Yet less than 1% of the global fleet is U.S.-flagged. Instead, the vast majority is handled by European or Asian operators, predominantly using Asian-built ships. 

This is largely due to limited shipbuilding capacity. While the U.S. dominated global shipbuilding during the two world wars, production declined after the Second World War ended, and it quickly lost market share to Asian peers. Today, the U.S. has 190 flagged merchant vessels, many of which were built abroad; in contrast, China has more than 7,000. 

This is because large commercial vessels can serve dual roles during national emergencies, supporting military operations and delivering essential aid. “Currently, with a commercial fleet of fewer than 200 vessels over 1,000 tons, down from nearly 3,000 in the 1960s, the U.S. risks being unable to guarantee the flow of essential goods or respond effectively to a military crisis,” noted Alexander Wise, who is part of the Long-Term Strategy team at J.P. Morgan. 

Then there are the economic benefits to consider. Increased commercial shipbuilding could reduce trade costs for the U.S. and improve supply chain efficiency, in turn boosting economic activity. It could also promote innovation and R&D on a wider scale, with positive spillovers for the rest of the economy. 

This is especially as building ships is a complex process requiring strong organizational expertise, significant capital infrastructure and diverse supplier networks.

• Steel: Accounting for 75–85% of a ship’s weight, steel is the primary input for shipbuilding. U.S. steel production has declined after peaking in 1973, though output has remained fairly steady since the 1980s. “Should capacity constraints arise, the U.S. can collaborate with strategic partners such as Japan, Korea, Canada, Mexico and Europe to meet steel demand without significant strategic risk,” Wise said.
• Engines: According to Clarksons Research, Germany-based Everllence and its affiliates hold about 70–80% of the engine design market for large containerships, tankers and bulkers, which predominantly use diesel two-stroke engines. “The U.S. shipbuilding industry currently lacks the ability to produce large diesel two-stroke engines at scale,” added Steven Palacio, an economist at J.P. Morgan. “With strategic investment, U.S. manufacturers could potentially expand into this sector, but such capacity would take time to develop. For now, the U.S. has to rely on strategic partners, mainly in Korea and Japan, for licensed production of Everllence engines.”

• Adopting automation and modularity: U.S. shipyards are less productive than their international counterparts, partly due to the persistence of legacy shipbuilding methods. In contrast, global leaders have embraced modularity, fabricating and outfitting large vessel sections independently before final assembly. This approach enables parallel production streams, reduces dock congestion and significantly cuts build time and labor hours.
• Advancing autonomous shipping technologies: These involve relying on advanced sensors, software and control systems to operate vessels with minimal or even no crew. By reducing operational expenditures, they could help offset higher upfront procurement costs, making domestic ship construction more economically viable.