The situation isn’t hopeless, but the United States had better get moving if it wants to reclaim its status as a leading shipbuilder.
That’s the conclusion reached by Loren Thompson, a highly regarded national defense expert who runs the non-profit Lexington Institute. Thompson’s commentary appeared on the Forbes website in late July.
He began with a quick recap of America’s maritime history, then said that modern-day “U.S. shipbuilding and maritime trades … have virtually collapsed over the last generation. A nation that led the world in commercial shipbuilding at key junctures in its history today builds less than 10 vessels for oceangoing commerce in a typical year. China builds over a thousand such ships each year.”
Those weren’t the only sobering statistics offered by Thompson, who holds doctoral and master’s degrees in government from Georgetown University and who has taught at Harvard. “The entire U.S.-registered fleet of oceangoing commercial ships numbers fewer than 200 vessels, out of a global total of 44,000,” he wrote. “And despite trade flows to and from America exceeding a trillion dollars annually – the vast preponderance of which travel by sea – U.S.-registered ships carry barely 1% of that traffic. That is quite a decline from the year I was born, 1951, when the U.S. Merchant Marine transported a third of all global trade.”
The writer then pointed out that China possesses the world’s largest fleet of warships (around 350), while the U.S. Navy is “struggling to get above 300…. The Navy’s request for ship construction funds next year envisions building only four combat vessels (out of eight total), a level of effort that if sustained would guarantee Chinese maritime dominance by 2030.” Ironically, he added, the largest exporter of containerized cargo to the U.S. “is a shipping company owned outright by the Chinese government.”
Thompson also touched on the shipboard manpower crisis in the U.S. Merchant Marine before returning to the subject of China.
“We know that Beijing’s long-term goal is to dominate global supply chains for vital industrial goods, so the fact China is outproducing America in large commercial vessels 100-to-1, that it increasingly dominates traffic, and that it is securing control of ports along key trade routes, should have elicited a policy response from Washington,” he wrote. “So far, it has not. Meanwhile, Beijing’s ability to dominate the future naval balance in its own region – the industrial heartland of the new global economy – is increasingly evident.”
Thompson identified the decline of domestic shipbuilding as “just one facet of America’s broader deindustrialization, a process that has seen the land of Edison and Westinghouse gradually abandon the production of every industrial product from smartphones to aluminum since the Cold War ended.”
For example, he said, the nation has only a single manufacturer of large aircraft.
He also criticized former President Ronald Reagan’s decision to eliminate shipbuilding subsidies “without seeking reciprocal action from other nations. That move was never revisited, even though the shipbuilding industry lost 40,000 workers during the Reagan years. Time will tell whether the Biden administration has the sense to revise naval shipbuilding plans, which at the moment could spell doom for some of the surviving U.S. shipyards.”
Moreover, Thompson said the Trump administration’s last industrial-base report to Congress correctly stated that the largest contributing factor of declining U.S. competitiveness in global shipbuilding has been state intervention from competitor countries.
“In other words,” Thompson wrote, “China and other shipbuilding nations subsidize their industries, at the expense of America’s shipbuilders. So, what is Washington going to do about it?”
He concluded by identifying three options: “institute expanded cargo preferences for U.S.-built and -manned vessels, directly subsidize U.S. shipbuilders, or persist in our current dream-like state until the destruction of U.S. maritime supremacy is complete. I’m not holding my breath waiting for an effective policy response from Washington.”