Lucy Marvin's Maritime Musings: House NDAA Would Give FMC U.S.-Flag Cargo Enforcement Role

The Fiscal Year (FY) 2027 National Defense Authorization Act (NDAA) could reshape how imported cargo reaches U.S. shores, and it deserves a closer look. On July 22, 2026, the U.S. House of Representatives narrowly passed its version of the NDAA (H.R. 8800) by a vote of 216-212. U.S.-flag shipping requirements have long applied to cargo procured, furnished or financed by the U.S. government, commonly known as government impelled cargo. Section 3569 of the bill would extend these requirements to privately owned inbound containerized cargo and roll-on/roll-off vehicles (such as cars), with the Federal Maritime Commission (FMC) responsible for enforcement. The requirement would apply only to these imports; it would not reach U.S. exports or other cargo types such as bulk, breakbulk or liquid cargo.

Background on the Maritime Preference Proposal

Section 3569 traces its roots to Executive Order (EO) 14269, "Restoring America's Maritime Dominance," which President Donald Trump signed on April 9, 2025. The EO directed federal agencies to develop a Maritime Action Plan (MAP) and examine ways to move more U.S. cargo onto American ships and grow the U.S.-flag fleet in international trade. The resulting MAP proposed a new United States Maritime Preference Requirement for containerized cargo. Section 3569 is part of a broader maritime amendment offered by Rep. Mike Ezell (R-Miss.), chair of the House Committee on Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation, which the House adopted by voice vote. The House also adopted a separate maritime amendment from Rep. Trent Kelly (R-Miss.) that would, among other things, raise the government impelled cargo preference threshold from 50 percent to 100 percent.

Shipping Targets and Vessel Eligibility

The FMC would enforce the requirement, but the U.S. Department of Transportation (DOT) would determine the scope and pace of implementation. DOT would set targets for how much cargo must be shipped on U.S.-flag vessels, with targets varying by trade route and, in some cases, by commodity. Importantly, these targets would be measured against each importer group's own covered cargo, not against the overall volume of U.S. imports or cargo carried by any particular carrier. In other words, each importer group would need to ensure that the required percentage of its own covered shipments moves on qualifying U.S.-flag vessels.

The program would begin with a four-year pilot phase. During the pilot, no less than 3 percent of an importer group's covered cargo would have to move on qualifying U.S.-flag vessels, unless a lower target is certified as necessary because of vessel or mariner availability. The pilot would focus on trade routes where such service already exists or can be added with minimal disruption. After the pilot, targets would rise by at least 1.5 percent a year for four years, then 2 percent a year thereafter, with pauses or adjustments allowed if U.S. vessel or mariner capacity is insufficient. Allied-built vessels could qualify through 2030, after which the program would increasingly favor U.S.-built ships, with U.S.-content requirements rising to 51 percent by 2042. Vessels owned or controlled by entities subject to foreign ownership, control or influence could qualify only if the owner has an approved Maritime Special Security Agreement with the Maritime Administrator.

FMC Enforcement and Penalties

As for the FMC, its new enforcement role could be substantial. The provision requires the FMC to enforce the requirement against beneficial cargo owners, importers of record and third-party logistics providers. Missing a target would result in a mandatory penalty of at least 10 percent of the value of incoming cargo, with additional fines for evasion or false certifications. Enforcement would begin one year after the FMC issues final rules.

Legislative Outlook and Next Steps

The U.S. Senate has not passed its own NDAA. A vote to begin debate failed in July 2026, and the Senate is not scheduled to return until November 9. Final terms are therefore likely to be set in House-Senate negotiations during the lame-duck session after the midterms. Because the NDAA is a must-pass bill, some version of Section 3569 could ultimately become law. Importers and logistics providers should assess their exposure across trade lanes before the bill is enacted.

With final NDAA terms likely to be negotiated in the coming weeks, companies that could be affected by Section 3569 should assess their exposure across trade lanes and understand how the provision could affect their supply chains.

Holland & Knight's Maritime Team can help clients assess the potential impact, develop and communicate their views to lawmakers and policymakers before the NDAA passes, and prepare for implementation if the provision becomes law. The team will continue to monitor Section 3569 through conference negotiations and enactment, as well as related developments under the MAP. If you have any questions about potential implications to your business, contact the author or another member of the team.