Maritime cargo preferences only waste American taxpayer dollars

Maritime cargo preferences only waste American taxpayer dollars
Stephanie Mercier and Erin Lentz, 06/21/18

In a recent column in The Hill, the authors contend that preserving and bolstering cargo preference requirements — the law requiring U.S. shippers to use U.S. flagged vessels to transport “government-impelled ocean-borne cargo” — is crucial to maintaining America’s standing in international trade, carrying out the nation’s humanitarian agenda, and projecting U.S. military power overseas.

Our findings and those of others, including Christopher Barrett of Cornell University and Vincent Smith of the American Enterprise Institute and Montana State University, suggest otherwise. First, there is little to no evidence that the cargo preference requirement on U.S. food aid shipments does anything to augment the readiness of today’s U.S. armed forces. The Defense Department maintains that it receives benefits from paying higher prices to ship military goods on U.S. flagged ships, but the consensus view of three 2015 studies is that the limited number of cargo ships in the U.S. flagged fleet would not affect a military surge.

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