September 5th, 2024

Why Can't the U.S. Build Ships?

U.S. shipbuilding capacity has declined significantly, with only five large commercial ships ordered in 2022, while China's capacity is 232 times greater, hindered by high costs and protectionist laws.

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Why Can't the U.S. Build Ships?

The decline of U.S. shipbuilding capacity is a long-standing issue, with commercial shipbuilding virtually nonexistent today. In 2022, the U.S. had only five large oceangoing commercial ships on order, compared to thousands from China and South Korea. The U.S. Navy estimates that China's shipbuilding capacity is 232 times greater than that of the U.S. The high costs of U.S. shipbuilding, which can be two to four times more expensive than in other countries, are exacerbated by protectionist laws like the Jones Act, which limit competition. Historically, the U.S. was a leader in shipbuilding during the 19th century, particularly with wooden ships, but failed to adapt to the transition to steam and metal ships, leading to a decline in competitiveness. Despite efforts during World War I and World War II to ramp up ship production, the U.S. did not capitalize on its wartime shipbuilding successes to establish a robust commercial industry post-war. Instead, it reverted to less efficient methods and faced high labor and material costs, resulting in a marginal role in global shipbuilding by 1950. The U.S. shipbuilding industry has struggled to innovate and compete internationally, leading to a reliance on foreign-built ships for a significant portion of its maritime trade.

- U.S. commercial shipbuilding is nearly nonexistent, with only five large ships ordered in 2022.

- The U.S. Navy estimates China's shipbuilding capacity is 232 times that of the U.S.

- High costs and protectionist laws hinder U.S. shipbuilding competitiveness.

- Historical leadership in shipbuilding has not translated into modern competitiveness.

- Post-war, the U.S. failed to leverage wartime production successes for commercial shipbuilding growth.

Link Icon 11 comments
By @pjc50 - 8 months
That's easy: because the US is a nuclear armed power, the pacific aircraft carrier called "Japan" is friendly, and there hasn't been a Pearl Harbor. Everything follows from there.

While there is peace, US domestic shipbuilding fundamentally doesn't "matter" all that much politically, not compared to all the thousands of other daily issues or the big issue, tax. The article makes clear that all previous efforts at onshoring shipbuilding, including the hugely successful war efforts, involved spending a lot of public money.

If you ask the average taxpayer, how much do they want to spend on subsidies for US shipyard workers, what answer are you going to get?

(I also think the Jones Act, like other protectionism, keeps the industry intact but inefficient, another uncomfortable choice)

>> high cost of inputs, particularly labor and steel

Well, yes. A side effect of being a rich country is expensive labour because workers have other options.

> But it now faces a potential naval adversary, in the form of China, with dramatically higher shipbuilding capacity

The US has something like 5,000 live nuclear warheads, use of which might significantly reduce Chinese shipping if it comes to that.

By @treebeard901 - 8 months
This would not be an issue if major wars were not popping up everywhere or if China has not been building a naval fleet to challenge the U.S.

If China and the U.S. get into a conflict, like every war it will be a question of war production. It takes a long time to build a modern ship. It takes even longer to build a shipyard capable of producing modern ships.

Any great power war will be long and drawn out unless nukes are used.

In a defense of Taiwan or anywhere else in the South China Sea, the defenders advantage will play a role. China with it's numerous shipyards and hypersonic weapons could easily keep the U.S. Navy out and then even more easily out produce it to replace lost ships.

It's also a questionable strategy to outsource your ship building to the two countries closest to your only potential naval rival. Usually countries fighting protracted long wars do not put their primary means of production next to enemy forces.

Hopefully things remain peaceful and this never matters.

By @mrlonglong - 8 months
Corporate and Wall Street in the pursuit of profit chose to offshore a lot of manufacturing. It's not going to be easy or quick to rebuild these. To win a war you have to have the capacity to quickly build replacements and hold onto resources you need. The answer is not to play the game.
By @kmerroll - 8 months
I would venture the implied discussion is about more than shipbuilding. Resources, labor, regulation, and other factors raised in the article are endemic across lots of areas and seems symptomatic of market forces and government policy. As a counter argument, I have to ask why the U.S. needs to build ships faster, larger, cheaper than other countries? The U.S. certainly seems to be able to build infrastructure and housing reasonably competitively.
By @osnium123 - 8 months
Do the same factors also apply at our relative incompetence at building planes that don’t crash and semiconductors?
By @h_tbob - 8 months
Americans are pretty much only good at making IP now… which is more valuable from a monetary standpoint.
By @turnsout - 8 months
Ah yes, we will need ships for the coming US/China war where both sides agree to confine the conflict to the water.
By @pirate787 - 8 months
TLDR; Labor unions and protectionism.
By @Eumenes - 8 months
I live near a major shipyard. The answer is unions. They throw a fit almost weekly.