The global ocean shipping and shipbuilding industries are essential to international trade and economic growth. Over the past decade, China has emerged as the dominant player in both sectors, while the United States has experienced a relative decline. This report provides a comprehensive analysis of the US and Chinese ocean shipping and shipbuilding industries over the last ten years, highlighting key trends, identifying weaknesses in the US sector, and proposing detailed strategies to revitalize the industry.
The global shipping industry has expanded significantly between 2013 and 2023, with total seaborne trade increasing from 9.8 billion tons to 11.9 billion tons. Containerized trade grew at an annual rate of 3.5%, with China accounting for more than 30% of global container throughput. The global merchant fleet increased from 1.6 billion deadweight tons (DWT) in 2013 to 2.2 billion DWT in 2023, with China playing a pivotal role in this expansion. Meanwhile, the US share of global shipping remains modest, accounting for approximately 5% of seaborne trade by volume. The US-flagged fleet has steadily declined from 3,600 vessels in 2013 to fewer than 2,000 in 2023, representing less than 1% of the global fleet. The US trade imbalance continues to exacerbate reliance on foreign-flagged vessels, reducing domestic shipping demand.
China’s ocean shipping industry has cemented its dominance, handling over 30% of global container traffic and operating seven of the world's ten busiest ports. Its fleet size has doubled from 150 million DWT in 2013 to over 300 million DWT in 2023, making China the largest ship-owning nation. The Belt and Road Initiative (BRI) has further expanded China’s maritime influence, with investments in port infrastructure across Asia, Africa, and Europe.
The global shipbuilding industry remains concentrated in China, South Korea, and Japan, which together account for over 90% of global shipbuilding output. China has held the largest order book, capturing more than 40% of global shipbuilding orders, followed by South Korea at 30% and Japan at 20%. Technological advancements in shipbuilding have positioned South Korea as the leader in high-value vessels, such as LNG carriers, while China has dominated in bulk carriers and container ships. In contrast, the US shipbuilding industry remains a niche player, producing primarily military vessels. The US accounts for less than 1% of global shipbuilding output, with key shipyards including Huntington Ingalls Industries, General Dynamics, and Philly Shipyard. The commercial shipbuilding sector in the US has all but disappeared due to high production costs and a lack of competitiveness.
China’s shipbuilding sector has grown exponentially, capturing over 40% of global output in 2023. State support through subsidies, tax incentives, and strategic investments has enabled Chinese shipyards to outcompete rivals. Major Chinese shipbuilding enterprises such as China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) continue to dominate the market, benefiting from economies of scale and a robust supply chain.
Several factors contribute to China’s maritime dominance, including economies of scale, state support, advanced infrastructure, and an extensive global network through the BRI. By contrast, the US faces several weaknesses, including high labor and production costs, a declining merchant fleet, limited commercial shipbuilding capacity, and a significant trade imbalance. Regulatory hurdles and environmental compliance costs further exacerbate inefficiencies in the US maritime sector.
To revitalize the US ocean shipping and shipbuilding industries, several targeted policy and regulatory reforms are necessary:
Modernization of the Jones Act – The Jones Act, which mandates that domestic maritime transport between US ports must be conducted by US-built, owned, and crewed vessels, serves to protect the US shipping industry. However, its restrictive requirements contribute to higher shipbuilding costs, limiting competitiveness. Reforms should include selective modifications, such as permitting the use of foreign-built hulls with final assembly in US shipyards to lower costs while retaining domestic employment. Additionally, the government could introduce an expedited waiver system to allow for temporary exemptions in cases of urgent logistical needs, balancing national security interests with economic viability.
Strategic Subsidies and Tax Incentives – The federal government should introduce structured financial incentives to promote domestic shipbuilding and fleet expansion. These could include targeted tax credits for companies investing in shipyard modernization, grants for research and development in green ship technologies, and subsidies that cover a percentage of construction costs for new US-built commercial vessels. Special financing programs similar to the Title XI Federal Ship Financing Program should be expanded to facilitate low-interest loans for new ship construction, fleet renewal, and infrastructure expansion.
Streamlining Environmental and Regulatory Compliance – While maintaining rigorous environmental and safety standards, streamlining compliance processes can significantly reduce costs and delays for US shipbuilders and operators. Regulations should be reviewed to eliminate redundancies and introduce digital reporting systems that enhance efficiency. Investment in green ship technology should be incentivized through tax breaks for shipowners transitioning to low-emission vessels. In addition, a phased compliance timeline should be introduced for new environmental mandates, giving shipbuilders and operators sufficient time to adapt while maintaining regulatory objectives.
Investments in infrastructure are also critical:
Port Modernization and Expansion – Upgrading US ports with deeper harbors, automated cargo handling, and improved intermodal connectivity to accommodate larger vessels will enhance operational efficiency and reduce port congestion. This requires significant federal and private sector investment in dredging projects, crane automation, and container stacking technology. Additionally, integrating smart port systems that use real-time data analytics for berth scheduling and cargo flow management can reduce turnaround times and improve overall port throughput. Increasing collaboration between port authorities and logistics firms to optimize space utilization and reduce bottlenecks will further enhance efficiency.
Development of an Advanced Logistics Network – Expanding rail and highway networks linked to major ports will streamline the movement of goods, reducing supply chain bottlenecks and enhancing inland transportation efficiency. Investments should focus on double-tracking rail lines near key maritime hubs, constructing dedicated freight corridors, and modernizing highway interchanges to handle increased truck traffic. Incentivizing private investment in intermodal transfer facilities will further improve cargo fluidity, ensuring seamless transitions between maritime, rail, and trucking networks. Strengthening inland distribution hubs with warehouse automation and predictive analytics can reduce congestion at ports and optimize supply chain flow.
Adoption of Digital and AI-Driven Logistics – Implementing AI-powered cargo tracking, automated scheduling, and blockchain-secured shipping documentation will improve operational transparency and security. Utilizing AI-driven predictive analytics will enable more accurate demand forecasting and reduce delays caused by inefficient cargo handling. Blockchain-based documentation can eliminate paperwork redundancies, enhance security, and prevent fraudulent transactions by providing a tamper-proof digital ledger for all shipping records. Deploying IoT sensors on shipping containers and port infrastructure will enable real-time tracking of goods, reducing the risks of loss or theft while improving overall logistics efficiency. Standardizing digital platforms across the supply chain will also facilitate better coordination between shipping companies, customs authorities, and logistics providers, reducing unnecessary delays and enhancing cargo movement.
Strengthening the US-flagged fleet requires bold initiatives:
Incentivizing Domestic Ship Construction – Providing loan guarantees and government contracts to shipbuilders will encourage the construction of more US-flagged vessels. Expanding the Title XI Federal Ship Financing Program can offer long-term, low-interest loans to shipowners and operators willing to invest in new builds. Additionally, tax credits for shipyards that modernize production facilities and incorporate cutting-edge shipbuilding technologies can enhance efficiency and cost-effectiveness. The creation of a National Maritime Revitalization Fund, modeled after similar programs in leading shipbuilding nations, could further support domestic ship production and ensure a steady pipeline of vessels for both commercial and military applications.
Public-Private Partnerships for Fleet Expansion – Collaborations between the private sector and government to finance new vessel construction can enhance fleet competitiveness. Establishing incentive-driven leasing programs where the government subsidizes private sector investments in shipbuilding can lower barriers to entry for smaller shipping firms. Encouraging defense contractors to co-develop commercial and dual-use vessels through cooperative agreements can maximize shipyard capacity utilization while bolstering national security. Creating long-term charter agreements for US-flagged ships in government and commercial trade routes can provide shipowners with the financial stability needed to commit to new vessel acquisitions.
Revival of the US Merchant Marine Program – Strengthening the training and recruitment of merchant mariners will ensure a skilled workforce is available to operate the fleet. Expanding the Maritime Security Program (MSP) and related workforce development initiatives can provide scholarships and financial incentives for individuals pursuing careers in maritime operations. Partnering with community colleges, technical institutes, and maritime academies to develop specialized training programs will prepare future mariners for the evolving demands of the industry. Additionally, creating an apprenticeship system, similar to those found in European shipbuilding nations, will provide hands-on experience and a clear career pathway for new entrants into the maritime sector. Establishing grants and incentives for shipping companies that prioritize the employment of US-trained mariners will further strengthen the domestic workforce.
Revitalizing the shipbuilding industry is paramount:
Investment in Commercial Shipbuilding – Encouraging the diversification of shipyards beyond military vessels into commercial and high-value ships is crucial for industry resilience. Expanding government-backed loan guarantees and tax incentives for private investors in commercial shipbuilding can stimulate growth. Establishing dedicated grants for shipyards transitioning to the production of commercial vessels—such as container ships, LNG carriers, and offshore wind support vessels—will reduce reliance on foreign-built ships. Developing regional shipbuilding clusters where suppliers, shipyards, and logistics hubs collaborate on projects will create economies of scale and drive innovation.
Research and Development in Green and Autonomous Ships – The US should lead in next-generation shipbuilding technologies, including carbon-neutral vessels and AI-powered navigation. Increased federal funding for research into hydrogen fuel cells, ammonia-powered engines, and battery-electric propulsion systems will accelerate the transition to sustainable shipping. Establishing public-private R&D partnerships between universities, shipbuilders, and technology firms will foster advancements in autonomous vessel technology, improving efficiency and reducing labor costs. Creating test beds for AI-driven navigation systems in designated maritime zones will enable real-world trials, ensuring regulatory compliance and operational safety.
Developing a Skilled Maritime Workforce – Expanding vocational training and engineering programs will ensure the availability of skilled labor for the shipbuilding industry. Partnering with maritime academies, trade schools, and apprenticeship programs to offer hands-on training in advanced manufacturing techniques, robotics, and ship design will address workforce shortages. Federal and state-level workforce development grants should be allocated to support retraining programs for workers transitioning from declining industrial sectors. Encouraging mentorship and internship opportunities within major shipyards will provide young professionals with the experience needed to sustain the industry’s growth. Additionally, creating workforce exchange programs with allied shipbuilding nations can facilitate knowledge-sharing and skill development in cutting-edge maritime technologies.
To enhance global competitiveness, the US must pursue international trade and strategic alliances:
Strengthening Trade Agreements – Reducing tariffs and increasing export incentives will help US shipbuilders and fleet operators gain a stronger foothold in global trade. The US should negotiate favorable maritime trade agreements with key global markets to facilitate the export of domestically built vessels and maritime technologies. Establishing bilateral agreements that prioritize US-built ships for commercial and defense-related contracts will enhance economic opportunities for shipyards. Expanding tax incentives for American shipping companies operating internationally can further strengthen their competitive position while encouraging the use of US-flagged vessels.
Alliances with Allied Nations – Partnering with European and Indo-Pacific allies, such as Norway, South Korea, and Japan, on shipbuilding projects can counterbalance China’s growing influence. Establishing joint research initiatives in advanced shipbuilding technology, including green propulsion systems and digital shipyard automation, will ensure the US remains at the forefront of innovation. Coordinating joint military and commercial shipbuilding projects with allied nations will not only strengthen diplomatic ties but also create a more resilient supply chain. Developing shared naval infrastructure projects, such as logistics hubs and maintenance facilities, can enhance interoperability among allied maritime forces and commercial operators.
Building a Domestic Maritime Supply Chain – Reducing dependence on foreign components for shipbuilding will improve US resilience and security. Investing in the domestic production of key shipbuilding materials, such as specialized steel, propulsion systems, and navigation electronics, will decrease reliance on imports and protect against global supply chain disruptions. Providing grants and low-interest loans to manufacturers of maritime components will encourage domestic production and innovation. Establishing a national maritime supply chain strategy, in collaboration with industry leaders and government agencies, can ensure a steady flow of resources needed to support US shipbuilding growth. Strengthening cybersecurity measures within the domestic supply chain will also safeguard against intellectual property theft and cyber threats posed by adversarial nations.
Under the banner of America First, it is time for the United States to reclaim its leadership in ocean shipping and shipbuilding. The decline of these industries has not only weakened national security but also put the US at a strategic disadvantage in global trade. Rebuilding a strong maritime sector is not just an economic necessity but a matter of national resilience. With bold policy reforms, robust infrastructure investment, and a reinvigorated workforce, the US can close the gap and once again lead the world in shipbuilding and maritime commerce. The time for action is now — by prioritizing American industry, fostering innovation, and securing strategic alliances, the US can chart a course toward a stronger, self-reliant, and globally competitive maritime future.
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