Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

Protected US Shipbuilding Continues to Sink

by June 17, 2025
June 17, 2025
Protected US Shipbuilding Continues to Sink

Colin Grabow

Defenders of the protectionist Jones Act often insist that the law’s prohibition on the use of foreign-built vessels in domestic commerce ensures a robust domestic shipbuilding industrial base. But data released by UNCTAD last week demonstrates that such claims rest on a rather loose definition of “robust.” In 2024, the United States — the world’s second-largest manufacturing country with a 17 percent share of world output — accounted for a mere 0.04 percent of global commercial shipbuilding.

Not four percent, or even four-tenths of a percent, but four one-hundredths of a percent. Such output places the United States nineteenth in the world shipbuilding rankings.

This lowly performance wasn’t a one-off. US shipbuilding output over the last five years places the country at seventeenth, while over the last ten years, US shipyards collectively rank twelfth. Since 2014, US shipyards have not exceeded 0.53 percent of global output in a single year. 

There’s no mystery as to why. The mediocre rankings and meager output reflect US shipyards’ extreme lack of competitiveness, with US-built merchant ships estimated to cost four to six times as much as those constructed abroad.

This is the product of numerous factors, not least of which is the stultifying effects of protectionism (an inability to compete is the predictable consequence of being shielded from competition). Retreating to their captive domestic market, US shipyards lack the scale and specialization needed to compete internationally.

High costs, inefficiency, and nearly nonexistent demand for US-built commercial vessels outside of the United States have unsurprisingly followed.

Even domestically, however, there is little appetite for new ships. The expense of Jones Act-compliant water transport — in large part due to the required use of costly US-built vessels — means that ships are almost exclusively relegated to trades where terrestrial transportation modes aren’t available (e.g., the non-contiguous states and territories and “energy islands” that lack pipeline connections to US refinery hubs).

This has led to fewer than 100 oceangoing ships, a tiny fraction of the global population, available to meet the transportation needs of the world’s largest economy. Little shipbuilding is required to keep such a diminutive domestic fleet afloat.

The extended lifetimes of Jones Act-compliant vessels, resulting from their high replacement costs, further erode demand. Although internationally flagged merchant ships typically have service lives of 20–30 years, those operating under the Jones Act are rarely scrapped before age 40 (And even then, there’s no guarantee that a vessel’s replacement is imminent. Jones Act carrier Matson, for example, operates six ships that are either beyond 40 or will reach that age by 2027, yet recently stated that it only plans to build three ships over the next decade.)

This combination of a small fleet and the extended service lives of aging vessels makes for anemic shipbuilding demand.

And there’s no sign of a turnaround. 

Amidst escalating costs, there’s little reason to believe that demand for domestic shipping is set to increase, and the age profile of the Jones Act-compliant fleet shows relatively few ships primed for replacement over the next ten years (at least by Jones Act standards). 

Absent major policy changes, depressed levels of domestic shipbuilding are likely for the foreseeable future.

The Jones Act’s US-build requirement hinges on the notion that the country’s shipbuilding industry would be even weaker in its absence. But given its negligible output, this essentially means believing that commercial shipbuilding in the United States, a manufacturing powerhouse renowned for its competitiveness and innovation, would essentially be nonexistent but for this protectionist law. 

This doomsday scenario, however, is nearly what the Jones Act has achieved. As such, it’s increasingly difficult not to conclude that a United States free of such protectionism would have improved on the law’s sorry record. It would be hard to do much worse.

0
FacebookTwitterGoogle +Pinterest
previous post
Ex-White House officials to testify on who ‘really ran the country’ during Biden era
next post
What Growing Charities Get Wrong About Donor Data

You may also like

Will Economic Growth Be Short-Lived as Fiscal Challenges...

May 23, 2024

House Appropriations Subcommittee Zeroes Out California High‐​Speed Rail

July 17, 2023

The High Cost of War: Ukraine Aid Could...

April 9, 2024

The New Deal and Recovery, Part 21: Happy...

August 31, 2022

The GOP ‘Stimulus Package’ for Campus DEI

December 22, 2023

Tariffs on Imports from China Are Still Too...

May 23, 2025

Trump Redeems Convicted Insurrectionists—Will It End There?

January 21, 2025

Friday Feature: Rooted Life Academy

May 24, 2024

Does Section 230 Cover Generative AI?

December 6, 2023

China Raises Real Concerns; Revoking Permanent Normal Trade...

December 12, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Vodafone CEO challenged by ex-franchisees at AGM over landmark legal dispute

      July 29, 2025
    • Landmark Supreme Court ruling rejects Uber’s attempt to impose VAT on all private hire fares

      July 29, 2025
    • Young consumers reshape payment dispute behaviour, putting pressure on retailers to modernise

      July 29, 2025
    • Why Every Content Creator Needs an AI Detector Today

      July 29, 2025
    • Why Renting a Tesla Is the Right PCO Car Choice

      July 29, 2025
    • Müller acquires Dragon rejected Biotiful Gut Health as it enters functional dairy market

      July 29, 2025

    Categories

    • Business (8,601)
    • Investing (2,154)
    • Politics (16,229)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved