American Cargo for American Ships Act
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The bill would require that 100% of equipment, materials, and commodities procured, furnished, or financed by the Department of Transportation and shipped by sea be carried on U.S.-flagged commercial vessels, up from the roughly 50% minimum under current cargo preference law.
It would tighten a long-standing 'cargo preference' rule meant to support the U.S. merchant marine fleet, raising costs and logistics considerations for DOT-funded projects that ship goods overseas.
What this bill would do
What it would do
The bill would amend section 55305 of title 46, United States Code, to create a new exception for the Department of Transportation within the federal cargo preference statute. Instead of the general minimum share (generally 50% for civilian agencies) of federally financed ocean cargo required to move on U.S.-flagged commercial vessels, the bill would require the Secretary of Transportation and any recipient of DOT financing to ensure 100 percent of the gross tonnage of equipment, materials, or commodities that ship by ocean vessel travels on privately-owned U.S.-flagged commercial vessels. The requirement would apply whether DOT procures the cargo transport itself or finances it for a grant or loan recipient, and is computed separately for dry bulk carriers, dry cargo liners, and tankers. As under current law, it would only apply when U.S.-flagged vessels are available at fair and reasonable rates and would be administered to ensure fair participation across geographic areas.
Key provisions
- 1Would add an exception to the general cargo preference law specifically for Department of Transportation-procured or DOT-financed cargo
- 2Would require 100 percent, rather than the general lower minimum, of DOT-related ocean cargo tonnage to move on U.S.-flagged commercial vessels
- 3Would apply the requirement to DOT itself and to any recipient of DOT federal funding or financing for shipped goods
- 4Would condition the requirement on U.S.-flagged vessels being available at fair and reasonable rates and ensure fair participation by geographic area
Who would be affected
The Department of Transportation, state and local agencies and other recipients of DOT grants or financing that ship equipment or materials overseas, and U.S.-flagged commercial shipping companies that would carry a larger share of DOT-related cargo under the new 100% requirement.
Why it matters
Recipients of DOT funding that ship materials by sea would face a stricter sourcing requirement, potentially raising shipping costs or narrowing carrier options if U.S.-flagged vessel capacity is limited. U.S.-flagged shipping companies would gain guaranteed cargo volume from DOT-related shipments, reinforcing federal support for the domestic maritime industry.
What would change
Changes to existing law
Amends 46 U.S.C. § 55305 (cargo preference law) (Sec. 2)
Adds a Department of Transportation-specific exception requiring 100% of applicable ocean cargo to move on U.S.-flagged vessels, instead of the general lower minimum.
Agencies directed to act
How implementation would work
The Secretary of Transportation would need to identify which DOT-procured or DOT-financed shipments move by ocean vessel and ensure compliance with the 100 percent requirement, tracking gross tonnage separately for dry bulk carriers, dry cargo liners, and tankers. Recipients of DOT financing would bear responsibility for using U.S.-flagged vessels when contracting their own shipments. The requirement includes a built-in flexibility: it applies only when U.S.-flagged vessels are available at fair and reasonable rates, and enforcement is meant to ensure fair geographic distribution of cargo among domestic carriers, consistent with existing cargo preference administration.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Commerce, Science, and Transportation.
Official CRS summary
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This bill requires 100% of equipment, materials, and commodities procured, furnished, or financed by the Department of Transportation (DOT) and transported on ocean vessels to be transported on U.S.-flagged commercial vessels. (Current cargo preference laws require that a minimum percentage of federally financed ocean cargo be transported on U.S.-flagged commercial vessels. For civilian agencies and agricultural cargo, the minimum is generally 50%.)
Specifically, the bill imposes the requirement on DOT (for cargo it contracts for or procures for itself) and recipients of DOT funding (for cargo DOT has financed with federal funds or advanced funds for the recipient to obtain). As under current cargo preference laws, the requirement applies to the extent those vessels are available at fair and reasonable rates for U.S.-flagged commercial vessels, in a manner that will ensure fair and reasonable participation of U.S.-flagged commercial vessels by geographic area.
Legislative subjects
Marine and inland water transportation; Public contracts and procurement; Transportation and Public Works
Committee report
H. Rept. 119-147