Opinion: The U.S. Ships for America Act … In a Corked Bottle
Robert Kunkel, President of Alternative Marine Technologies...
May 28, 2025
As a result of a major White House office wake-up call or Executive Order 14269 determining it is time to start building ships again, Washington DC announced America’s maritime industry has been “dangerously declining” and with that decline we have allowed China to become the dominant force in global shipbuilding. Hard to believe that for nearly 65 years we have overlooked how Japan first got ahead of us or the fact that Korea took the lead not soon after Japan. All that progress was ignored prior to anyone worrying about China. What may look like a Rip Van Winkle moment may actually be a four-alarm fire raised by current geopolitical events and our declining Naval power.
The U.S. Navy problems aside, our concern in this Op-Ed is American commercial shipping and shipbuilding efforts. What is disturbing about this legislation is the fact that DOD, MARAD and the GAO all realized the problem decades ago and issued The Way to Increase U.S. Shipbuilding Productivity in 1976.
We knew; Washington, DC knew; and the Navyknew.
The only surprises are who didn’t know. From that 1976 report and the $29.8 billion dollars of 1970 era taxpayer money spent, nothing has changed. Including the course of this new legislation. It does not paint revitalization, it paints restriction.
https://www.marinelink.com/news/opinion-us-ships-america-act-a-corked-526239
Continues:
And that is a non-starter for rebuilding our maritime base.
The ACT creates “The Strategic Commercial Fleet Program”, a U.S. flag fleet of 250 ships developed over a period of 10 years. Industry has questioned the intent of the legislation simply asking what type of ships would be built. The program and operating agreements favor foreign “reflag” and more or less wraps MSP and TSP into a new-seven-year operating agreement with the “approved tonnage”. The USCG reflag requirements were recently “relaxed” again this month to reduce flag costs in a foreign build. Another indication a reflag path will be the road taken towards the 250 number. Before we continue, the industry excitement and fanfare are based upon “rebuilding and revitalizing” our U.S. Shipyard base. That is where the jobs and manufacturing base is created.
Re-introducing a reflag commitment is a double-edged sword. And it does not support our long-term battle to build globally competitive U.S. shipbuilding.
We can continue with the fact that that the U.S. repair yards are not supported in the legislation. It is a well-known fact in U.S. shipbuilding that “repairs” pay the bills and keeps your work force employed. The Ships Act trades that away.According to a summary provided by Senator Kelly’s office the fleet is comprised of “commercially viable, militarily useful, privately owned vessels.”
What the summary fails to present is the bureaucratic operating restrictions, competitive analysis and approval “checklist” the asset needs to pass in order to enter the program or for that matter “compete” on a global basis. Unfortunately, it is difficult to provide a full excerpt from each section. Only a snapshot of language can be provided within our short editorial.
Section 53603 – pages 87-88: ‘‘(B) Beginning on the first day of the operating agreement, the vessel will be permanently ineligible for a coast-wise endorsement 26 under section 12112 of this title or to otherwise participate in the coast-wise trade, even if the operating agreement is terminated or not renewed.
Title V pages 180 – 182 ‘‘(f) PILOT PROGRAM FOR VESSELS IN DOMESTIC COMMERCE a vessel qualifying for funding through the pilot program under this subsection shall only be eligible if the Administrator certifies that the vessel of the United States that will be constructed -
‘‘(A)(i) will operate in an emerging industry or a new trade lane;
‘‘(ii) will not compete with existing vessels of the United States; and
‘‘(iii) will not serve a market already served by a vessel of the United States with a coast-wise endorsement;
A U.S. built MR 2 product tanker, entering into this operating agreement and capable of carrying military cargo AND holding coast-wise privileges would be more valuable than its foreign counterpart. A trade enhancement that would have stirred US investment in that vessel type. Imagine a U.S. built tanker being more valuable commercially simply because the foreign built or reflag tanker cannot trade the coasts. Let’s remember, the absence of domestic tanker tonnage is the current price indication to build and the lack of graving dock space to build it.
And how does that “competitive analysis” work? Is the existing ATB with a nine-man crew more competitive than the tanker providing 21 NEW U.S. crew member positions? Is the fact that the tanker carries more cargo and delivers an efficient voyage schedule than a tug & barge? Or the fact that the tanker can be built to meet California CARB regulations and IMO MEPC emissions and our existing domestic “ATB tanker” fleet does not?
Size – & Cargo – MatterIn 1972, the vessel Tokyo Bay was reported as the largest container ship built in Japan at 2,300 TEU. The Matson Aloha Class container vessels scheduled to be built at Hanwha Shipyard are listed as the largest U.S flag-built container ships in 2026 at 3,400 TEU. China and Korea are building 24,000 TEU vessels.
This should be an interesting “competitive analysis” discussion for this vessel type as the vessels are also “military useful”. The enormous cost differential of the build at Hanwha, recently reported as “climbing” would again place further investment in jeopardy.
U.S. investment would look to build 1000 TEU to 5000 TEU Container feeders to support the requests from the larger U.S. container ports to assist in port congestion mitigation. Global container operators have also looked to develop “all water” routes along the U.S. Coasts. MarAd’s Marine Highway program has been poorly funded and unsuccessful to solve this issue for decades.
The container feeder is a second vessel type that may be considered for the legislation program. No different than the tankers, the vessels will not have coastwise privilege and would have a greater value under US flag with the availability to trade the coasts if they did. The competitive analysis with this vessel type?
If the business model does not work, the only available trade the vessels could enter without becoming a “stranded asset” is Hawaii, Puerto Rico & Alaska. Needless to say, and fully understanding the restrictions of this legislation, that is not going to happen unless we continue to amend the Act with waivers and further restrictions that specifically block trade to the non-contiguous locations.
Beyond the technical discussions, the Maritime Trust Fund is provided to fund this legislation with taxes and tariffs collected from those Chinese built or operated Post Panamax container ships. Question how many “private investment” funds or companies believe this trust fund could raise the billions of dollars required to revitalize shipyards building Blue Water tonnage, or for that matter, if the targeted funds will be traded away in future China negotiations with the White House.
The issues continue beyond the two sample immediate ship types provided and the legislation works to coral new technology under similar competitive comparisons or political restrictions. How do we address carbon capture and the emerging LCO2 vessel technology along the U.S. Coasts? If a vessel receives coast-wise privileges, does it deny foreign built tonnage entering the new “trade”.
Where does LNG and the gas trade stand with a proposed 1% cargo set aside for LNG export? Those ship types alone already have both Administration push backs on climate change and industrial push backs from the major gas suppliers. Strictly for build and operating costs and competitive issues.
Understanding how the foreign ship building investments and freight markets operate, the owners & investors analyze supply & demand, negotiate finance, calculate equity value and take advantage of the cyclical nature of the markets. There are times to build and times to sell. The single most important part of the investment is Cargo. This alone defines commercial viability. At this point in time, the geopolitical issues have not produced the cargo demand.
Are there cargo requirements and business models that would work? Consider how that foreign shipping model is built. With White House discussions in Ukraine, the country will have massive requirements to rebuild the nation. As the Administration looks to rebuild US manufacturing, consider how many Anderson windows, Caterpillar bulldozers, John Deere tractors, U.S. Steel, cement, aluminum and pipe could be provided to support that rebuild with American Security.
Next, imagine if the White house negotiated all of that product to be carried on U.S. flag built and crewed vessels. Then understand that the majority of that United States cargo can be carried on dry bulk carriers with the addition of container fittings and cargo cranes, also military useful. A past shipbuilding design called “Con Bulkers”.
Add the fact that this design and vessel type is one of the easiest vessels to be built when considering rebuilding your shipyard base. Look at the historical beginnings of Japan, Korea and China - they all started with bulk carriers.
Add to your U.S. shipping model that the rare earth commodities the President is negotiating also needs to be brought home by bulk carrier and the fact that this vessel type also supports Ukraine and grain & agriculture. Our fleet will never be in ballast - we haul cargo on both ends of the voyage. A truly successful shipping model. And the start of module construction in both existing yards looking to get back into new construction and greenfield yards looking to the future.
Building can begin NOW.Can the cargo model be repeated? We rebuild Gaza and Syria with discussions with Saudi and Qatar. The opportunity provides many “deal making” opportunities for the world to see that America is great again on a global basis all led by American Shipping and shipbuilding. It is not “Sneakers & T-shirts”, and we do not have to complete with China during the growth.
The model goes beyond investment capability. It brings American Security with our flag flying on the stern. As former and future mariners we understand and provided the 4th line of defense. Develop the program that let's us play our part and your Navy decisions and budget will have a path to follow to support us in the effort.
If we do not work together as an industry in both commercial and Naval shipbuilding, the ship type decision will become simple.
It is Noah’s Ark.
