Authority suggested that the military would benefit by using scheduled air carriers to distribute supplies. GAO examined the effect of deregulation on the distribution patterns used by the Department of Defense (DOD) and checked on the volume of cargo originating in the Norfolk area. It was concluded that deregulation has had little effect on the distribution of supplies by DOD. Air freight rates are higher than the rates DOD pays for surface transportation, and air rates have not decreased appreciably with deregulation. Congress urges the services to reduce their reliance on commercial air delivery within the United States during peacetime. A study made by the Navy, however, recommended the use of containerized scheduled commercial air freight service, and the Navy is continuing to study the possibility of increasing the use of airlift to move supplies and reduce costs.
