Demand for Shipbuilding is Peaking in Philadelphia

Passing the SHIPS for America Act would provide the framework and resources to rebuild the long dormant commercial industry.

A little over a year ago Hanwha – the South Korean manufacturing conglomerate that’s one of that’s one of that country’s “big three” shipbuilders – bought the Philly Shipyard, a historic (you guessed it) shipyard in South Philadelphia. It was a major get for the U.S. government’s attempt to juice the domestic shipbuilding industry, which is a fraction of its former self, crowded out by rivals that have invested heavily in the maritime sector.

Hanwha has vowed to invest billions of dollars into the location and dramatically scale up its workforce, and the shipyard is already swamped by demand. The Wall Street Journal reported earlier this month that, between numerous government contracts and an order for a dozen medium-range tankers and liquified natural gas vessels (the largest single commercial order in decades), Philly has more work than it has space to do it in and is actively looking to expand.

It’s less of a hint than it is a big red flashing light that signals the dormant economic potential behind reviving the domestic shipbuilding and maritime sectors. Building and maintaining ports and shipyards requires significant capital investment and a lot of time. But then, manufacturing port and shipyard equipment – like dry docks or ship-to-shore cranes – and shipbuilding itself requires long supply chains for everything from steel and aluminum to diesel engines to electrical cable to paint. If all that can be induced to happen in the United States, shipbuilding will immediately be a major hub of domestic manufacturing activity.

It already is! U.S. naval vessels are required by law to be built in the United States, and defense spending keeps major shipyards across the country running at full tilt. A commercial sector running alongside it, however, would not only create a ton of demand for all the manufactured products that go into making an oceangoing vessel but alleviate the well-documented production delays and cost overruns that have beleaguered naval shipbuilding. In effect, resuscitating commercial shipbuilding would make the country more secure.

President Trump last April signed a “Restoring America’s Maritime Dominance” executive order aimed at boosting U.S. shipbuilding. The order called for the creation of a Maritime Action Plan to assess how to use available authorities and resources to invest in and expand the maritime industrial base and identify components in the maritime supply chain that are essential to its growth. It has since awarded millions of dollars to workforce training programs, proposed tax incentives through the creation of “maritime prosperity zones” and proposed tariffs on Chinese-made cargo-handling equipment and fees on Chinese-made ships.

That’s because China now dominates the global maritime industries. It’s become the world’s largest shipbuilder and manufacturer of port infrastructure and the use of its logistics software is expanding rapidly. Just last month a deal struck by two of its state-owned enterprises resulted in a $7 billion deal for 87 oceangoing vessels ranging from ultra-large bulk carriers to small box ships. In 2024, one of the companies involved built more commercial vessels by tonnage than the entire U.S. shipbuilding industry has built since World War II, and that was before it merged with its main rival, which was another Chinese state-owned firm.  None of these dominant positions in shipbuilding would have been achieved without dedicated and concerted government support. A United States Trade Representative investigation found all those state-backed shipyards “may outbid their competitors with low pricing, expand capacity and set prices without regard for market signals, and generally seek to gain market share without regard to returns.” That in turn, has “severely disadvantaging U.S. companies, workers, and the U.S. economy generally through lessened competition and commercial opportunities and through the creation of economic security risks from dependencies and vulnerabilities.”

We should do something about that and feed the growing appetite for shipbuilding in the United States. You can see it in the call for one of those “maritime prosperity zones” to induce more shipbuilding along the Great Lakes; a similar effort is underway in the California delta. There are also 118 members of the U.S. House of Representatives and more than a dozen U.S. senators who are supporting the SHIPS for America Act, which would provide the framework and resources needed to rebuild the industry, revitalize the industrial base and build up the workforce needed to sustain it. Passing SHIPS for America would enact a major industrial policy that for decades would pay dividends to the country’s longterm economic health.

Has your lawmaker endorsed it yet? You can check here for the House and here for the Senate. If they haven’t, ask them to do so; send them a letter!

We’ll be keeping an eye on big shipbuilding news – and movement on the SHIPS for America Act – as it develops.