U.S. Navy Secretary Carlos Del Toro has been meeting with shipbuilders in Japan and Korea to encourage them to establish new shipbuilding operations in the United States.
The effect could be a game-changer for U.S. shipbuilding by establishing global best practices in the United States.
In the same speech, he announced his objective to “attract the most advanced shipbuilders in the world to open U.S.-owned subsidiaries and invest in commercial shipyards here in the U.S., modernizing and expanding our shipbuilding industrial capacity and creating a healthier, more competitive shipbuilding workforce.”
In 2024, Del Toro told Japanese and Korean shipbuilders: "There are numerous former shipyard sites around the [U.S.] which are largely intact and dormant. These are ripe for redevelopment as dual-use construction facilities for both warships, like Aegis destroyers, as well as high-value chain commercial vessels, such as the ammonia gas carriers that will enable the global transition from fossil fuels to green energy sources like hydrogen. Investment in dual-use shipyards in the United States will create good-paying, blue-collar and new-collar American jobs building the advanced ships that will protect and power the economy of tomorrow."
To optimize the benefits from Japan and Korea, the United States needs to find new U.S.-based facilities so that Japanese and Korean shipbuilders can directly import advanced shipbuilding technology into the United States and train American workers to use these advanced tools and optimize quality and productivity.
The Japanese and Korean shipbuilders should be able to reduce the cost of construction and the construction time that is standard in U.S. shipbuilding by focusing on increasing the efficiencies and lowering the man-hours for each block section required to build a ship. The result will be higher productivity and fewer defects in the construction of commercial and naval ships under the United States flag.
Problems With U.S. Naval Shipbuilding
The problem facing the United States Navy is that U.S. shipbuilders build fewer and fewer commercial ships and so the expertise to apply best practices from commercial shipbuilding to naval shipbuilding is diminished.
In 2023, Under Secretary of Defense Mike McCord, the Pentagon’s top budget officer said U.S. shipyards are challenged to build two destroyers per year, placing them at a competitive disadvantage with China.
Speaking to the U.S. Naval Institute, McCord said: “I’m not hating on DDGs (Destroyer, Guided Missile) – my only point was that last year Congress added a third and the reason we didn’t budget for three is, again, we don’t see the yards being able to produce three a year. We don’t see them being able to produce two a year. And that’s just data. It’s not what we wish to be true. But everybody’s struggling with skilled labor. Everybody’s struggling with the supply chain. So, it’s not getting better very fast from the data that I’ve seen – whether with submarines or DDGs. So, two a year seems to be a reasonable place…”
In January 2023, the General Accounting Office (GAO), the investigative arm of Congress reported: “From FYs 2011-2021, the 10 Navy ship classes we reviewed faced persistent and worsening challenges including a decrease in the number of hours a ship is available for operations or training.
These challenges included:
An increase in the number of working ship parts removed and used elsewhere due to parts shortages
An increase in casualty reports—i.e., reports of events that impair a ship's ability to do its job
An increase in maintenance delays
We have made dozens of recommendations to address these issues, but the Navy has yet to fully implement them all.”
A March 2024 Nikkei Asia report explained the rationale of Del Torro’s visit with Japanese and Korean shipbuilders: “The U.S. previously had 13 public naval shipyards, but nine of them are currently inactive. A number of the closed shipyards have been turned into national parks, container terminals, or naval air stations. However, some are seen to have the potential to be revived for shipbuilding or maintenance.
The need to revamp shipbuilding capacity stems from an alarm at China's rapid fleet expansion. Supported by the world's largest shipbuilding industry, China is expected to expand its battle force of over 370 ships and submarines today to 400 by 2025 and 440 by 2030. The current size of the U.S. Navy at just under 300 ships and submarines is already smaller than China's. The Navy leadership has called for a future fleet size of around 380, but the pace of construction pales in comparison. American shipyards, both private and public, have been struggling to hire enough workers, as the industry struggles to compete with other industries in pay.”
Marine Highway/Military Sealift Ships
One focus for prospective Japanese and Korean shipbuilders might be on Military Sealift ships. There is an urgent need for U.S.-built container ships, Roll-on/Roll-off (RORO) ships, and tankers for the Military Sealift Command (MSC). These vessels could be deployed in commercial and domestic U.S. trades manned by U.S. mariners and owned by U.S. companies as per the Jones Act. They can then be deployed to support U.S. naval operations in a wartime emergency.
In October of 2022, the Commander of the Military Sealift Command Rear Admiral Michael Wettlaufer, warned that MSC “continues to face a shortage of both ships and sailors, and it will take a ‘collective effort’ from government and industry to turn the tide.”
At an event hosted by the Navy League of the United States, Wettlaufer noted: “Specifically, the top challenges currently facing MSC in this area are an atrophied maritime industry, a reduced U.S. flag commercial fleet, and a shortage of ocean-going mariners.”
Wettlaufer said MSC will seek to incentivize commercial participation: “We’ve got to incentivize U.S. flagged shipping,” he said, noting that the number of U.S. flagged ships at their disposal had declined from 282 at the start of this century to 178 today.”
Marine Highway vessels as designated by the U.S. Maritime Administration (MARAD) can help build up the U.S. Military Sealift fleet.
For example, constructing new Marine Highway coastal container ships can reduce the cost of long-haul trucking on a port-to-port basis as they require less horsepower and fuel than trucks on a per-container basis.
The problem is that marine terminal loading and unloading charges at major ports apply the same loading costs for a 15,000 TEU ship as they might apply to a 1,500 TEU ship which is much smaller and requires less manning to load and unload.
Reducing container handling charges for marine highway vessels will make them competitively priced for transporting containers between U.S. ports and allow them to reduce long-haul trucking congestion on U.S. highways, reduce fuel consumption, and ultimately reduce emissions if the ships are powered by low-emission methanol or hydrogen fuels.
To make the benefit clearer, a 1,500 TEU (twenty-foot unit) container ship requires a 20,000-horsepower engine to transport 450 x 40-foot loaded containers. Four hundred and fifty trucks each requiring a 300-horsepower engine will cumulatively require 135,000 horsepower to do the same job as the ship powered by a 20,000-horsepower engine.
Building these ships can augment the U.S. Navy’s Military Sealift fleet and address the shortfalls highlighted by U.S. Navy Rear Admiral Michael Wettlaufer.
The Plan: South Korean and Japanese Investment
U.S. Navy Secretary Del Torro proposes to encourage Korean and Japanese shipbuilders to invest in U.S. shipbuilding and reestablish competitive shipbuilding in the United States.
In order for this plan to succeed, Japanese and Korean companies should be allowed to establish shipyards that they own and operate. This would allow the importation of modern shipbuilding technology and establish global best practices that can be used to train and upgrade American workers and contractors.
The application of electronics to enhance systems integration means that deck and engine operations can be integrated to require less vessel manning. The replacement of curved bows with straight bows not only reduces fuel consumption but also reduces the complexity of construction and therefore manhours.
The dual-use applications of Marine Highway ships to provide coastal shipping services and Military Sealift provide the potential for a growing commercial fleet that can provide logistical support in a wartime emergency. Lastly, systems integration caused by the increased use of electronics allows for new ships operating with less manning at a time when there has been a shortage of trained U.S. mariners.
