Hearings to examine reviving commercial shipbuilding

Coast Guard and Maritime PolicySenate Commerce, Science, and Transportation Subcommittee on Coast Guard, Maritime, and Fisheries · 2025-10-28 · 119th Congress
The Senate Commerce Subcommittee on Coast Guard, Maritime, and Fisheries held this hearing to examine how to modernize and accelerate U.S. Begins at 0:17:58
Transcript
Highlights

Title

Reviving U.S. commercial shipbuilding and countering China's dominance

Purpose

The Senate Commerce Subcommittee on Coast Guard, Maritime, and Fisheries held this hearing to examine how to modernize and accelerate U.S. commercial shipbuilding, which Chair Sullivan tied directly to Navy shipbuilding capacity and broader economic and national security0:17:58. Members and witnesses discussed the bipartisan Ships for America Act, the Trump administration's forthcoming Maritime Action Plan (due November 5), and specific policy tools — the Jones Act, Title 11 loan guarantees, small shipyard grants, and the Vessel Construction Manager acquisition model — to rebuild an industry that now produces well under 1% of the world's commercial ships. Begins at0:17:58

Who spoke

Chair Dan Sullivan (R-AK)0:17:58: Opened by noting the U.S. builds less than 1% of world commercial ships while China accounts for nearly half0:18:42, cited $25B+ each for Navy and Coast Guard shipbuilding and nearly $9B for icebreakers in the reconciliation bill0:21:48, and repeatedly pressed witnesses on regulatory "red tape" and change orders as key obstacles0:56:521:48:07.

Sen. Lisa Blunt Rochester (D-DE), Ranking Member0:25:22: Thanked Sen. Kelly for his leadership on the Ships for America Act0:25:28, argued the hearing was happening amid a government shutdown that is raising health care costs and cutting SNAP benefits0:26:13, and later asked Dr. Mercogliano about supply-chain vulnerabilities1:04:09.

Sen. Maria Cantwell (D-WA)0:29:52: Cited that the U.S. builds just 0.2% of world commercial shipping versus China's, South Korea's, and Japan's combined 90%+0:30:12, and that in 2022 China had 1,794 commercial ships in production versus 5 for the U.S.0:30:41; said Washington's maritime sector supports 174,000 jobs and $45 billion in economic revenue0:31:52; later asked about icebreaker capacity1:14:12 and extending Title 11 financing to fishing vessels1:14:44.

Mr. Paxton, President, Shipbuilders Council of America0:35:23: Testified the Jones Act sustains shipbuilding at no cost to the federal government0:35:55 and that foreign nonmarket practices and skewed OECD tonnage statistics disadvantage U.S. yards0:36:59; later said seven shipyards responded to an inquiry about bidding on icebreaker contracts1:14:15 and that U.S. yards delivered 964 vessels of all types last year1:36:07.

Mr. Vogel, President of Legal Affairs and Operations, TOTE Services0:39:33: Described TOTE's delivery of the first LNG-powered container ship and pioneering the Vessel Construction Manager acquisition strategy0:41:09; said that approach helped grow Philly Shipyard from 83 to over 2,000 production employees0:56:59 and delivered vessels at 0.38% cost growth versus budget1:25:08.

Dr. Salvatore Mercogliano, Professor, Campbell University0:43:56: Traced U.S. shipbuilding surges under the 1920 Jones Act and 1936 Merchant Marine Act0:45:18; noted the U.S. is the fourth-largest investor in commercial shipping worldwide despite having only the 23rd-largest merchant fleet1:07:41; said China's share of global shipbuilding rose from about 5% in 1999 to over 60% today0:58:57 and less than 2% of U.S. imports/exports move on U.S. ships1:22:20.

Ms. Snow, Talent Acquisition and Engagement Manager, Snow & Company0:49:24: Described her family's Seattle boatbuilding company growing from 50 to over 100 employees by hiring veterans, immigrants, and refugees0:49:48; said a small shipyard grant funding a laser cutter created 15–20 new jobs1:13:08; recounted hiring a non-English-speaking Ukrainian refugee welder who became one of her top production employees0:52:07.

Chair Ted Cruz (R-TX)1:06:17: Asked Dr. Mercogliano whether the Ships for America Act's subsidy-funded shipbuilding targets would require permanent tonnage taxes and import fines1:06:17, and pressed all witnesses on the most important steps to reinvigorate commercial shipbuilding1:10:04.

Sen. Todd Young (R-IN)1:18:14: Entered 51 statements from 64 organizations supporting the Ships for America Act into the record1:18:14; discussed "seapower" as economic as well as military force with Dr. Mercogliano1:20:23; later confirmed with Ms. Snow (misattributed caption) and Mr. Vogel that the Vessel Construction Manager model overcomes procurement/change-order regulatory burdens1:54:07; raised opportunities for Indiana shipyard supply-chain work1:56:24.

Sen. Brian Schatz (D-HI)1:24:01: Asked Mr. Vogel what is going right at successful shipyards and how to replicate it nationally1:24:28, and pressed on whether barriers are regulatory or structural1:25:47; asked Mr. Paxton about workforce pipeline issues1:26:52.

Sen. John Curtis (R-UT)1:29:21: Asked Dr. Mercogliano what the U.S. should learn from China's consolidation of shipyards into large conglomerates and the risks of Chinese dominance1:29:51; cited China receiving about $132 billion in subsidies from 2010–2018 versus $77 million in U.S. grants1:30:51, and noted China's shipbuilding share rose 16 percentage points over three years at Japan's and Korea's expense1:32:07.

Sen. Tammy Baldwin (D-WI)1:34:10: Highlighted Wisconsin's Great Lakes shipbuilding history and said China has built 717 large commercial vessels this year versus one for the U.S.1:35:27; asked about utilizing Great Lakes workforce1:35:56 and championed the Small Shipyard Grant program1:37:12.

Sen. Bernie Moreno (R-OH)1:40:27: Asked Mr. Paxton what has changed after 18 years of advocacy, noting China's WTO entry roughly 25 years ago was a "catastrophic disaster" for global shipbuilding1:40:55; pressed on energy, tax, and workforce policy in the "One Big Beautiful Bill"1:41:511:43:08; asked about American capital financing China's shipbuilding rise1:46:26.

Key moments

Cantwell said the U.S. produces just 0.2% of world commercial shipping while China, South Korea, and Japan build more than 90% combined, with China alone having 1,794 ships in production in 2022 versus five for the U.S.0:30:120:30:41.

Chair Sullivan pressed all three expert witnesses on "what went wrong," and Paxton and Vogel agreed the U.S. deliberately shifted from industrial policy toward government (Navy) shipbuilding after the Cold War, assuming commercial capacity would follow0:54:220:55:230:55:57.

Vogel testified that using the Vessel Construction Manager model to bypass Federal Acquisition Regulation constraints took Philly Shipyard from 83 to over 2,000 production employees and delivered vessels at just 0.38% cost growth over budget0:56:591:25:08.

Curtis cited that China received roughly $132 billion in direct and indirect subsidies from 2010–2018 versus $77 million in comparable U.S. grants, and warned Chinese commercial ships are increasingly built with embedded military capability1:30:511:31:43.

Mercogliano said less than 2% of U.S. imports and exports move on U.S.-flagged ships, down from the 11% that prompted the original 1920 Jones Act, leaving the U.S. vulnerable to disruption if a rival nation slowed its vessels1:22:201:23:00.

Baldwin stated China has built 717 large commercial vessels so far this year compared with one built in the United States1:35:27.

Moreno and Mercogliano agreed American capital remains the "fourth-largest investor" in global shipping but largely bypasses U.S.-flagged shipping in favor of offshore investment, including recently financing an Italian company's first Chinese-built passenger liner1:43:081:47:10.

Sullivan and Vogel identified eliminating mid-build "change orders" — citing a former Navy secretary's account of the 600-ship Navy buildup — as a key lesson for controlling shipbuilding costs and schedules1:48:341:49:19.

Snow described hiring a Ukrainian refugee who could not speak English but could weld; after a 30-minute weld test he was hired immediately and later became one of the company's highest-paid production employees and a team leader0:52:070:52:56.

Both party leaders used their opening statements to link the hearing to the ongoing government shutdown: Sullivan urged Democrats to support a "clean CR"0:24:11, while Blunt Rochester said it was "not normal" to hold the hearing during a shutdown that is raising health costs and cutting SNAP benefits0:25:460:26:13.

Metadata

CommitteeSenate Commerce, Science, and Transportation Subcommittee on Coast Guard, Maritime, and Fisheries
Chamber / CongressSenate · 119th Congress
Date2025-10-28
TypeMeeting
Witnesses
(none listed in event metadata)
Videosenate-isvp
Transcript306 caption blocks · 13,695 words · 2:03:25 runtime
EventCongress.gov 337580