A US shipbuilding strategy starts with passing the Ships Act

“Commercial ships could carry merchant trade, but they could also carry logistical supplies for the military in wartime. Shipyards could build new ships for civilian fleets as well as the Navy, but they could also repair ships damaged in wartime operations. Shipyards also drove other portions of the economy. For every shipyard blue-collar job, five to seven well-paying positions were created in upstream parts and component suppliers.”—National Review

While President Trump is to be commended for making US shipbuilding and maritime revitalization a national priority, he needs to do more.

Enactment of the bi-partisan supported SHIPS Act will be a positive next step.

Unfortunately, its enactment is “a tight squeeze” for Congress in 2025, further delaying investments in shipbuilding, according to Charles Papavizas, a maritime attorney with the firm of Winston and Strawn.

The Trump administration and Congress should be making the SHIPS Act enactment a top priority, because it will create a new 250 US flag fleet.

Jennifer A. Carpenter is the President & CEO of The American Waterways Operators (AWO), representing the inland, coastal tugboat, towboat, and barge industries. She is also the President of the American Maritime Partnership. In an interview with AJOT, Carpenter cited the vital importance of Congress enacting the SHIPS Act. Carpenter said enactment is vital “so the US can better compete with China.”

SHIPS Act

The legislation was proposed by Senator Mark Kelly (D-Arizona), a graduate of the United States Maritime Academy and Republican Senator Todd Young (R-Indiana). In the House it was introduced by John Garamendi (D-California) and Congressman Trent Kelly (R-Mississippi) It has support on both sides of the political aisle.

Senators Kelly and Young argue: “There are currently 80 US-flagged vessels in international commerce while China has 5,500. The SHIPS for America Act aims to close this gap and boost the US Merchant Marine by establishing national oversight and consistent funding for US maritime policy, making US-flagged vessels commercially competitive in international commerce by cutting red tape, rebuilding the US shipyard industrial base, and expanding and strengthening mariner and shipyard worker recruitment, training, and retention.”

Papavizas notes that the US Maritime Administration’s ship financing program, the Title XI program, “is not likely to be very useful in providing ship financing.”

Papavizas says that if the SHIPS ACT is enacted and sufficiently funded, it is proposed to acquire and build 250 US flag vessels: “Initially the new shipowners will be able to reflag 10 foreign-built ships of a maximum age of 14 years for the first three years which then goes up to 15 ships in the following years. However, the owners will also need to order a similar number of newly-built ships from U.S. yards and with a goal of 250 ships.”

The size of these orders should attract new shipbuilders from US allies “such as Japan and South Korea maybe Singapore to establish new shipyards in the United States since the existing US yards cannot grow easily. This will offer a new opportunity for foreign shipbuilders to build ships at new US shipyards to meet the shipbuilding target market of 250 ships provided under the SHIPS ACT.”

Role Model: South Korea’s Hyundai Samho

There already has been cooperation between South Korea and the United States in shipbuilding.

South Korean builder Hanwha recently acquired the Philly Shipyard in Philadelphia.

Another South Korean shipbuilder, HD Hyundai, formed a partnership this year with U.S. defense-focused shipbuilder Huntington Ingalls, and joined forces with Edison Chouest Offshore to build container ships in the US.

However, the focus now needs to be in investing in new shipyards with modern technology and a workforce trained to utilize global best practices.

The Hyundai Samho Shipyard in South Korea could be a role model for new US shipyards (pictured).

The Korean shipyard occupies 3,300,000 m2 which is 815 acres and employs 3,900 direct employees. HD Hyundai Samho is capable of building approximately 40 ships annually.

According to Hyundai Samho Heavy Industries, the shipyard utilizes four facilities to build ships:

• Dock # 1 (504 x 100 x 13 meters) can construct up to 800,000 deadweight tons (DWTs). Deadweight tonnage is the total weight of cargo, fuel, crew, and other supplies that a ship can carry safely.
• Dock # 2 (594 x 104 x 13 meters) can construct up to 1,000,000 DWTs
• Number One Berth Dock (524 x 65 meters) can construct up to 500,000 DWTs.
• Floating Drydock (335 x 70 x 24 meters) can construct 80,000 tons (lifting)
• Mega ‘Goliath’ cranes at modern shipyards shift huge steel block sections into the construction docks and are deployed as follows at the Samho shipyard as follows:
• 2 X 600-ton cranes are at Dock # 1
• 1 x 820-ton crane & 1 x 1,000 tons at Dock # 2
• 1 X 1,200-ton crane at the No.1 Berth Dock.

Steps to revitalizing US shipbuilding

Based on conversations with shipbuilders and maritime professionals, here are some of the steps that need to be taken to restore American shipbuilding:

• Enact and fund the SHIPS Act in 2025
• Construct new shipyards on the Pacific, Gulf and Atlantic Coasts utilizing 750-1,000 acres sites to establish global best practices based on the Hyundai, Samho model. Partner with Japan and South Korea to create new shipbuilding entities and disseminate best practices to other shipyards. Build commercial and naval ships.
• Assume the price tag is $100 billion amortized over 10 years.
• Target building 100 ships per year.
• Restore Food for Peace program, which previously provided essential cargo for US-flagged ships along with the US Agency for International Development (USAID).
• Rebuild the shipbuilding supply chain: produce key ship components: engines, steel plates, pipes, propellers, hatch covers, etc.
• Rescind shutdowns of offshore wind projects to revive new US port economic development and jobs. New offshore wind farms will need: new wind turbine assembly terminals and new U.S. shipbuilding including construction of new US ocean-going tugs, new offshore supply vessels, new cable-laying vessels and partnering with sister US ports for subcomponent work to be delivered and deployed by US tugs and barges.
• Expand US Marine Highway supports for US coastal shipping utilizing new US built feeder ships (3,000 twenty-foot unit containerships) as well as Ro/Ro (Roll- on/Roll-off) and tankers.
• Explore vessel automation developed by Orca-AI, Vard and others to alleviate mariner shortage challenges.
• Mobilize US maritime schools and maritime unions supported by new scholarships to recruit and train deck and engine crew members.
• Fund US community colleges, trade schools, labor union apprentice programs to train welders, painters, crane operators, electricians, etc.
• Offer undocumented Americans guaranteed US citizenship if they qualify to work at a US shipyard or for a US flag vessel.