H.R. 2035: American Cargo for American Ships Act

The American Cargo for American Ships Act aims to amend Title 46 of the United States Code regarding the transportation of cargo procured, furnished, or financed by the U.S. Department of Transportation. The key aspects of the bill are as follows:

Objectives

• The bill seeks to ensure that all cargoes that the U.S. Department of Transportation acquires or helps finance are transported on U.S.-owned commercial vessels whenever these vessels are available.
• It emphasizes the importance of using privately-owned commercial vessels of the United States for transporting equipment, materials, or commodities purchased with federal funds.

Provisions

• The bill specifies that, with certain exceptions, when the U.S. government procures cargo, it must be carried on U.S.-owned vessels as long as they are available at fair and reasonable rates.
• The Secretary of Transportation is responsible for ensuring compliance with this requirement, which involves taking necessary steps to guarantee that the transportation of cargo supports a fair and reasonable distribution of opportunities for U.S. commercial vessels across different geographic areas.
• Furthermore, the legislation redesignates existing subsections in the relevant U.S. Code to incorporate these changes.

Exception Clause

• The bill includes an exception that allows for flexibility in situations where specific U.S.-owned vessels are not available at fair and reasonable rates, indicating that the government may need to look for alternatives under certain conditions.

By reinforcing the requirement for cargo to be transported on U.S.-flagged vessels, the bill aims to promote domestic shipping industries and ensure that federal funds support American commercial maritime activities.

Relevant Companies

• SEACOR Holdings Inc. (SEAC) – A global provider of marine transportation services and logistics, which may see increased business opportunities if U.S. government cargoes are required to be transported on American vessels.
• TOTE Inc. (TOTE, subsidiary of TOTE Maritime) – A shipping company that operates domestic routes and could potentially benefit from the increase in U.S. government cargo transportation.
• International Seaways (INSW) – Owner of a fleet that might be impacted based on the demand for U.S.-flagged vessels for government contracts.