Who builds commercial ships?

Well, in 2022 China built the lion’s share of large oceangoing vessels according to a report by the Barry Rogriano Salis (BRS) Group. China built 121.3 million deadweight tons (DWT) of ships based on its order book at the end of 2022 up from 111 million DWT in 2021. And as a result, China’s share of the global market rose from 47.7% to 50.3%.

South Korea, a distant second in the global shipbuilding sweepstakes, built ships of 69.8 million DWT in 2022, up from 68.3 million DWT in 2021, but its market share inched down from 29.6% to 29.0%, according to a November report by Business Korea. And in the number three slot was Japan. Japan’s order intake shrank from 47.7 million DWT in 2021 to 36.5 million DWT last year, and its market share fell from 17.6% to 15.1%.

So where was the greatest industrial power on the planet, the United States, in the commercial shipbuilding ranks? The US market share was a measly 0.2%.

It is no surprise the U.S. Congressional Research Service (CRS) cited the data and noted that 90% of military equipment needed for overseas wars is transported by cargo ships and expressed a concern about the United States lack of competitiveness and the possible negative impact on America’s national security. But this is nothing new as this situation has existed for decades.

The U.S. Shipbuilding Mobilization of 1939-1945

It wasn’t always so.

Before the United States allowed its shipping industry and shipbuilding to decline, the United States pioneered shipbuilding mass-production during World War II.

During the period of 1939-1945, 5,777 ships including the Liberty ships, Victory ships, tankers, and military ships were constructed at U.S. shipyards.

The shipbuilding program produced a Liberty ship that could transport 10,800 deadweight tons (the weight of cargo a ship can carry). In total, the 2,708 Liberty ships that were built collectively generated the capacity to transport 29,246,400 tons of weapons, food and supplies to European and Asian military theaters that helped win World War II.

The shipbuilding program employed 650,900 American workers. African Americans and women were employed by the shipyards in large numbers and the shipbuilding employment boom helped pull the United States out of the Great Depression financed by federally financed war orders.

It may be time to review that success and why it may be relevant in 2024.

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In the aftermath of the failed effort by the Oakland A’s to build a ballpark and condominiums on the Port of Oakland property, the Port of Oakland’s Executive Director Danny Wan and Maritime Director Bryan Brandes sought support for major infrastructure upgrades to port operations.

Wan noted that the Port has won $600 million in new investments: “We’ve gotten … over $600 million of investment on grants from both the federal and state levels. Those go into projects like the Seventh Street access improvements, port efficiency, data improvements, and harbor strengthening.”

On November 14th, Wan explained to an assembly of maritime stakeholders that he had requested the Propeller Club of Northern California organize a meeting with Port stakeholders to discuss future projects and improved collaboration. He asked, “We get everybody in a room … to give us some ideas about what you think needs to happen at the Port of Oakland to grow our business …I’m so very heartened by … all of you showing up today.”

SSA Voices Concerns

Ed DeNike, President, of SSA Containers, which operates the biggest terminal at the Port of Oakland (Oakland International Container Terminal or OICT) said that the Port’s support for the failed Oakland A’s ballpark and condominiums at the Port of Oakland’s Howard Terminal created uncertainty. He said it undermined SSA’s ability to attract customers to the Port of Oakland: “We signed a long-term commitment with the Port of Oakland … We bought the biggest cranes in the world sitting at OICT handling any ship that’s going to be built now or for the next 20 years. We bought equipment … This thing that happened at Howard Terminal hurt us. We stopped getting any commitment from any carriers for not more than one year because they didn’t know what the future was in this Port. We need volumes and we need commitments. We can talk and say anything … that we want to (but) when carriers hear that the Port doesn’t care about them, I’m not saying it’s true, but that’s what they think. When the Port says that there’s going to be other uses for a marine terminal then … our customers need to know that the Port of Oakland is supporting the future of this Port then we can get long-term commitments.”

DeNike’s concern was repeated publicly and privately by other stakeholders who say they have confidence in the Port staff but do not have confidence in the City of Oakland. They say the City ignored pleas from truckers, the railroads, terminal operators, longshore labor, freight forwarders, and others that the ballpark and condominium project would be severely disruptive to Port operations.

DeNike was positive about the support SSA has received from International Longshore and Warehouse Union (ILWU) Local 10 which represents longshore labor at Oakland: “We’ve worked with Local 10 for a long time. I feel Local 10 now is … the best I’ve ever seen them … I think … they realize that their future also is to get the job done. And I think the employer, not only SSA, but the other employers too, have convinced Local 10 that they have to step up to the plate.”

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