New Maritime Statecraft

Update the Merchant Marine Act & Jones Act

The U.S. Navy is confronting its gravest challenge since the fateful morning of December 7, 1941, a day synonymous with tragedy and its profound impact on American history. A peer competitor with the financial resources, population capacity, and industrial might, unlike any other competitor in history, seeks to challenge the current world order.

In the past year the Secretary of the Navy, Carlos Del Toro, called for "bold maritime statecraft" not just as a strategic pivot but as a last-ditch effort to steer the Navy away from the shoals of potential defeat. The backdrop is the rising tide of competition from the People Republic of China (PRC) along with the salvos of missiles and drones launched against our ships in the Red Sea by Iranian backed proxies. While these threats have been met with overwhelming success by brave, competently trained sailors and the courageous leadership of their officers, Del Toro’s request for a new maritime statecraft is defenseless without immediate action from and the full support of Congress led by the Presidency-Elect Donald J. Trump.

American statesmen, such as Senator Roger Wicker, offers no-nonsense leadership as the incoming Chairman of the Senate Armed Services Committee. He brings a bold vision and pragmatic resolve essential to propel the Navy into the Electro-Digital era, where AI-driven advancements dwarf the industrial revolution, rendering it a mere echo of the Stone Age. Make no mistake, if President-Elect Trump and the new Republican led Congress do not act swiftly, our nation will be on the brink of defeat within the “Davidson window”.

Impact of Policy and Legislation

The American Nation has responded with foresight and success in our past. Congress passed the Merchant Marine Act of 1936, codified as 49 Stat.1985. It was a landmark effort to revitalize the United States’ maritime industry and position it as a global leader in both commerce and national defense. By incentivizing the construction of modern U.S. built ships, improving seafarer training, and offering subsidies to American shipbuilders and shipping companies, the Merchant Marine Act established a robust merchant marine that could serve as both a commercial powerhouse and a military auxiliary during wartime. In the years following its enactment, the Merchant Marine Act provided the framework for significant advances in U.S. shipbuilding. The Act emphasized American-made materials and American labor to boost domestic industries and create a skilled maritime workforce that perform as an installment in protecting our nation. The direct result was that our nation’s shipyards flourished, producing thousands of vessels to support the war effort with the construction of 9,975 major combatants and 84,204 landing craft for a total of 94,179 ships from 1941 and 1944.

However, this golden age of American shipbuilding waned in the post-war years as the industry faced increasing competition from foreign shipyards, particularly in Asia and war-torn Europe, where labor costs were lower, and governments heavily subsidized ship production.

Despite the Merchant Marine Act’s initial subsidies and protections, the high costs of building and operating ships under the U.S. flag proved to be a disadvantage in a globalized market. By the late 20th century, the United States lost its competitive advantage in commercial shipbuilding. Today, the U.S. shipbuilding industry’s only lifeline are military contracts by a single customer, unable to produce commercial vessels capable of competing globally. The long-term impact of the Merchant Marine Act, from nearly a century ago, has been overshadowed by the rise of international competitors, standing in stark contrast to the People’s Republic of China’s emergence as a dominant global force in shipbuilding today.

Unsurprisingly, the PRC enacted its own Maritime Act ~20 years ago and has emerged as the world leader in shipbuilding during the past thirty years, with an industrial capacity that dwarfs the United States in both commercial and military production. China’s government strategically invested in securing supply chain raw material, shipyard capacity, technology, and workforce development, enabling it to dominate global commercial vessel construction. By 2020, Chinese shipyards accounted for over 40% of the world’s shipbuilding output, far surpassing their closest competitors in South Korea and Japan. This dominance naturally extended to military shipbuilding as the PRC rapidly expanded its navy, including aircraft carriers, destroyers, and submarines, to project its power globally.

The disparity between the U.S. and Chinese shipbuilding industries highlights the significant policy differences between the PRC and our nation today. The Merchant Marine Act of 1936 was designed for an era when the U.S. was a leading industrial power with little international competition. While it prioritized domestic labor and materials that incentivized a high-cost structure, the Act eventually became unsustainable in a globalized competitive economy. Meanwhile, China’s state-driven approach has leveraged economies of scale, centralized planning, low labor costs, and aggressive subsidies to achieve unmatched production capacity and efficiency for the sole purpose of competing with and destroying America’s industrial might.

Antiquated Infrastructure and Aging Workforce

The U.S. Navy’s shipyards are grappling with a workforce that is both aging and shrinking, posing significant challenges to fleet maintenance and expansion. A 2017 RAND Corporation report highlighted that the percentage of civilian shipyard workers with less than ten years of experience rose from 35% in fiscal year 2006 to nearly 50% in fiscal year 2014, while those with 20 to 29 years of experience declined from 31% to 12%. This shift indicates a loss of seasoned experts and a growing reliance on less-experienced personnel, impacting overall productivity.

The Government Accountability Office (GAO) in 2020 identified workforce performance and capacity as primary factors causing maintenance delays for aircraft carriers and submarines. The GAO noted that high overtime rates among production shops, averaging 25% to 32% between fiscal years 2015 and 2019, with peaks up to 45%, led to diminished productivity.

In 2023, the President of the Shipbuilders Council of America testified before Congress that the most pressing challenge for private shipyards is attracting and retaining a skilled workforce. While increased federal investments in trade education programs have provided some relief, significant challenges remain. The cyclical nature of military contracts creates instability, as the absence of commercial vessel construction offers little opportunity to balance or stabilize the demand for shipyard labor.

These ongoing workforce challenges underscore the need for a strategic shift in shipbuilding akin to the Marine Maritime Act of 1936. Investments in training, recruitment, and retention must be made to ensure that U.S. shipyards can effectively support naval readiness, increase ship production, and reduce costs.

As the PRC has seamlessly integrated its commercial and military shipbuilding sectors during the past thirty years, using its commercial dominance to support its naval expansion, the PRC built thirty naval combatants in 2023 alone. The U.S. Navy in comparison launched three battle force ships according to a CBO report. The PRC’s dual-use industrial strategy has enabled China to not only challenge U.S. Naval supremacy, particularly in the Indo-Pacific region, but also to dominate the region with more than 450 naval combatants by 2030.

The Merchant Marine Act of 1936 represented a pivotal moment in U.S. maritime history, underscoring the importance of a strong domestic fleet for both commerce and defense. Yet its legacy serves as a cautionary tale about the challenges of maintaining competitiveness in a rapidly evolving global market and threatening capacity of a peer competitor. As the United States faces growing strategic and economic competition from China, the lessons of this Act, both its achievements and its shortcomings, remain more relevant than ever. To reclaim leadership in shipbuilding, the U.S. must adopt a whole of government approach that is integrated and aligned with a strategy that balances innovation, cost efficiency, scale, and competitive advantage.

Wicker’s Intent on Building a New Navy

Senator Wicker of Mississippi brings the necessary muscle to shipbuilding. Yet shipbuilding isn’t just a strategic priority for him, it’s personal as proven by the growth of Bollinger Shipyard during the past decade in his home state. He knows that without the necessary industrial capacity, all the strategy in the world is just a hallucination. By focusing on new and reinvigorated shipyards up and down the eastern seaboard and leveraging public-private partnerships isn’t just pragmatic; it’s essential to our nation’s competitive survival. But even Wicker’s Armed Services committee can’t solve the real problem: a bloated, risk-averse bureaucracy where no single program has been delivered on time and within budget in thirty years. This inadequate performance reveals the bureaucratic rust and rot under the grey painted hull of the service. For more than 30 years naval and congressional leadership has failed to deliver. The DoN is burdened by an Industrial Age, congressionally mandated processes together with its bureaucratic malaise. It’s time for a change.