(Not) Made in the U.S.A?
SHIPS for America Act Prompts Criticism and Concerns
America used to be a shipbuilding and naval powerhouse. Now? Not so much.
Over the last 65 years, we’ve watched Japan, Korea, and now China take over global shipbuilding. Meanwhile, Washington has largely stood by—until now.
In a move that seems sparked by recent geopolitical tensions, a new bill called The SHIPS for America Act is making waves in Congress. It promises to rebuild America’s maritime strength with a new fleet of 250 U.S.-flagged commercial ships. But here’s the catch—it may not actually require those ships to be built in the U.S.
What’s Proposed in The SHIPS for America Act?
- Over ten years, create a “Strategic Commercial Fleet” of 250 U.S.-flagged vessels that must be “commercially viable” and “militarily useful.”
- Wrap existing programs (Maritime Security Program (MSP), Tanker Security Program (TSP)) into new seven-year contracts—guaranteeing government payments to owners
- Reflagging Loopholes: Relaxed U.S. Coast Guard rules mean foreign-built ships can simply switch to a U.S. flag to count toward the 250-ship goal..
- Domestic Shipbuilding Restrictions that could block real U.S. investment in shipbuilding.
What’s the Problem?
The bill talks a big game about revitalizing American shipyards. However, in reality, it appears to favor foreign-built vessels, simply reflagged to U.S. standards. That’s cheaper and faster—but it doesn’t bring back the jobs or skills we’ve lost.
Worse, U.S. shipyards won’t even benefit from repairs under this legislation—and in the shipbuilding world, repairs are what keep shipyards alive, and workers employed.
Legal and Economic Roadblocks
Coastal Trade Restrictions
Under Sections 53603 and Title V of the bill, any vessel in the new program permanently loses the right to transport cargo between U.S. ports along U.S. coastal routes, even if its contract ends. This cuts off lucrative domestic trade—exactly the work U.S. yards and ships desperately need.
Competitive “Checklist”
A strict approval process mandates that new vessels under the program “will not compete” with existing U.S. vessels. Instead of stimulating fresh investment, many argue that this “locks in” today’s limited fleet, and discourages innovative designs that could benefit emerging markets.
Repair Yards Left Out
Ship repair is the lifeblood of many American yards, providing steady revenue and preserving skilled labor. Shockingly, the SHIPS Act offers no support for maintenance or refit work—further starving the industry.
Bigger Picture: Size and Cargo Matter
- Container Ships: While China builds 24,000-TEU giants, the U.S. will barely field 3,400-TEU vessels by 2026. Without bigger ships, we can’t compete on global routes or meet the needs of our busy ports.
- Tankers and Feeders: Domestic product tankers (MR 2 class) and small “feeder” container ships could relieve port congestion and satisfy emerging coast-to-coast trade lanes—but only if they keep their U.S. coastal trade privileges.
Unfortunately, the bill’s restrictions leave these valuable ship types stranded, unable to serve noncontiguous markets (including Alaska, Hawaii, Puerto Rico) without costly waivers.
Why It Matters
Critics argue the legislation is full of rules that prevent new U.S.-built ships from operating on domestic coastal routes. That means U.S. investors have little incentive to build ships here—because their ships can’t compete.
Here’s an example: Let’s say a U.S. company builds a tanker here at home. Under current law, if it joins the SHIPS program, it cannot carry goods between U.S. ports. That privilege is reserved for a very specific group of vessels. Critics argue that if we allowed U.S.-built ships to do that, they’d become way more valuable—and we’d likely see more investment.
Missed Opportunities:
- Container Ships: Other countries are building mega-sized 24,000-container ships. The U.S.? We’re just now building 3,400-container ships—still a fraction of global standards.
Marine Highway: We’ve talked for decades about easing congestion at U.S. ports by using smaller feeder ships along our coasts. But we haven’t funded or built those vessels either.- New Tech: The bill barely supports next-gen technologies like carbon capture vessels or liquified natural gas (LNG) carriers—ships the world increasingly needs.
A Smarter Path Forward
Critics argue that instead of papering over decline with reflagged tonnage, the U.S. could:
- Target Bulk Carriers
Launch a bulk-carrier revival— “Con-Bulker” hybrids that carry containers and dry bulk. Early builders like Japan and Korea started here, and it’s an ideal way to build up a domestic fleet and train a new workforce. - Tie Shipbuilding to Rebuild Projects
Leverage reconstruction efforts in Ukraine, Gaza and elsewhere—shipping U.S. steel, machinery and building materials on American-flagged vessels. This cargo demand would help underwrite shipyard investment. - Incentivize Repair Work
Fund a robust maintenance program that keeps yards humming between new-build contracts.
Critics of the legislation argue that by aligning maritime economics with national policy—supporting real orders and steady work—the U.S. can rebuild both its shipyards and its strategic sealift capacity.
What’s at Stake?
This isn’t just about economics. A strong U.S commercial fleet means stronger national security. Ships flying the American flag don’t just move cargo—they act as our fourth line of defense.
However, concerns exist that unless we shift focus from reflagging foreign ships to actually building American ones, the SHIPS for America Act may end up dead in the water.
We at the Herd Law Firm are proud to fight for seamen, maritime workers and passengers in all types of personal injury and death claims. As maritime personal injury attorneys (and sailors ourselves!) located in northwest Houston, we never waver in our commitment to help these maritime workers, passengers, and their families when they are injured or mistreated.
7/11/2025
Research and Image Source: Encyclopedia Britannica, Maritime Reporter and Engineering News
