THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, March 27, 1995 TAG: 9503250241
SECTION: BUSINESS WEEKLY PAGE: 11 EDITION: FINAL
SOURCE: BY STEPHANIE NALL AND TIM SHORROCK, JOURNAL OF COMMERCE
LENGTH: Short : 45 lines
For years, the farmers and sailors on Capitol Hill have fought over who gets the taxpayers' money. A large chunk of it - some $600 million over the last three years for humanitarian programs alone - goes toward supporting U.S.-flag ships through cargo preference laws.
Those laws guarantee that a certain portion of federal cargo moves on U.S.-flag ships, which cost more to operate. Federal funds offset the higher cost.
Farm state legislators, meanwhile, would rather see those offsetting funds go toward the promotion of food-aid exports.
This year the fight with their maritime counterparts is expected to erupt again.
And the larger Republican contingent in both houses, coupled with promises to slash the budget, make it more likely that they and other cargo preference opponents can either eliminate or restrict the guaranteed business for the U.S.-flag fleet.
In past years, the attacks on cargo preference seemed to catch the shipping companies and the maritime unions off-guard.
But this year, the U.S. merchant marine hasn't waited for congressional proposals. Instead, it has prepared a pre-emptive strike by offering a proposal to cut costs of the cargo preference laws by changing the way it is administered.
The cargo preference fleet comprises over 100 vessels, including large bulk ships, integrated tug-barges, tankers and breakbulk freighters. The industry is dominated by several large carriers, including Liberty Shipping Group Ltd., OMI Corp., Sealift Holdings Inc., Maritime Overseas Corp., Lykes Bros. Steamship Co. and Von Ommeron Shipping (USA).
With few exceptions, the hundreds of officers and seafarers working for those companies are represented by maritime labor unions. They include the Marine Engineers Beneficial Association, National Maritime Union, American Maritime Officers and the Seafarers International Union. by CNB