“Déjà vu all over again” The Markets Impacting the Revival of US Naval & Commercial Shipbuilding

The U.S. Maritime Industry is sifting through a nearly two-year decision process after Executive Order 14269 announcements of “Maritime Dominance” of April 9th 2025. Initially reported as the strongest federal support in decades, longer periods of delays have also occurred as congress debates the Ships for America Act which has been passed from committee to committee in Congress. Legislation proposed to support American shipbuilding and the US flag commercial fleet and to date, has not reached the floor.

Recently, the Maritime Administration advised the government effort is a different maritime revival. An understatement considering the Federal government’s first move was to issue a “Jones Act” waiver on March 17, 2026, allowing foreign vessels to trade in the coastal energy market. To be fair, the announcement was made through the Department of Homeland Security and reported without MarAd’s knowledge. The waiver disrupted U.S. flag coastal energy trading on all three coasts and has raised many unanswered questions on the direction the Administration is taking or for that matter who is making the decisions.

The irony of the revival statement is the fact that the “Act” has long been described as the backbone of the country’s maritime industry. Considering the current global geopolitical events, the waiver decisions also question the claim of National Security, historically supported by Transcom and Military Sealift Command. Most would agree it could not be more important at this time.

With issues continuing in the Straits of Hormuz, the waiver’s promise of gasoline price reduction did not occur during the first five months of foreign vessel trading. The energy costs continue to rise despite an extension put into place on August 13, 2026. Attempts to track the foreign flag cargo movements have been poor at best with estimates ranging from 200 to 400 voyages occurring during the two periods.

Considering MarAd’s understanding that cargo is a part of this revival, it would be our opinion coastal movements is an important market that should be considered as a US “Maritime Dominance” priority. Certainly, with the fact that we have now invested over one and a half billion dollars in state maritime training vessels to recover the lack of seafaring labor. It is not only cargo; the success of a “market” is what drives commercial shipbuilding and investment.

Simply put, the direction and success of commercial US shipbuilding is not only preference cargo. It is building at competitive costs to enter a market that employs American seafarers and provide the ability to renew an aging fleet. The lack of US shipyard subsidy is the problem and it is needed to meet that goal. We cannot compete commercially against foreign operating costs and capital of ship construction or labor.

The original Ships For America Act legislation contains a shipbuilding incentives subsection 53801 interpreted to believe Congress and the Federal Government understands shipyard subsidy is required for commercial shipbuilding if we are to make any attempt to compete with any foreign shipyard. The description of the incentive allows a comparison of a US build cost to a foreign build of a coastal registered vessel not competing with current operators or looking to trade in an area where the specific vessel type is not available. The approval results in subsidy against the comparable US to foreign cost differential.

Amtech has submitted a project to the Maritime Administrator with that objective. A US shipyard partner and a financial supporter are involved who have built the vessel type in foreign yards and a US yard to confirm the costs.

Here is the problem.

The foreign contracted cost is not a real number. The delivered foreign contract takes into account the shipbuilding subsidies provided by their governments whether Chinese, Korean, Japanese or European (the ship design has been built in more than several foreign countries). The US shipyard costs do not.

In our opinion the project may open doors to understanding the US “cost to build” problem when competing against foreign yards.

Our intent is to continue to support the industry as we have for decades. That said if the current administration is looking to reinvent the wheel, look to those who were around when the wheel was actually built. Many of the industry problems are repeated historical events which have not been corrected and if not addressed now will result in the revival failing again without accomplishing simple goals.

Begin by completely separating Naval and commercial ship construction. The successful Far East yards have been structured in this manner for decades. Owner/Operators build according to market supply and demand. Shipyards design and build according to their own markets and business models. Military and commercial ship construction are two different animals.

Naval shipbuilding markets follow geopolitical events and we are drowning in those global events as we speak. Give the Department of War credit for understanding that Navy shipbuilding has changed. Drones, UAV, Autonomous surface, conventional submarines and Arctic requirements are the latest additions to our Destroyers, Nuclear Carriers and Submarines fleets. US shipbuilding defense capacity and government investment has already responded to these new problems and requirements.

The US Navy was originally built to serve and protect the American coasts, our commercial ships and trade. The global shift in that operation occurred after World War II as the United States emerged as the world’s industrial and naval superpower.

The only fleet left standing.

The 1944 Bretton Woods agreement established a postwar international financial system and the U.S. committed to a strategy guaranteeing a secure, free use of the oceans for all nations, including former adversaries. This created the maritime environment necessary for modern globalization. We were no longer tasked to defend or project power. The US Navy protected free trade. Free trade is now under attack.

Circa 1979 the U.S. reestablished the post-WWII role by establishing the DoD Freedom of Navigation Program. The Navy regularly conducted freedom of navigation operations worldwide to challenge and ensure international sea lanes remained open under international law. As many debate the lack of Naval budget and government support during the post-cold war period, take a moment to realize what the actual threat was to commercial shipping and the US flag vessels that were operating internationally. We are being challenged to return to that role with the continued threat of a “ghost” fleet and free trade is again being defended with force.

Nearly 10 years later, Operation Earnest Will (1987–1988) was developed during the tanker war of the Iran-Iraq conflict. Iranian forces utilized mines and speedboats to attack commercial shipping in the Strait of Hormuz. In response to the escalation, threatening over 20% of the world's oil supply, the U.S. Navy launched its largest convoy escort operation since WWII. We reflagged Kuwaiti oil tankers and actively escorted tonnage through the Gulf, while destroying Iranian gunboats and mining platforms to keep the Strait open.

Apologies for not wanting to miss this opportunity to quote Yogi Berra as we compare the current Middle East situation as an example of history repeating itself. Its “Déjà vu all over again”

We previously noted the dates the Executive orders and commerce reports were issued. The Straits were open and oil flowed. The Naval ship construction concerns at that time prepared for an Indo Pacific theater requiring both projecting military power and defending both ally and homeland. The latest Middle East conflict has now presented two fronts on a possible war footing. Ukraine and Russia have presented a third. Through more than several Federal Administrations, strategic Pentagon reports have advised the existing Naval fleet was not capable of supporting two fronts. Naval shipbuilding needs to be funded, take precedence, and utilize our shipyard capacity to build a war time labor force and deliver a fleet capable of reestablishing free trade and preserve National Security.

Add the control of Greenland to the discussions or the Canadian Prime Minister stating in a September 2026 interview with the New York Times that his government examined the possibility of a U.S. military invasion of Canada, describing it as an "extreme tail risk", and ship construction takes on a entirely different discussion.

Unfortunately, US commercial shipbuilding may have to take a back seat for the moment. Extreme geopolitical events effect trade. Commercial markets adjust to those changes and with that so do technical and operational requirements of ship types. Simple examples of the new interest in Venezuelan sources of methanol, the new routes of the Arctic requiring ice class tonnage, or the rebuilding of Ukraine & Cuba will take time to develop and significant risk analysis.

The new interest in developing construction with allied shipyards under the “Finland” ice breaker concept or the “bridge” concept of Naval Auxiliary support vessels with new designs and efficiencies look to decrease that time. As commercial shipbuilders we have to meet a different cost standard and deliver according to an investment business plan to compete in a foreign market or for that matter support our military. Our long-term goal this time around is to make sure Yogi is not quoted again and let a new history develop.