Cargo Preference

America’s cargo preference programs, which require that a certain percentage of government-generated cargoes be carried on U.S.-flag vessels, serve important economic and national interests. In addition to helping to preserve a viable pool of skilled mariners capable of meeting the nation’s sealift needs, the laws ensure a steady supply of cargo, and therefore are instrumental in preserving a healthy U.S. maritime industry. As is commonly acknowledged, cargo is the lifeline of the U.S.-flag merchant marine.

The three main cargo preference laws are:
 The Cargo Preference Act of 1904, which requires that all cargoes procured for or owned by the military services be carried exclusively on U.S.-flag vessels.

 Public Resolution 17, enacted in 1934, which states that all cargoes generated by the Export-Import Bank be shipped on U.S.-flagged vessels.

 The Cargo Preference Act of 1954, which reserves a certain percentage of all government-generated cargo subject to the law be transported on privately-owned U.S.-flag commercial vessels available at fair and reasonable rates.

Title I of the 1954 law governs the sale of agricultural commodities, while Title II, which is better known as the “Food for Peace” program, provides food aid to developing nations. Over the past five decades, Title I has facilitated the sale of some $30 billion worth of commodities, while Title II has provided 107 million tons of food aid, benefiting 3.4 billion poor and hungry people.

As then Secretary of State Colin Powell noted on the 50th anniversary of “Food for Peace” program, “In order to seize the opportunities of the 21st century, America needs programs like ‘Food for Peace.’ As we deal with the challenges of terrorism, as we consolidate democracy in nations around the world, as we give hope to people around the world, we’ll have to use our strategic tools in ways we have never used them before.’”

The AMMV will continue to support America’s vitally important cargo preference laws and to promote funding at adequate levels.