delete PART 381—CARGO PREFERENCE—U.S.-FLAG VESSELS
This regulation implements the Cargo Preference Act of 1954, requiring federal agencies to ensure that at least 50% of ocean freight revenue and tonnage for government-funded shipments uses U.S.-flag vessels. It establishes reporting requirements, bid evaluation procedures for subsidized vessels, and procedures for resolving disputes. The regulation aims to support the U.S. maritime industry by guaranteeing a market share for American ships in government-related cargo transport.
This regulation artificially props up the U.S. maritime industry through government coercion, creating a hidden subsidy that distorts market competition. It forces taxpayers to pay higher shipping costs for government cargo, imposes complex compliance burdens on federal agencies, and violates free trade principles by discriminating against foreign vessels. The unseen costs include higher government procurement expenses, reduced economic efficiency, and protection of an industry that cannot compete on merit alone.