Guide
Do Foreign Military Sales shipments have to travel on U.S.-flag vessels?
By law, at least half of the grant-, credit- or guarantee-funded cargo that goes by sea must travel on privately owned U.S.-flag vessels. policy goes further for materiel bought with grant funding, including and articles on loan or lease: all of it must travel on U.S.-flag vessels unless , in coordination with the Maritime Administration, grants a Determination of Non-Availability. The term of sale and Type of Assistance code on the show when the rules apply. Air cargo of the same kind gives first preference to U.S. carriers.
Do Foreign Military Sales shipments have to travel on U.S.-flag vessels?
In accordance with the Merchant Marine Act of 1936, as amended by the Cargo Preference Act of 1954, defense articles purchased through the Foreign Military Financing Program (FMFP), or which have been granted to a country under the Foreign Assistance Act of 1961 or the National Defense Authorization Acts, and which will be shipped by ocean vessel, are to be transported in vessels of U.S. registry. This requirement applies to new articles and .
Freight forwarders must take note of the term of sale on the to determine if the Cargo Preference Act applies to their cargo. The “ Credit (Non-Repayable)” and “Excess () Grant” require transport by vessel to be made on a U.S.-registered carrier.
Type of Assistance codes A, M and N mark grant-funded materiel; Z ( Credit) and Y ( Guarantee) mark credit- and guarantee-funded materiel, which the statute also covers.
and the U.S. Maritime Administration () of the USDOT closely monitor credit/loan shipments. In general, -appropriated funds cannot be used to pay for any portion of the shipment that is not occurring on a U.S. Flagged-vessel, unless a Determination of Non-Availability (DNA) is granted or some other provision of U.S. law applies. DNA applications must demonstrate that a reasonable, timely, and bona fide effort to arrange P1 service has been made and such vessels are not available. Applications must also show all comparative rates. Partner countries should submit DNA requests to with a copy to .
References
SAMM
- SAMM C7.9.1.1 — Legal Requirements.
- SAMM C7.9.1.2 — Policy Requirements.
- SAMM C7.9.1.3 — Types of Service.
- SAMM C7.9.2 — Cargo Preference (Air).
Related
Foreign Military Sales (FMS)
A process, authorized by the Arms Export Control Act, through which eligible foreign governments and international organizations may purchase defense articles, services, and training from the United States Government.
SAMM Glossary, as of 12 September 2026
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DSCA — Defense Security Cooperation Agency
SAMM Acronyms, as of 12 September 2026
Glossary entry →Defense Security Cooperation Agency (DSCA) →
Excess Defense Articles (EDA)
Defense articles owned by the USG which are neither procured in anticipation of military assistance or sales requirements, nor procured pursuant to a military assistance or sales order. EDA are items (except construction equipment) that are in excess of the Approved Force Acquisition Objective and Approved Force Retention Stock of all DoD components at the time such articles are dropped from inventory by the supplying agency for delivery to countries or international organizations.
SAMM Glossary, as of 12 September 2026
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Letter of Offer and Acceptance (LOA)
The legal instrument used by the USG to transfer itemized defense articles, defense services, and design and construction services to foreign partners.
When used under the authorities provided in the Arms Export Control Act for Foreign Military Sales, the LOA is a binding agreement signed by the USG and the foreign partner to transfer such articles and services.
When used under Building Partnership Capacity (BPC) authorities, the BPC LOA is not signed by the Benefitting Partner.
SAMM Glossary, as of 12 September 2026
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Defense Transportation System (DTS)
The portion of the worldwide transportation infrastructure that supports DoD transportation needs in peace and war. DTS consists of two major elements: military and commercial resources. These resources include aircraft, assets, services, and systems organic to, contracted for, or controlled by the DoD. DoD's infrastructure, including ports, airlift, sealift, railway, highway, in-transit visibility, information management systems, customs, and traffic management that the DoD maintains and exercises in peacetime, is a vital element of the DoD's capability to project power worldwide. It provides for responsive force projection and a seamless transition between peacetime and wartime operations.
SAMM Glossary, as of 12 September 2026
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LOA — Letter of Offer and Acceptance
SAMM Acronyms, as of 12 September 2026
Terms of Sale (Letter of Offer and Acceptance)
Standard descriptions entered by the Implementing Agency on a Letter of Offer and Acceptance (LOA) that indicate when payments are required and how the LOA is financed (e.g. cash, Foreign Military Sales credit, etc.).
SAMM Glossary, as of 12 September 2026
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Defense Article (Foreign Assistance Act; Arms Export Control Act, not including commercial sales subject to the International Traffic in Arms Regulation)
Any weapon, weapons system, munition, aircraft, vessel, boat, or other implement of war;
SAMM Glossary, as of 12 September 2026
EDA — Excess Defense Articles
SAMM Acronyms, as of 12 September 2026
FMS — Foreign Military Sale
SAMM Acronyms, as of 12 September 2026
Implementing Agency (IA)
The military department or defense agency responsible for the execution of military assistance programs. With respect to FMS, the military department or defense agency assigned responsibility by the Defense Security Cooperation Agency to prepare an LOA and to implement an FMS case. The implementing agency is responsible for the overall management of the actions that will result in delivery of the materials or services set forth in the LOA that was accepted by a foreign country or international organization.
SAMM Glossary, as of 12 September 2026
Glossary entry →Open the manual’s entry → (opens in new tab)