Strengthening America’s Maritime Future Through Strategic Acquisitions in Shipbuilding and Logistics

The Current Challenges in Maritime Infrastructure        

The United States faces a pressing maritime challenge, as both the Navy and Coast Guard operate in a landscape of dwindling shipyard capacity and aging fleets. Over the past three decades, the U.S. has ceded significant ground in shipbuilding and logistics to nations like China, whose government-backed initiatives have created a dominant maritime force. Currently, the U.S. has fewer than 200 active merchant ships—a steep decline from over 600 during the Cold War—and produces fewer than 20 large commercial vessels annually. This stagnation impacts not only defense readiness but also the nation’s ability to sustain international trade and economic growth(Source: Regaining U.S. Maritime Power Requires a Revolution in Shipping).

Diminished Fleet Capacity and Aging Infrastructure

The U.S. merchant fleet has dwindled to fewer than 200 active ships, a stark contrast to the 636 vessels at the end of the Cold War. This reduction has left the nation struggling to sustain even basic wartime logistical operations, let alone a robust peacetime economy. Furthermore, the average age of the U.S. Ready Reserve Fleet exceeds 45 years—more than double the industry standard for end-of-life vessels. This reliance on outdated ships places a heavy burden on maintenance budgets and reduces overall reliability during critical missions.

Decline in Shipbuilding and Repair Capacity

Domestic shipyards, critical to both naval and commercial maritime operations, are operating at diminished capacity. Fewer than 20 large commercial vessels are constructed annually, with most production limited to government contracts rather than competitive international markets. The lack of investment in modern shipbuilding technologies, such as modular construction and automated welding, has left U.S. shipyards 60% less efficient than their international counterparts, especially those in China and South Korea.

Strategic Dependence on Foreign Nations

The U.S. has become increasingly dependent on foreign shipping and shipbuilding industries, with China leading the charge. Chinese shipyards, bolstered by $132 billion in subsidies between 2010 and 2018, now dominate global markets. This dependency is problematic, as it compromises economic security and exposes the U.S. supply chain to geopolitical vulnerabilities. For example, Chinese companies like COSCO integrate civilian shipping with military capabilities, creating risks for global trade and U.S. maritime operations.

Regulatory and Policy Barriers

Domestic regulations, such as the Jones Act, impose significant costs on U.S.-flagged vessels by requiring them to be built, owned, and operated by Americans. While the act aims to protect domestic shipping, it inadvertently discourages investment in modern shipbuilding and maintenance, leading to higher costs and reduced competitiveness. Additionally, policies like the Foreign Dredge Act and the National Environmental Policy Act (NEPA) slow down necessary maritime infrastructure projects, further hampering U.S. efforts to modernize its capabilities.

Insufficient Skilled Workforce

The maritime industry faces a critical shortage of skilled labor, including shipbuilders, engineers, and merchant mariners. The average age of the U.S. maritime workforce is nearing retirement, with too few young professionals entering the field. This lack of talent undermines the capacity to maintain existing infrastructure and limits the ability to innovate.

Limited Port and Logistics Resilience

The U.S. port infrastructure has struggled to adapt to modern logistical demands. Bottlenecks at major ports, as seen during the COVID-19 pandemic, highlighted vulnerabilities in supply chains. Ports lack sufficient handling equipment for larger vessels, and the absence of diversified logistics hubs increases the risk of disruptions during emergencies or conflicts.

Strategic Military Implications

For the U.S. Navy and Coast Guard, a weakened maritime sector translates directly into reduced readiness. The Navy’s fleet has struggled to expand beyond 300 warships, while China is on track to surpass 400 warships by 2025. The shared reliance on skilled labor and infrastructure between commercial and naval shipbuilding exacerbates these challenges, creating a bottleneck in critical defense capabilities

Path Forward: Meeting Future Maritime Demands        

To address these deficiencies, the U.S. must embrace a revitalized maritime strategy that integrates innovation and investment. This strategy includes expanding shipyard capabilities, developing resilient logistics hubs, and acquiring maritime services companies that support both military and commercial needs. By focusing on future demand, such as unmanned systems, additive manufacturing, and distributed production, the U.S. can bridge the gap between its naval objectives and economic security.

The path forward involves modernizing shipbuilding and repair capabilities, enhancing the nation’s logistical infrastructure, and fostering innovation across both commercial and defense maritime operations. These efforts must align with the growing demands of global trade, national security, and the need for resilience in a dynamic geopolitical landscape. Below are the key components of a sustainable maritime strategy:

Modernizing Shipyards and Infrastructure

The U.S. must prioritize investment in shipyard modernization to enhance efficiency and competitiveness. This includes adopting advanced manufacturing technologies and expanding facilities to handle a broader range of vessels and systems.

• Digital and Modular Shipbuilding: Embracing integrated digital shipbuilding tools and modular construction methods can reduce production timelines and costs. Automation in welding, assembly, and quality control will also increase productivity by up to 60%, closing the gap with international shipyards.
• Facility Expansion: Shipyards need upgrades to accommodate next-generation vessels, including unmanned underwater and surface vehicles (UUVs and USVs). Expanded capabilities should focus on small combatants and support vessels critical to distributed maritime operations.
• Resilient Infrastructure: Investments in flood-proof drydocks and climate-controlled facilities will support operations in increasingly unpredictable environmental conditions.

Supporting Distributed Maritime Operations

The future Navy and Coast Guard strategies revolve around distributed operations, requiring smaller, more agile vessels and systems. Shipyards and maritime service providers must adapt to support this shift.

• Unmanned Systems Support: As unmanned systems take a larger role in naval operations, facilities must specialize in maintaining and upgrading UUVs and USVs. This includes integrating advanced propulsion systems, AI-driven navigation, and sensors.
• Small Combatant Maintenance: Offering cost-effective, rapid repair services for smaller vessels ensures operational readiness and aligns with the Navy's distributed fleet strategy.

Interoperability & Autonomy via Mesh Networks

A key enabler for distributed maritime operations is the integration of interoperability and autonomy through advanced mesh networks. These technologies are essential for connecting a dispersed fleet of manned and unmanned vessels, ensuring seamless communication, data sharing, and operational coordination in real-time.

Enhanced Situational Awareness - Mesh networks create a decentralized communication system that allows vessels, both manned and unmanned, to share data without relying on a central hub. This capability improves situational awareness across the fleet by enabling:

• Real-time data exchange: Sharing of navigation, weather, and operational data.
• Cross-domain integration and next-gen solutions: Ability to Coordinate across sea, air, and land systems for a unified operational picture, means cross domain solution (CDS) a system that allows users to securely access and exchange data across networks with different security levels.

Autonomous Operations - Autonomous vessels rely heavily on mesh networks to maintain connectivity and execute missions effectively. Features include:

• Self-healing communication: Vessels can continue operations even if one node in the network fails.
• Collaborative autonomy: Groups of unmanned systems (UUVs and USVs) can work together to execute tasks such as reconnaissance, mine detection, and logistics support.

Interoperability with Coalition Partners - Mesh networks enhance interoperability with allies by creating standardized communication frameworks that integrate seamlessly across different platforms. This capability is critical for coalition operations and ensuring the effectiveness of distributed fleets in joint missions.

Resilience in Contested Environments - Unlike traditional centralized communication systems, mesh networks are designed to operate in contested or degraded environments. They are resistant to jamming and cyberattacks, providing:

• Secure and redundant communication: Ensuring operational continuity in electronic warfare scenarios.
• Dynamic reconfiguration: Automatically adjusting the network to maintain coverage during disruptions.

Expanding Logistics Hubs for Global Reach

To secure supply chains and support international commerce, the U.S. must develop logistics hubs along its eastern and western shores.

• Strategic Locations: Establishing or acquiring logistics hubs near major and secondary ports to ensures faster access to key shipping lanes and support national defense logistics.
• Cold Chain and Multi-Modal Connectivity: Enhancing cold storage facilities and integrating air, rail, and road logistics capabilities will improve resilience and adaptability in emergencies.

4. Fostering Public-Private Partnerships

Collaboration between government agencies, private industry, and defense contractors is crucial to achieving national maritime goals. Public-private partnerships (PPPs) can bridge funding gaps and provide the necessary resources for large-scale projects.

• Leveraging Government Contracts: Strategic alignment with U.S. Navy, Coast Guard, and Maritime Administration (MARAD) priorities will create a steady pipeline of work for shipyards and logistics hubs.
• Defense Innovation Initiatives: Partnerships with organizations can drive technological advancements in areas like additive manufacturing, advanced or strategic materials, along with OUSD critical technologies.

Developing a Skilled Maritime Workforce

Addressing the workforce shortage is drastically needed to sustain and grow the U.S. maritime sector.

• Training Programs: Federal and state grants should support vocational training programs for shipbuilders, welders, and logistics professionals, creating a pipeline of skilled workers.
• STEM Education: Expanding STEM-focused curricula in schools and colleges will encourage young professionals to pursue careers in maritime engineering, logistics, and innovation.
• Transition Programs for Veterans: Leveraging military-to-civilian transition programs can bring experienced personnel into the industry, particularly in shipyard and logistics roles.

An example of what is being developed is the MARAD Mariner Workforce Strategic Plan.

Prioritizing Environmental Sustainability

Sustainability must be a cornerstone of future maritime development to align with environmental regulations and customer demands.

• Green Shipbuilding: Incorporating sustainable materials, energy-efficient designs, and cleaner propulsion systems in ship construction will position U.S. shipyards as leaders in green maritime technologies.
• Pollution Mitigation: Enhancing compliance with Environmental Protection Agency (EPA) standards and investing in pollution control technologies will safeguard waterways while meeting customer and regulatory expectations.

An example is what Georgia Tech researchers are developing sustainable ocean shipping solutions to meet global emissions targets through eco-friendly fuels, optimized supply chains, and life-cycle assessments. (Source: Researchers Help Maritime Industry Navigate Toward Sustainability)

Capitalizing on Innovation in International Commerce

The U.S. must position itself to compete in and lead the evolving landscape of global trade.

• Enhanced Port Capacity: Modernizing ports to handle mega-ships and digitizing supply chain processes will attract more international shipping traffic.
• Trade Route Diversification: Expanding connections to emerging markets in South America, Africa, and Southeast Asia will reduce dependency on Chinese-controlled routes.
• Southern Border Security: The implementation of tariffs in recent years has shifted the dynamics of U.S.-Mexico trade, driving a significant increase in imports entering the United States through southern border ports of entry. This growth underscores the importance of robust southern border infrastructure to accommodate the rising volume of goods, ranging from industrial components to consumer products.

Opportunities in Logistics and Security

The surge in trade has highlighted both opportunities and challenges for southern border security. Ports along the U.S.-Mexico border require advanced infrastructure to handle increased throughput efficiently while maintaining stringent security protocols. Investments in state-of-the-art inspection technology, enhanced cold chain logistics, and multi-modal transportation hubs can improve the flow of goods while ensuring compliance with safety and customs regulations.

Strategic Importance for National Supply Chains

By bolstering southern border logistics capabilities, the U.S. can strengthen its supply chain resilience and reduce dependency on trans-Pacific trade routes. This shift also provides a strategic advantage in diversifying import sources and fostering regional trade partnerships under frameworks like the USMCA.

Integration with Maritime Infrastructure

Southern border trade complements the maritime industry, creating synergies between ports of entry and logistics hubs on the Gulf and Pacific coasts. Strengthening these connections can accelerate the movement of goods from land to sea, optimizing trade efficiency and boosting economic growth.

Strategic Acquisitions and Industry Consolidation

To meet future maritime demands, the U.S. must consolidate resources and expertise through strategic acquisitions.

• Targeted M&A: Acquiring shipyards, maritime service providers, and logistics hubs with existing capacity and potential for growth will create a cohesive network capable of addressing future needs.
• Portfolio Alignment: Identifying businesses with complementary capabilities ensures seamless integration and alignment with national priorities.

Our Strategic Approach to Maritime Acquisitions        

Through my role at Phoenix Group, and with strategic partners we are actively pursuing acquisitions that align with the broader mission of bolstering U.S. maritime capabilities. Our target profile includes:

1. Shipyards: Facilities that can modernize and maintain naval and commercial fleets, with a focus on unmanned systems and small combatants to support distributed maritime operations.
2. Maritime Services: Companies offering expertise in repair, logistics, and fleet management, essential for maintaining readiness across the Navy, Coast Guard, and commercial sectors.
3. Logistics Hubs: Strategic properties on the Eastern and Western shores that enhance supply chain resilience and expand access to global trade.

These acquisitions are evaluated based on their ability to support long-term growth, integrate seamlessly with our existing portfolio, and contribute to national security objectives.

Call to Action: Partnering for Maritime Excellence        

We are actively seeking partners who share our vision for revitalizing America’s maritime strength. Whether through mergers and acquisitions or strategic teaming agreements with government agencies and defense contractors, we believe collaboration is key to achieving these goals. If you are interested in exploring opportunities with us, we invite you to connect.

The maritime industry is critical to national security and the USA's economic prosperity. By pursuing strategic acquisitions and fostering partnerships, we aim to play a pivotal role in revitalizing this sector. As a nation, we have the talent, innovation, and drive to reclaim our position as a global maritime leader—this is the vision we are committed to achieving.