America’s Naval Decline: Losing Control of the Seas
- The United States' dependence on ocean shipping for trade and military logistics contrasts sharply with it's limited maritime capacity.
- Only a fraction of the world's large vessels are built in the U.S., while China dominates global shipbuilding.
- beyond shipbuilding, China also controls significant portions of the supply chain, manufacturing moast of the cranes, truck chassis, and containers used in U.S.
America’s maritime dominance is slipping. This article reveals how the U.S. is losing control of the seas, with China’s shipbuilding prowess eclipsing America’s capabilities. The U.S. relies heavily on ocean shipping for both trade and military support, yet supply chain vulnerabilities are exposed by reliance on foreign entities and shipping cartels controlling a large portion of US containerized shipping. The decline in U.S. shipbuilding has national security implications and a shortage of American mariners threatens Navy support operations. Re-regulation, strategic investment in American shipbuilding, and mariner training are vital to revitalizing the industry. News Directory 3 highlights the history and potential solutions to restore America’s maritime power.Discover what’s next for the U.S. maritime sector.
America’s Maritime Industry Faces Decline Amid China’s Shipping Dominance
Updated May 28, 2025
The United States’ dependence on ocean shipping for trade and military logistics contrasts sharply with it’s limited maritime capacity. While about 80% of U.S. international trade by weight is transported by sea, the nation’s shipbuilding capabilities have considerably diminished.
Only a fraction of the world’s large vessels are built in the U.S., while China dominates global shipbuilding. This dependence on foreign-built ships, owned and crewed by overseas carriers, raises concerns about national security and economic stability. By late 2024, a few major cartels controlled approximately 90% of the U.S. containerized shipping trade.
beyond shipbuilding, China also controls significant portions of the supply chain, manufacturing moast of the cranes, truck chassis, and containers used in U.S. ports.
The COVID-19 pandemic highlighted the vulnerabilities of America’s reliance on foreign entities. Shipping cartels drastically increased spot contract costs, reaping considerable profits while rejecting U.S. agricultural exports. This situation exposed the fragility of the U.S.supply chain and its susceptibility to external pressures.
The decline in U.S. shipbuilding and shipping capacity also has national security implications.A shortage of American mariners threatens the Navy’s ability to crew support vessels. The Navy sidelined 17 support vessels in November 2024 due to crew shortages.The U.S. faces a critical shortage of support ships, especially fuel tankers, needed for potential conflicts.
The current state contrasts sharply with the mid-20th century, when the U.S. had a thriving, well-regulated ocean-shipping industry. The shift away from that system has led to the present challenges.
historically, “ruinous competition” plagued the ocean-shipping industry, leading to unstable rate wars. Carriers formed unregulated cartels to stabilize prices,but this came at the expense of fair practices. These cartels offered preferential treatment to large shippers, disadvantaging smaller businesses and farmers.
Simultaneously, the U.S. government neglected maritime policy, refusing to subsidize shipbuilding while foreign governments supported thier industries. By 1901, U.S.-built vessels carried a small percentage of national trade.
The consequences of cartelization and government inaction became evident during world War I. Reliance on European shipping led to soaring freight rates, effectively isolating the U.S. from global trade. The domestic economy suffered as goods piled up and imports stalled.
In response, congress invested heavily in U.S. shipping and shipbuilding, leading to the construction of thousands of vessels during both World Wars.The U.S. became a leading shipbuilder, setting records for speed and scale.
Congress also established the United States Shipping Board to regulate the industry, prevent destructive competition, and ensure fair practices. This regulatory framework aimed to prevent price discrimination and other tactics that stifled competition.
However,during the 1980s,deregulation efforts weakened the FMC’s ability to oversee ocean-carrier cartels. This led to a resurgence of destructive competition and exploitation. Mergers increased as carriers sought to manage costs, further consolidating the industry.
American-flag carriers, facing higher costs, were particularly vulnerable. Foreign corporations acquired major U.S. carriers, leaving the United States without globally competitive ocean carriers. Asian shipyards benefited from substantial government subsidies.
The consequences mirrored those of the early 1900s. Shipbuilding declined in the U.S., and the nation now lacks the capacity to quickly build naval or sealift ships. China builds the commercial ships contracted by the U.S. government for military support.
Proposed solutions include tariffs on Chinese-owned ships and tax incentives for shipyard investment. However, a more thorough approach is needed, focusing on re-establishing a system of regulated competition to ensure fair practices and public benefit.
Restoring government oversight would enable the U.S. to direct cartels to operate in the public interest,ensuring fair prices and terms for all shippers. Combined with public investment in shipping, shipbuilding, and mariner training, this system could revitalize the American maritime industry.
What’s next
Looking ahead,a revitalized U.S. maritime strategy could involve a combination of targeted tariffs, strategic subsidies, and a return to regulated competition. This would aim to foster a more balanced and resilient maritime sector, capable of supporting both economic and national security needs.