History [brief] of American Ship Building.
May 31 | Posted by mrossol | InterestingAn interesting, if very short, post on the history of American Ship-building. What lies ahead if we are to get back.
On X:
Fascinating explanation of how the US destroyed its shipping and shipbuilding capacity, and handed it foreign competitors—with disastrous national security consequences. It is an important story given the same can be told of a huge range of industries in the West over the last 45 years.
TL;DR summary: Before WWI the United States had a small shipping industry and relatively little shipbuilding capacity. It had been squeezed out by European shipping cartels and their discriminatory practices. The US also neglected shipbuilding even as European nations were subsidising it. But when WWI broke out, European countries redirected their shipping capacity to the war effort, leaving the US snookered: it did not even have the capacity to build its own replacements. “The domestic economy went into recession as goods piled up on the docks and imports stopped arriving.” The US government made significant investments to remedy the shipbuilding situation. The results of this were spectacular. By WWII (during which it built 5,500 ships), a whole Liberty class cargo ship could be built in as little as four days in US shipyards.
After the war, the US Congress also set about imposing firm but rational regulation on shipping, enforcing fair competition (by methods such as preventing underhand price discrimination) while ensuring US carriers were simultaneously protected and operating in the public interest. During the 1980s, all this was torn up as free market ideology swept the US Capitol.
What happened? Ruinous competition led to the re-formation of cartels. Cheaper foreign companies bought up US shippers who had to pay their American mariners a living wage. Meanwhile, the laissez-faire attitude to shipbuilding came just as Asian nations were starting to subsidise it. The result: the US has now returned to where it was pre-1914: reliant on foreign shipping companies for its trade; lacking surge shipbuilding capacity in case of emergency.
This is important. Why? Obviously it means all US trade exists at the pleasure of foreign owned shippers. 90% of the US’s containerised shipping trade is controlled by three foreign cartels. To give a taster of what this means, during the pandemic, these cartels increased their fees by as much as 1,000%, making $190 billion in windfall profits. They also left American agricultural produce to rot on the docks in preference for more profitable Chinese goods. Worse, the US now has hardly any shipbuilding capacity. Only 0.13% of oceangoing ships are made in the US, compared with 60% made in China. 80% of ship-to-shore cranes are made by a single operation in China. This means the US military has a critical shortage of support vessels and the qualified crew needed to man them.
In the event of a war in the Pacific, the US would need more than 100 fuel tankers; it has access to just 15. The USN recently laid up 17 support vessels due to a lack of crew. Again, this need not have happened, but it did—and in many similarly industries across the West. Serious questions must be asked of those who allowed it to. Now the long and onerous task of rebuilding national capacity must restart across the West.
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