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Office of
Cargo Preference and Domestic Trade
Customer Outreach
Tel.:(800) 9US-Flag (987-3524)
(202) 366-4610
Fax: (202) 366-5522
Email: cargo.marad@dot.gov
Laws and
Regulations
The Cargo Preference Act of 1904
(1904 Act) requires all items procured for or owned by U.S. military departments and
defense agencies be carried exclusively (100 percent) on U.S.-flag vessels available at
rates that are not excessive or otherwise unreasonable. These cargoes are generated
primarily by DOD contracts with domestic and foreign contractors. Cargo preference applies
not only to the end product but also to component parts.
The Cargo Preference Act of 1954
(P.L. 83-664), as amended, requires that at least 50 percent of the gross tonnage of all
Government-generated cargo be transported on privately owned, U.S.-flag commercial vessels
to the extent such vessels are available at fair and reasonable rates. In 1985, the
Merchant Marine Act of 1936 was amended to require that the percentage of certain
agricultural cargoes to be carried on U.S.-flag vessels be increased from 50 to 75
percent. (See Food Security Act bullet.)
Section 901(a). Section
46 U.S.C. 1241(a) requires any officer or employee of the United States traveling on
official business overseas or to or from any of the possessions of the United States,
unless otherwise noted, must travel and transport his personal effects on ships registered
under the laws of the United States.
Food Security Act of 1985,
amended the Cargo Preference Act of 1954, by the addition of Sections 901a through 901k to
the Merchant Marine Act, 1936, in order to increase the minimum U.S.-flag requirement from
50 to 75 percent for shipments of agricultural cargoes under certain foreign assistance
programs of the United States Department of Agriculture and the Agency for International
Development.
P.L. 105-383 established
that substandard vessels and vessels operated by operators of substandard vessels are
prohibited from the carriage of Government-impelled cargo for up to one year after such
determination has been electronically published. The easy availability of this information
has resulted in increased industry use. A listing of
owners/operators prohibited from
carrying Government-impelled cargo are available at:
http://www.customs.gov/xp/cgov/export/persons_list/
Public Resolution (PR) 17
(48 STAT. 500) of the 73rd Congress requires that all cargoes generated by an
instrumentality of the Government, such as the Export-Import Bank of the United States, be
shipped (100 percent) on U.S.-flag vessels, unless a waiver is granted by the Maritime
Administration.
The Maritime Security Act of 1996,
Section 17 of the 1996 Act permits Great Lakes ports to participate in the handling of P.L. 480 Title II humanitarian food aid packaged commodities awarded on a lowest landed
cost basis without reference to vessel flag. The law allows these ports to act as
bridge-ports, providing loading and unloading services, even though the cargo actually may
be shipped from another port, and thus provides stevedoring jobs during the winter months
when the Great Lakes are closed to vessel traffic.
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