Multipurpose Vessel Outlook Breakbulk & Project Cargo an MPV in the US — if capacity and specialization were available , which they are not — is currently about four to five times the cost to build in Asia , particularly China .
In addition , costs to operate under the US flag are significantly higher than under the popular open registry of Panama . Therefore , any MPVs built and maintained under the parameters of the act would be considerably more expensive to operate .
The legislation has an answer for that . The fleet program will provide annual support payments to cover that difference in capital and operating costs . MPVs would be included in the US fleet for seven years and therefore eligible for the payments , with the option to renew twice . However , this assumes a vessel lifespan of just 21 years , which , in MPV terms , is at least nine short of expected demolition .
China delivered 34 % of all newbuild vessels in 2024 , compared with just 2 % from the US . Shutterstock . com
A notable omission
There are also concerns among US-flag shipowners who spoke with the Journal of Commerce that , although the act refers to shipbuilding and ownership , there is little in it related to cargo preference . “ Cargo preference ”
Shipowners say they need cargo guarantees to invest in US-flag MPV / HLs .
is the general term used to describe US laws , regulations and policies that require the use of US-flag vessels in the movement of cargo that is owned , procured , furnished or financed by the US government . For US Export Import Bank ( EXIM ) cargo , the percentage required is 100 %; for civilian agency cargo , it is 50 %.
Cargo preference requirements may increase further down the line , though , as the act aims to establish a
More than half of MPV / HL fleet built in China
Multipurpose and heavy-lift vessels ( MPV / HLs ) by origin country and ship type
China
Japan Netherlands
Germany Netherlands
Poland
Denmark USA ROW
www . joc . com
0 200 400 L 600 800
MPV max lift < 239t MPV max lift > 750t MPV max lift 240-749t
Open-hatch MPV Notes : Data as of January 2025
Source : Journal of Commerce , S & P Global
Specialised Heavy Load Carrier
984
© 2025 S & P Global
L
commercial cargo preference , requiring that within 15 years , 10 % of all cargo imported to the US from China is carried by US-flag vessels .
Title IV also increases the percentage of US government cargo that must sail on US-flag vessels from 50 % to 100 %. But there is no mention of an increase in general cargo preference , crucial for MPVs . For the legislation to succeed , it must include guarantees on cargo running in parallel with the investment in shipbuilding , MPV owners have told the Journal of Commerce ; otherwise , shipowners will not sign on the dotted line .
Yard capacity is another barrier to success . The two main yards that build commercial — as opposed to military — vessels are Philly Shipyard and General Dynamics ’ NASSCO . Philly Shipyard is headquartered in Oslo , Norway , with its operating subsidiary in Philadelphia . On the commercial side , it builds tankers and container ships . NASSCO , which has locations on both the US West and East coasts , specializes in auxiliary and support ships for the US Navy . There are currently seven NASSCO-built heavy-lift semisubmersible vessels trading on behalf of the US government , with one more on the order book to be built at NASSCO , according to S & P Global .
However , these yards build very few , if any , general cargo ships and no specialized project carriers . Their order books are full for the tonnage that they do build , which include military , small container ships and tankers . This means that there is limited capacity before 2027 – 28 . Substantial investment will be needed to create additional capacity .
The legislation has caught the attention of the MPV sector , with President Trump ’ s “ Make America Great Again ” campaign prioritizing these types of protectionist measures . But to succeed , the SHIPS Act would need to force change in an industry that currently lacks the capacity and the expertise to produce ocean-going vessels at scale .
email : susan . oatway @ spglobal . com
March 2025 | Journal of Commerce 17