This bill reinstates and augments certain cargo preference requirements and addresses related issues. (Cargo preference requirements specify that a minimum percentage of federally financed ocean cargo must be transported on U.S.-flagged commercial vessels.)
Under current law, federal agencies must ensure that 50% of the gross tonnage of their purchases and cargo transported via ocean vessel is carried on eligible U.S.-flagged commercial vessels. The bill increases this requirement to 75%. The Maritime Administration (MARAD) must issue regulations and interagency guidance implementing this policy and an earlier-enacted preference applicable to military cargo.
The bill also reinstates a requirement for 25% of the total gross tonnage of certain federally financed agricultural cargo to be transported on U.S.-flagged commercial vessels. This requirement, which was repealed in a 2012 law, shall apply in addition to the 75% requirement.
Specifically, the additional 25% requirement applies to commodities, specialty crops, and food products exported by the Department of Agriculture under designated international food assistance programs, including the Food for Peace Act and the Food for Progress Act of 1985. The Department of Transportation (DOT) must finance any increased ocean freight expenses incurred as a result of the 25% cargo preference requirement.
The bill also details registration requirements for a vessel to be eligible to haul cargo under each preference.
DOT may temporarily waive these requirements under limited emergency circumstances if MARAD determines that there is an inadequate supply of vessels to satisfy the requirements.
