Support for Cargo Preference
A recent hearing in the U.S. House of Representatives made it crystal clear that our country is best-served by maintaining strong cargo preference laws.
Through joint testimony submitted on behalf of several maritime unions, the SIU took part in the Sept. 14 hearing, conducted by the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation. Two days earlier, the Government Accountability Office (GAO) released a report identifying ways to better enforce cargo preference compliance. As you may know, cargo preference has been under attack this year, via House and Senate resolutions that attempt to leverage the war in Ukraine to justify a waiver. As the unions said in our joint testimony, these resolutions not only ignore the impact such a waiver would have on America’s commercial sealift readiness capability, but totally disregard the impact it would have on the jobs of American merchant mariners. If these resolutions were enacted, the federal government would give up control of the carriage of U.S.-taxpayer financed food aid cargoes to foreign-flag, foreign-crewed ships.
We also pointed out that, contrary to what the sponsors of these resolutions would have us believe, existing U.S.-flag cargo preference shipping requirements are not hindering our government’s efforts to export food aid. If the United States Agency for International Development (USAID) uses the funding made available by Congress to respond to the worldwide food crisis and either the volume of food aid cargo exceeds available American-flag tonnage or U.S.- flag vessels aren’t available at “fair and reasonable” rates, existing law already allows for the waiver of the cargo preference “Ship American” requirements. Put simply, the resolutions are completely unnecessary.
I was especially encouraged by remarks from U.S. Rep. Peter DeFazio (D-Oregon), who chairs the full House Transportation and Infrastructure Committee, and from U.S. Rep. Salud Carbajal (D-California), chairman of the subcommittee.
DeFazio said in part, “The U.S. depends on a robust merchant fleet not only for economic purposes but also for national security. This past year, we’ve seen the negative effects of an industry dominated by foreign companies and interests wreaking havoc on our supply chain. It is counter to U.S. interests to increase reliance on foreign-flagged vessels. For decades we’ve seen the U.S.-flag fleet shrink… The flags-of-convenience system has exacerbated this issue, allowing companies to flag their vessels under countries that lack labor, safety, and environmental standards. Cargo preference provides a backbone to support the dwindling internationally sailing U.S.-flag fleet, especially when coupled with other incentive programs like the Maritime Security Program.”
He added, “There’s an old saying: cargo is king. By providing a baseline of cargo for U.S.-flagged ships, we incentivize more vessels to join the fleet. Without guaranteeing cargo for U.S. vessels, we lose demand for U.S.-owned and -crewed ships.”
DeFazio also voiced concern about agencies that have skirted cargo preference requirements. Carbajal put it this way: “Compliance with cargo preference law is closely tied to the sustainment of American jobs and national security. It requires that government-impelled cargo be shipped overseas using U.S. flagged vessels – in other words, vessels crewed by U.S. mariners, owned by Americans, and abiding by U.S. laws. Guaranteeing a steady supply of cargo through cargo preference programs equates to job security for these hardworking citizens. Along with the Maritime Security Program and the Jones Act, cargo preference ensures that the U.S. seagoing maritime industry does not disappear completely…”
There were many other encouraging statements throughout the hearing, which featured multiple panels and representatives from labor, business, government and the administration. Their respective conclusions are consistent with what we’ve known all along: America’s national, economic and homeland security depend on a strong U.S. Merchant Marine, and the U.S. Merchant Marine relies in part on maintaining and enforcing cargo preference laws.