The push to rebuild America’s presence in international shipping is running into a fundamental economic question: where is the cargo demand needed to support a larger U.S.-flag fleet?
That concern surfaced repeatedly on Wednesday during a policy forum on U.S. shipping and shipbuilding hosted by the Hudson Institute in Washington, where lawmakers and maritime industry executives discussed the prospects for revitalising the country’s commercial maritime sector.
For Larry Ryder, senior vice president of business development at Hanwha Defense USA, Inc., an affiliate of Hanwha Philly Shipyard in Philadelphia, the United States already has industrial capacity that could accommodate additional demand.
“There’s a lot of footprint right now that we’re not taking advantage of,” Ryder said.
But expanding that capacity into a sustainable commercial shipping operation will depend on a stronger market signal.
“The demand signal needs to be stronger to get to a point where we can build the ships, because there is capacity out there to absorb in the near term an uptick in demand, and then longer term if the business plan is there,” Ryder explained. “But I don’t think our capacity to build ships is the chokepoint right now.”
Ben Cipperly, chief strategy officer at Havoc AI, which develops autonomous software for ship fleets, offered a similar perspective. He said his company has largely concentrated on the defence market because commercial demand for its technology has yet to develop sufficiently.
“Largely we’ve been a defense-focused company because there just hasn’t been a commercial demand signal for [our technology] yet,” Cipperly said during the forum.
The issue is particularly relevant as policymakers look to combine new shipbuilding activity with emerging maritime technologies. Cipperly pointed to the shortage of mariners and the potential opportunity to combine Havoc AI’s autonomous capabilities with the expected expansion of U.S. shipbuilding under the proposed Ships Act.
“We know we have a mariner shortfall, so we’re looking at where is the opportunity going to be partner Havoc’s autonomy with this burgeoning shipbuilding bow wave, essentially, that’s going to come with the Ships Act.”
Cipperly was referring to the SHIPS for America Act, legislation originally introduced in late 2024 and reintroduced in 2025. The measure is designed to restart U.S. maritime policy, improve the commercial competitiveness of U.S.-flagged vessels in international trade and expand the country’s shipyard industrial base.
Parts of the legislation have since been attached as amendments to the 2027 National Defense Authorization Act (NDAA) in an effort to improve their prospects in Congress. The NDAA is considered “must pass” legislation because it authorises funding for the U.S. military.
At Wednesday’s event, Senators Mark Kelly, D-Ariz., and Todd Young, R-Ind., who sponsor the Senate version of the SHIPS Act, made the case for the legislation.
Kelly framed the issue as both an economic and national security concern, arguing that the United States lacks the robust shipping and shipbuilding capacity required to move goods across the oceans.
“To me, it’s a national security problem and an economic security problem – not having a robust shipbuilding and shipping capacity to get stuff across the ocean, and it’s getting worse every single year,” Kelly said.
He also warned that the consequences could become particularly serious during a major conflict.
“If we don’t get this across the finish line, and we wind up in a major conflict with a near-peer adversary, and you get beyond the first weeks of a conflict and things aren’t going well, we’re going to be wishing that we solved this problem decades ago.”
Outlook for passage
The legislation still faces negotiations as the House and Senate work toward a compromise version of the NDAA.
The House version does not include some of the SHIPS Act’s provisions, including a Strategic Commercial Fleet Program aimed at building 250 U.S.-flag ocean-going ships. Another omitted provision would increase the share of U.S. government cargo required to move aboard U.S.-flagged vessels from 50% to 100%.
Kelly and Young nevertheless remain confident that the provisions could still be incorporated into the final legislation.
“Everything is still on table,” they said as lawmakers continue negotiations between the two chambers.
Young also pointed to growing engagement from the administration and stakeholders surrounding the legislation.
“We’ve been working with the majority of cabinet members on this, we’ve received thousands of comments for technical assistance, so the administration has bought in, and it’s exciting,” Young said.
Yet behind the political momentum, the commercial challenge remains.
Even Kelly acknowledged that legislation alone cannot create a sustainable shipping market. The industry ultimately needs cargo to fill the vessels that policymakers want to build.
“Everything will follow the cargo in this industry,” Kelly said. “You need stuff to put on the ships.”
