Proceedings Of The Marine

SUM 2016

Proceedings magazine is a communication tool for the Coast Guard's Marine Safety & Security Council. Each quarterly magazine focuses on a specific theme of interest to the marine industry.

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Page 63 of 78

61 Summer 2016 Proceedings The primary U.S. cargo preference laws are set forth in the Cargo Preference Act of 1904, the Cargo Pref- erence Act of 1954, and Public Resolution 17. The 1904 Act requires that 100 percent of all military cargoes purchased for or owned by U.S. military departments be shipped exclusively on vessels of the United States or belonging to the United States. The structure of the Cargo Preference Act of 1904 applies to all supplies for which the military has contracted, including supplies to which it does not have title at the time of shipment. Congress' over- riding purpose in creating this act was to protect and promote a sufficient merchant marine capable of providing sealift in time of war or national emer- gency. The Cargo Preference Act of 1954 requires that at least 50 percent of civilian agency cargoes be trans- ported on U.S.-flagged vessels, and every depart- ment or agency is required to administer its pro- grams in compliance with the 50 - percent minimum. Public Resolution 17 requires that all cargoes generated by the U.S. Export-Import (Ex-Im) Bank be shipped on U.S.- flagged vessels unless the Maritime Administration grants a waiver. An example of this type of cargo would be when a foreign buyer purchases a fleet of fire trucks and arranges for a loan guarantee through the Ex-Im Bank. U.S. cargo preference laws are crucial to the continued exis- tence of the active, commercially viable, privately owned U.S.-flagged commercial shipping fleet — the most cost- effective sealift capability available to the U.S. government. Proper enforcement by the Maritime Administration and vigilant adherence by the Department of Defense (DOD), Export-Import Bank, and other federal departments and agencies is critically important to the American interna- tional fleet and to the survival of the U.S. merchant marine. In general, more than 90 percent of all overseas military equipment is shipped by sea because of the scale and scope of the cargo, and the cost efficiency of moving it by sea ver- sus by air. The existence of a U.S.-flagged fleet ensures that the U.S. can implement any national security policy necessary without having to rely upon foreign nations. The U.S.-flagged fleet is vital to U.S. national security, pro- viding essential sealift in peacetime and wartime, and the ships that carry these cargoes provide important jobs for American seafarers who are available in time of national emergency to crew the sizeable fleet of reserve government vessels. By guaranteeing the availability of certain cargoes to U.S.-flagged ships, U.S. cargo preference laws ensure that the vessels and attendant intermodal systems, trained crews, and vessel service industries continue to exist and prosper. Maritime Security Program The Maritime Security Program (MSP), an amendment to the Merchant Marine Act of 1936, was first passed in 1996 and originally comprised a fleet of 47 U.S.-flagged, militarily useful vessels. 3 The program is a federal maritime financial sustainment program that provides for a fleet of modern U.S.-flagged and U.S.-crewed militarily useful sealift assets operating in international trade. The MSP fleet enables the U.S. government to provide sealift for U.S. armed forces, utilizing the resources of the U.S.- flagged commercial fleet. In addition, the presence of a U.S.- flagged commercial fleet operating in international trade enables the government to pursue other economic and agri- cultural assistance programs overseas. The MSP fleet provides a U.S. national security asset at a lower cost than the government owning and maintaining an equivalent capability. The MSP is critical to our nation's ability to defend itself in time of war or national emergency, as it provides a framework where the U.S. government can utilize the active, commercially viable, privately owned U.S.- flagged commercial shipping fleet. The Maritime Security Program provides its U.S.-flagged, ship-operating participants with a readiness retainer that helps to offset the relatively higher costs of flagging, Vehicles wait to be loaded on an American Roll-on Roll-off Carrier vessel in Brunswick, Georgia.

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