Cargoes that are financed, either directly or indirectly by the United States Government must be carried on U.S. flag vessels that are crewed by American mariners. U.S. flag vessels are vessels that are registered under the laws of the United States.

The statutes and regulations mandating U.S. flag ocean carriage of U.S. government financed cargoes are referred to as cargo preference requirements. U.S. government financing of cargoes can take the form of federal grant, guaranty or other direct or indirect funding provided by U.S. governmental agencies, instrumentalities or programs.