The coalition USA Maritime, to which the SIU is affiliated, has expressed strong opposition to a misguided attempt to turn over the transportation of U.S.-government financed cargoes to foreign-flag, foreigncrewed shipping interests. Such a move would, according to USA maritime, severely weaken the U.S.-Flag Merchant Marine, cost thousands of American maritime workers their jobs, and destroy the ability of the U.S.-flag industry to provide the commercial sealift readiness capability relied upon by the Department of Defense.
Writing in response to a pair of concurrent resolutions introduced in the U.S. Senate, the coalition described the “ship American” components of cargo preference as “essential to the maintenance of our U.S.- Flag Merchant Marine.”
Further, USA Maritime called the resolutions unnecessary, because the law “already allows for the waiver of Ship American preferences if U.S.-flag vessels are not available at fair and reasonable rates. USAID currently waives Ship American rules for 40% of its flagship Food for Peace program and awards 70% of such cargoes to foreign carriers.”
The statement continued, “The resolutions are overbroad. They are not limited only to supplies for Ukraine but would waive Ship American rules everywhere. Resolution 37 would waive Ship American rules indefinitely; Resolution 38 would divert cargoes to foreign carriers for an arbitrary three-year period.”
Significantly, the coalition also spelled out how the resolutions “dramatically overstate the cost of shipping American. All ocean shipping under the Food for Peace program – foreign-flag and U.S.-flag combined – accounts for only 8% of program costs. The premium for using U.S.-flag ships accounts for less than 1% of program costs.”
The statement concluded, “Today’s environment of rising peer nation competition from Russia and China is not the time to give up our U.S.-flag shipping capacity or turn it over to foreign interests. We need to be prepared to support our allies in Europe and elsewhere with American sealift ships and American mariners who have never failed to answer the call when needed by our nation.”
According to the U.S. Department of Transportation, cargo preference “is the general term used to describe U.S. laws, regulations and policies that require the use of U.S.-flag vessels in the movement of cargo that is owned, procured, furnished, or financed by the U.S. Government. It also includes cargo that is being shipped under an agreement of the U.S. Government, or as part of a Government program.”
Preference cargoes typically include military items, food aid, and shipments generated by the U.S. Export-Import Bank. There are corresponding percentage requirements that specify how much of the cargo must be moved on American bottoms, ranging anywhere from 50 to 100 percent.
Cargo amounts themselves vary from year to year. For example, according to the Congressional Research Service, U.S. international food-assistance outlays fluctuated from Fiscal Years 2016 to 2020 based in part on demands that changed due to conflicts in Syria, South Sudan, Somalia, and Ethiopia. In the fiscal year beginning October 1, 2020 and ending September 30, 2021, U.S.-flag ships delivered approximately 650,000 metric tons of food-aid cargoes around the globe.