MARAD Administrator Phillips Announces Cargo Preference Compliance Initiatives

MARAD Administrator Ann Phillips last week testified before the Subcommittee on Coast Guard and Maritime Transportation, announcing two initiatives intended to support federal compliance with cargo preference requirements.

Cargo Preference is the general term used to describe the 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.

Cargo preference is not only important for national security and defense, but also critical for sustaining and growing American shipping capacity.

Under current federal cargo preference law, the Department of Defense must move 100 percent of its cargoes on U.S.-flagged vessels. Generally, departments and agencies outside of the Department of Defense must ship at least 50 percent of the gross tonnage of the equipment, materials, or commodities that they transport on U.S.-flagged vessels.

Administrator Phillips announced that MARAD will issue a Request for Information to solicit input from all stakeholders on cargo preference requirements. She also announced that MARAD will resume publishing comprehensive federal cargo preference data. Publication of the data is intended to increase interagency efficiency and to provide transparency regarding the movement of government-impelled cargo on both U.S.-flagged and foreign-flagged vessels.

“Cargoes paid for by American taxpayers belong on American ships. Cargo preference requirements are not just ‘Buy America’ requirements, they are requirements that also help to strengthen America,” Administrator Phillips testified during the recent hearing, entitled “Cargo Preference: Compliance with and Enforcement of Maritime’s Buy American Laws.”

MARAD is also working with the Biden-Harris Administration’s “Made In America Office” to help agencies understand cargo preference requirements, including communicating with all federal departments and agencies to remind them of their obligations and request that they each identify a Senior Accountable Official—consistent with OMB’s implementing guidance on Executive Order 14005, Ensuring the Future Is Made in All of America by All of America’s Workers —who can be a single point of contact with whom MARAD can work to implement cargo preference requirements.

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