Ellen M. Chang, Managing Director, CapZone Impact Investments LLC
America still rules the high seas, but its perch is waning. America used to be a great shipbuilding nation; its capabilities have already eroded. Yet America remains creative, innovative, and determined. The task now is to harness that energy and focus it on restoring maritime prowess before strategic advantage at sea slips away.
Maritime strength underpins American power because it secures military logistics, ensures energy flows like oil and liquefied natural gas (LNG), transports critical minerals for batteries and semiconductors, supports grain exports that feed the world, and enables high-end manufacturing reliant on timely imports. Without a robust fleet and infrastructure, the United States risks choke points in trade and defense that adversaries can deliberately exploit. The United States must restore its maritime capabilities across commercial sectors to provide the foundation for naval dominance and reduce strategic dependence on adversaries’ production and logistics capabilities.
Where America Stands Today
The U.S.-flag commercial fleet, which flies the American flag and meets domestic crewing and ownership rules, now carries only a tiny fraction of global cargo, with its share of world tonnage shrinking over decades. It is now less than 2%, down from more than half of global tonnage in the mid-twentieth century, and numbers fewer than 100 ships in international trade compared to thousands under foreign flags. In practical terms, the United States would struggle in a crisis to move its own cargo on its own bottoms while competitors redirect state-influenced fleets at will.
Domestic shipbuilding and repair capacity fare little better. The United States has a limited number of yards capable of handling large vessels, with long backlogs for both commercial and naval work and constrained dry docks that limit simultaneous repairs. This brittle capacity makes surge maintenance and rapid expansion of the fleet difficult just when great-power competition demands flexibility.
This erosion stems from decades of underappreciation and underinvestment in our commercial maritime capacity. In the 1980s, under the pressure to compete with the Soviet Union and build a fleet of 600 ships under Secretary of the Navy John Lehman, the United States shifted shipbuilding capacity toward bespoke naval programs. As China entered commercial shipbuilding in the early 1990s, U.S. policy doubled down on globalization, offshoring manufacturing to lower-cost countries, underinvestment in infrastructure, and relying on fragmented policies that favored short-term savings over long-term resilience. Only recently has Washington begun to recognize that a healthy commercial shipbuilding base is essential to offset the waxing and waning of naval procurement cycles.
Why Maritime Power Matters Now
Great-power competition now plays out in shipyards and sea lanes as much as in carrier strike groups. China’s dominance in shipbuilding and its massive merchant fleet—over 5,000 vessels—give Beijing a structural edge in controlling sea lanes, shaping global shipping markets, and projecting power.
At the same time, America relies on maritime routes for roughly $2 trillion of trade into the U.S. market and depends on sea lanes for key exports such as LNG and agricultural commodities. This dependence threatens U.S. independence and deterrence when rivals can slow, redirect, or condition access to shipping, turning logistics into a pressure point rather than a neutral backdrop.
A rival that can influence shipbuilding, shipping finance, and port infrastructure can disrupt U.S. access to energy, munitions inputs, and industrial components without firing a shot. That reality makes commercial maritime strength—not just warship counts—a central pillar of deterrence and economic security.
Key Pillars of Restoring Maritime Capabilities
1. Revitalizing U.S. Shipyards and Repair Capacity
The United States cannot simply throw money at aging infrastructure and hope for different results. It must modernize both public and private yards through automation, digital engineering, and more standardized production. By integrating robotics and 3D printing into the shipbuilding and repair process, the country can reduce massive maintenance backlogs for the Navy and Coast Guard while simultaneously creating capacity for commercial work.
The key shift is moving from a “bespoke” model of shipbuilding—where each hull is essentially a custom project—to a standardized, high-rate production environment with common hulls and modular designs across classes and even across military and commercial fleets. That evolution will require confronting entrenched incentives that reward customization, change orders, and program uniqueness rather than throughput and repeatability.
2. Rebuilding the U.S.-Flag Commercial Fleet and Sealift
To grow the U.S.-flag commercial fleet, the United States needs smarter, targeted incentives, not just aspirational language. This includes expanding “cargo preference” policies—ensuring a meaningful percentage of U.S. government cargo moves on U.S. ships—and creating tax-advantaged financing tools that make it commercially rational to build and operate under the U.S. flag.
A credible “surge sealift”—the ability to rapidly deploy military hardware and supplies across oceans—depends on having a vibrant commercial sector to draw from during times of crisis. Adversaries now calculate not just the number of U.S. carriers, but how many commercial hulls Washington can call on in the first weeks of a conflict without relying on foreign charters. Ensuring that moving an armored brigade or critical munitions is a planning detail rather than a last‑minute scramble is central to deterrence.
3. Strengthening Ports and Waterfront Industrial Hubs
Ports should be more than just transit points; they should function as waterfront industrial and innovation clusters. Targeted investments in port infrastructure must prioritize energy reliability through local microgrids and shore power, allowing ships to shut down engines at berth while maintaining operations.
Building ports as climate-resilient and technologically advanced hubs—co‑locating ship repair, advanced manufacturing, maritime technology firms, and workforce training—ensures that the “first and last mile” of the supply chain is as secure as the sea lanes themselves. Designing ports to ride out storms and prolonged grid disruptions also hardens them against sabotage, cyber‑physical attack, and coercive disruptions.
4. Harnessing Private Capital and Allied Partnerships
Public funding alone will not be enough to restore maritime strength at the scale and speed required. The SHIPS Act, a bipartisan bill reintroduced in April 2025 to revitalize U.S. shipbuilding, expand the U.S.-flag merchant fleet, and strengthen maritime infrastructure amid competition from China, would authorize $250 million per year for 10 years (FY26–FY35) for domestic shipbuilding projects—a $2.5 billion authorization pool. It proposes to expand Assistance for Small Shipyards grants to $100 million annually, a significant increase over historic single‑digit million appropriations. This is still paltry when juxtaposed against estimates that China has poured tens of billions of dollars—over $90 billion—into its shipbuilding industry over the last two decades.
The gap is not only financial; it reflects the difference between a coherent Chinese industrial strategy and a fragmented American approach. The United States must create structures that allow private capital to participate in shipyard and terminal development at scale, treating them as long‑horizon infrastructure assets rather than speculative bets tied to a single federal program’s budget cycle. Recent moves such as South Korean conglomerate Hanwha’s acquisition of the Philly Shipyard show that there is appetite for international co-investment; the lesson is to use allied capital to scale American facilities while maintaining U.S. strategic control over critical national security nodes. By “friend-shoring” the maritime industrial base with allies like Japan and South Korea, the United States can adopt their world-class mass-production techniques while anchoring key assets inside a trusted coalition.
From Vision to Action
Success in 10–15 years means starting today. Success means a commercial fleet capable of handling a larger share of U.S. trade, modern shipyards with maintenance cycles cut in half, and ports that are energy-resilient and hardened against both environmental and man-made threats. In that future, container and LNG traffic moves on more U.S.-flag hulls, dry docks no longer suffer multiyear backlogs, and key ports can operate through cyberattacks or blackouts.
Reaching that outcome requires three things Washington has long avoided in maritime policy: a coherent national maritime strategy, stable multi‑year funding, and clear, predictable demand signals to industry that attract private capital into the sector. Actionable steps include crafting and implementing that strategy, securing stable funding through congressional acts like the SHIPS Act, and sending durable demand signals for U.S.-built and U.S.-flag ships. In alignment with the Council on Global Competition and Innovation – CGCI mission, policies should be deliberately designed to pull in private capital, not crowd it out, so that America’s maritime industrial base once again becomes a source of enduring sea power rather than a hidden vulnerability.
