Farm Progress

Unions oppose waiving U.S. shipping requirements of food aid

NGOs, House members support efforts to waive current U.S. flagged ship requirements to transport food aid.

Jacqui Fatka, Policy editor

May 31, 2022

3 Min Read
U.S. flag exports trade container ship port exports

Some of the world’s top humanitarian organizations—including Save the Children, Catholic Relief Services, and World Food Program USA—are now backing Sen. Joni Ernst, R-Iowa, and Sen. Chris Coon’s, D-Del., bipartisan push to waive shipping red tape and to open up American food aid in the wake of Russia’s invasion of Ukraine. However, the AFL-CIO, on behalf of 37 labor unions across all modes of transportation, are urging against the resolution that would waive the Ship American rules.

A bipartisan group of U.S. House Representatives, led by Rep. Jackie Walorski, R-Ind., introduced companion legislation, showing growing bipartisan and bicameral support for the initiative. The effort has also gained support from other U.S. senators, including Senators Ted Cruz, R-Texas, and James Lankford, R-Okla., as a way to more efficiently and economically get food aid around the world.

Current law mandates 50% of U.S. food aid exports to be shipped on U.S. flagged vessels, a rule that increased shipping costs by an average of $52.6 million per fiscal year between 2013 and 2018 (on average). Secretary of Agriculture Tom Vilsack recently noted that the cost of shipping the food commodities overseas is often higher than the actual costs for the grain and other products themselves right now.

There are only four dry-bulk shipping vessels—the preferred means for moving food aid—worldwide that meet these shipping requirements while there are more than 12,000 vessels operating globally, according to USDA. The total U.S. flagged ships make up less than one percent of the global shipping fleet. Under current law, the President of the United States, secretary of defense, or Congress can waive the 50% requirement temporarily. If Congress approves the action, it wouldn’t require the president to sign the measure, but would go into effect immediately.

In a joint statement, more than a dozen of the world’s top non-governmental organization expressed support for the resolution. They stated: “Our community strongly supports efforts in Congress to address rising shipping costs as the impacts of the conflict in Ukraine continue to have ripple effects on the entire global food system. […] In these unprecedented conditions, we request that Congress urgently consider and pass [Ernst’s measure] to help ease the increasing burden of rising shipping costs on lifesaving, hunger-reducing programs by temporarily waiving the U.S. cargo preference mandate on food aid.”

However, the AFL-CIO letter to the House says the resolution to eliminate the Ship American “cargo preference” rules are essential to the U.S. Merchant Marine and U.S.-flag shipping industry and would be a detriment to the U.S. maritime workforce. “To be clear, this means that the federal government would cede U.S. food-aid and shipping interests to foreign flagships by eliminating 100% of the U.S. ships that are available to transport food-aid at fair and reasonable rates,” the letter states.

“These resolutions are totally unnecessary, as existing law currently allows for the waiver of Ship American preference if U.S.-flag vessels are not available at fair and reasonable rates,” the AFL-CIO writes. “More importantly, cargo preference statutes and other U.S flag shipping requirements are essential to maintaining the U.S.-flag fleet. By requiring that government-financed cargoes move on U.S.-flag vessels, we can retain a pool of highly-trained, qualified and loyal civilian mariners who stand ready to meet our military and humanitarian needs while simultaneously operating in the commercial-flag industry.”

The letter explains, “When foreign flag shipping companies are currently making record profits amidst global supply chain disruptions, now is not the time to weaken critical policies that would come at the expense of American businesses and working families.”

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About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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