Energy Musings - March 30, 2026

A new report for MARAD on the challenges of ensuring that the U.S. has sufficient ships and shipbuilding capacity to meet national security requirements is enlightening. We are no where close.

MARAD Study Documents Maritime Industry’s Shortfalls

A congressionally mandated study for the Maritime Administration (MARAD) of the Department of Transportation (DOT), completed late last year, was recently cleared for release by the DOT after undergoing interagency reviews. The CNA Corporation, which prepared the MARAD study, describes itself as a “not-for-profit analytical organization dedicated to the safety and security of the nation.”

The 96-page report, Independent Study in Support of a National Maritime Strategy: Summary Report, was described thusly in its Abstract:

“This congressionally mandated study for the Maritime Administration in the Department of Transportation is meant to inform development of a national maritime strategy—its ends, ways, means, strategic problems, and priorities. The focus is on the national security role of merchant mariners, commercial shipping, and commercial shipbuilding. The study identifies potential strategic aims, problems that stand in the way of achieving these aims, and relevant courses of action. It also estimates future defense and economic security needs for U.S. flag shipping, mariners, and domestic shipbuilding.”

We learned from the report that it was based on a series of “task-driven interim reports delivered to MARAD during fiscal year 2024.” It also relied on lessons from two wargames conducted at CAN in late July 2024, focusing on shipping and shipbuilding. More than 100 participants from government and private industry participated.

As the report notes, the CNA research team created analytically derived estimates, ideas, and options for developing various maritime strategies. However, the estimates are sensitive to the assumptions underlying the analytical models employed.

The study developed four alternatives to address the primary role of maritime strategy: ensuring the United States has reliable access to sufficient shipping and shipbuilding capacity to meet its national security needs. This requires addressing national and economic security issues and shortfalls. Economic security means that our energy imports and exports can be sustained. The four alternatives begin with the least demanding and rise to the most ambitious. The alternatives are:

· Meet the U.S. military’s sealift needs in a confrontation.

· Ensure access to enough shipping capacity to secure critical imports for the defense industrial base during a confrontation.

· Meet the above requirements and additionally, maintain continuity of U.S. seaborne exports.

· Being able to compete with China in global shipping and shipbuilding actively.

Three things become clear as one contemplates the magnitude of the additional capacities needed at each progressively higher level. First, the magnitude of ships, mariners, and shipbuilding capacity grows significantly from a low level to a high, aspirational target. Second, the cost to create each level of capacity will increase dramatically. Finally, the time required to develop capacity grows materially, and the duration depends on the degree of U.S. government and economic mobilization involved.

To put the alternatives into perspective, the first can be achieved by adding more ships to the U.S. flag fleet, which would result in millions of dollars in annual subsidies. That is because these additional ships would participate in the assured access programs that earn the ships’ annual retainer fees for their availability. The vessels could come from the existing hundreds of ships owned by U.S. companies but flagged under other jurisdictions. They could also come from laid-up tonnage. However, to ensure a U.S.-flag fleet large enough to secure critical defense imports would require more than twice as many U.S.-flag ships as the first alternative.

The magnitude of the challenge of competing with China in shipping and shipbuilding can only be appreciated by comparing the respective numbers. China has more than 5,500 ships sailing under the PRC flag. China’s shipyards build more than 1,700 oceangoing vessels per year. Those capacities compare with fewer than 200 active U.S.-flag ships and shipyards that deliver 3-5 oceangoing commercial ships per year. This is no small gap, and one that will take billions of dollars in investment and years to close, if ever. Without a reordering of the economy and dedicating substantial resources to the effort, this alternative is unrealistic.

U.S. assured access to a shipping fleet.

Currently, CNA says the U.S. has about 298 ships as of January 2024, with a total of 63 in the government’s ready reserve (48) and prepositioned fleets (15). The study includes 50 small tankers, projected to come from the 103 Platform Supply Vessels (PSVs) that are laid up, according to a FY2020 report for the United States Transportation Command. Absent these three categories of ships, the fleet is left with 185 privately owned ships actively sailing under the U.S. flag, of which 110 can be quickly requisitioned under emergency access agreements. While CNA focuses on Jones Act-eligible vessels and whether they are subject to or not subject to access agreements, that group totals 92, leaving an almost equal number of non-Jones Act-eligible ships in the U.S. fleet.

The defense sealift requirements call for assured access to an additional 68 large tankers and 50 small tankers. These tankers would support military fuel needs during a confrontation in the Pacific Ocean. Besides the additional tankers, the military would also need an additional 6,400 mariners to man them for the duration of the confrontation and to staff the Ready Reserve Force ships.

The second alternative involves economic security, which means having the ability to sustain essential U.S. seaborne trade during a conflict or other national emergency that disrupts global shipping. It is based on the assumption that the U.S. would lose reliable access to virtually all non-U.S.-flag shipping it currently relies on for essential trade. Secondarily, it is assumed that the disruption lasts long enough to put U.S. defense production and the U.S. economy at significant risk.

Additional shipping is needed to maintain critical defense imports in conflict.

To ensure critical defense industry imports, the U.S. would need 400 to 1,300 cargo ships above the current U.S. merchant fleet. When we add the need to maintain seaborne exports, it is estimated that the U.S. would need about 1,200 to 2,400 ships in addition to the current U.S.-flag fleet. These additional vessels would be in addition to those supporting the sealift and defense industrial base.

Additional shipping is needed to maintain seaborne exports.

Recognizing that the estimates of additional ships needed are significant, CNA presented more feasible forecasts. To ensure 50% of U.S. defense imports are carried by U.S.-flag ships would require 215 additional ships and 8,000 more mariners. Likewise, to ensure 50% of U.S. exports, 605 ships and 23,000 more mariners would be needed. These estimates would be cumulative if both objectives are to be achieved. In other words, 820 additional ships and 31,000 additional mariners.

CAN also examined the U.S. shipbuilding industry to determine its current status and what it will need to meet future domestic maritime industry needs. CNA established a set of assumptions to forecast the shipbuilding capacity needs. They stated that many merchant ships will be sunk during the confrontation and will have to be replaced, thereby increasing the total shipbuilding capacity required.

It was also assumed that key foreign shipyards would cease production or be inaccessible to the U.S. Furthermore, non-U.S.-flag ships would not be available for purchase, charter, or requisition. Finally, it is assumed the disruption will last for several years or more.

Based on these assumptions, the U.S. would need to double or even quadruple peacetime ship production. Currently, U.S. shipyards build three to five commercial ships a year, but that would need to double or triple output after two years. That is the estimated time needed to expand commercial shipyards, workforces, and supply chains. The problem is that it may not be until the third or fourth year of the conflict that expanded shipyard capacity would match attrition of the commercial fleet. (The U.S. lost about 73 merchant ships a year during World War II.)

CNA opined that the smaller the shipbuilding industry is in peacetime, the more the government must rely on non-U.S. sources for additional ships in wartime. We can’t build our way out of the existing small U.S.-flag fleet. Therefore, CNA examined options for expanding the U.S.-flag fleet by tapping ships active in the global fleet. They concluded that there are almost 14,000 ships that are U.S.-owned but foreign-flagged, North Atlantic Treaty Organization (NATO) or Pacific ally-flagged, and European Union or Pacific ally-owned but foreign-flagged. CNA says that roughly 600 of these are U.S.-owned ships registered under the four largest open-flag registries.

Non-U.S.-flag sources of shipping capacity.

While a large universe of operating ships exists that the U.S. could tap, each alternative presents challenges. The challenges are that shipowners may not agree to cooperate, gaining access to the ships and mariners may take time, and shipowners and their crews may refuse to take the risks required by the military. So, while there are many ships the U.S. government could corral to address our small fleet and large military and commercial shipping needs, virtually every option carries the risk of falling short of ensuring the U.S. has the shipping and shipbuilding capacities it needs.

The CNA report concluded with a long list of recommendations, many of which have been floated in other forecasts, commentary by maritime experts, and even in some of our writings. Many of these recommendations are reflected in the four pillars of the Trump administration’s Maritime Action Plan and in the various maritime bills currently before Congress.

The CNA researchers offered several interesting observations about maritime industry trends and issues that work against easy solutions. The CNA researchers wrote:

“The commercial maritime domain as a whole is not as well understood as the air, ground, and cyber operational domains. It is also not well integrated into national security policy or defense planning. Policy-makers and the public would benefit from [a] better understanding [of[ the importance of this sector to national security.”

They further noted:

“Little research has been done on U.S. vulnerabilities to economic coercion or disruption. Relatively little is known about maritime supply chains that underpin U.S. trade and the industrial base. The U.S. Government does not maintain detailed information on these matters, and there is little usable analysis that might shed light on the nature or extent of the threat. Neither MARAD, which is in the DOT, nor the Department of Commerce track maritime supply chains and shipbuilding to the extent that is probably required to understand the threat.”

That observation, which we agree with, is significant. To solve problems, one needs to understand the issue, which requires up-to-date data, but this is not the case in the maritime industry. For example, MARAD does not know how many mariners are currently available to crew ships. Mariner licenses must be current, and they must have been at sea within a recent period to be considered active. So, when the CNA study provides estimates of the additional mariners required for the additional ships required to meet the maritime needs of the U.S. military and the economy, it is impossible to quantify the significance of the population increase required.

Most of the thinking about our maritime strategy is driven by the needs of the U.S. Navy and Coast Guard and by national defense. However, a lack of understanding of trends in the commercial shipping sector complicates the development of a unified maritime strategy. For example, while commercial shipping has trended toward larger ships with smaller crews, the military is moving toward smaller ships that can evade missiles. The larger commercial ships target deepwater ports for their cargoes, while the military needs ships that can operate in smaller ports. Commercial ships are beginning to shift to alternative fuels, while the military remains committed to oil or nuclear power.

The United States, pursuant to 46 U.S.C. § 50101, is required to have a merchant marine that is “sufficient to carry the waterborne domestic commerce and a substantial part of the waterborne export and import foreign commerce of the United States and to provide shipping service essential for maintaining the flow of the waterborne domestic and foreign commerce at all times.” This requirement dictates our maritime policy and underlies the CNA report.

Revitalizing the U.S. maritime industry will require advocates in the White House and Congress. Without them, this effort will meander when it should be a high priority. The lack of understanding of the importance of all maritime activities for our national and economic security is the greatest impediment to progress.