Agreement to benefit US exporters and US fleet

The Export-Import Bank of the United States (Ex-Im Bank) and the Maritime Administration (MARAD) of the US Department of Transportation signed a memorandum of understanding recently to establish a program to provide Ex-Im Bank-guaranteed working capital loans for shipping, logistics and other companies involved in ocean freight transportation. The agreement also updates certain shipping requirements for Ex-Im Bank transactions.

Under the agreement, Ex-Im Bank can provide working capital loans to export service providers, enabling them to extend credit terms to their export clients. The Bank will also increase its working capital guarantee from 90 to 95% for US companies that ship on US flag vessels. Ex-Im Bank and MARAD also agreed to raise the minimum threshold for Ex-Im Bank- guaranteed US export transactions that must utilize US flag vessels from $10 million to $20 million.

"This agreement helps US exporters, the US commercial shipping industry, and their workers," Ex-Im Bank Chairman Philip Merrill said. "Ex-Im Bank and MARAD have had a longstanding partnership to support US exports and US shipping. This agreement provides greater flexibility for US exporters seeking Ex-Im Bank financing and also enables Ex-Im Bank to offer expanded working capital support for export service providers and US exporters that ship on US-flag vessels."

"This agreement is a win for American labor and business, a win for freight forwarders, and a win for US-flag carriers. By providing credit terms and more access to working capital for small and medium US exporters and their logistics service providers that ship on US-flag vessels, we will make them more competitive and create more US jobs," said Maritime Administrator Captain William G. Schubert.

This year, Ex-Im Bank marks its 71st year of helping finance the sale of US exports, primarily to emerging markets throughout the world, by providing loan guarantees, export credit insurance, and direct loans. In fiscal year 2003, it authorized financing to support $14.3 billion of US exports worldwide. (Source: Export-Import Bank of the United States)