The Last Resort
America at Sea: Voices That Matter is a conversation hosted by Americans for a Stronger Navy, supported by U.S. Maritime Action and moderated by Capt. Brent Sadler, USN (Ret.). Shipbuilders, mariners, industry, the Navy community and policy experts answer the same three questions about rebuilding America at sea: What’s working? What’s in the way? What would you fix first?
America’s strength at sea is more than the Navy. It is the ships that move goods along our coasts and rivers, the fleet that carries our trade overseas, and the shipyards, ports and mariners behind all of it. In a crisis, the Navy leans on the same yards, crews and cargo ships that keep our economy moving. That is why this series covers all three.
Our guest is Colin Grabow, Associate Director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, where his research focuses on the Jones Act and other domestic trade protections [1]. Colin is one of the country’s best-known critics of the Jones Act. Not everyone in this series agrees with him, and that is the point. We want every serious voice in this conversation. His views here are his own.
Question 1: What’s working?
Colin’s answer is blunt: in his opinion, very little. He explains why with a thought experiment. Look down at the United States from space, he says, and you see thousands of miles of coastline lined with major cities, inland rivers, the Great Lakes, and states and territories that can only be reached by sea. A reasonable person would conclude that moving goods by water must be a very big deal here.
It isn’t. Of the freight moved inside the country by road, rail and water, water carries less than 10 percent, measured in ton-miles. Coastal shipping is around 4 percent. Most of what does move by water is crude oil and petroleum products, plus cargo to and from Alaska, Hawaii, Guam and Puerto Rico, where there is no other option.
“We’ve taken what should be a really optimal means of moving goods in a country as big as the United States, and we’ve made it the last resort.”
The reason, he says, is cost. Three container ships now being built at the Philly Shipyard each cost more than $330 million [2]. He estimates the same ships would cost less than $80 million in Asia. Of roughly 60,000 ships in the world, he counts fewer than 100 in U.S. domestic commerce. The domestic fleet has become mostly barges, and it is old. Ships that would be scrapped at 20 to 30 years overseas often sail past 40 here.
His sharpest example is Pasha Hawaii. Rather than order new ships, the company sent two container ships built in 1980 to a state-owned shipyard in China to convert them from steam to LNG power [3][4].
“No other country in the world does this. This is purely a product of U.S. maritime dysfunction.”
He points to the same pattern on the Great Lakes, in the tugboat and fishing fleets, and in shipbuilding itself. Last year, by his count, the United States produced 0.03 percent of the world’s commercial shipbuilding output, ranking 19th, just ahead of Croatia [5]. He also notes, while saying he is not a naval expert, that nearly every major Navy shipbuilding program is late and over budget, and that the Coast Guard’s first heavy icebreaker, ordered in 2019 for 2024 delivery, has slipped years. A recent GAO report now projects 2033 [6].
Question 2: What’s in the way?
Colin’s answer will surprise no one who follows his work: the Jones Act. He doesn’t call it the only cause of the problems he describes, but he calls it a major one. Section 27 of the Merchant Marine Act of 1920 limits domestic water transportation to ships that are U.S.-flagged, at least 75 percent U.S.-owned, and built in the United States [7].
Defenders call the law the foundation of U.S. maritime policy. Colin’s reply: when things go wrong, check the foundation. Tying shipping to a costly shipbuilding industry that builds few ships, he argues, fails the very industry it is meant to protect. We don’t require U.S.-built aircraft or rail cars, he notes, so why ships?
“It is a self-imposed embargo. It’s what our enemies would want to do to us.”
He traces U.S.-build rules back to 1817, and arguably 1789, when American yards were among the most competitive in the world. That is not the world we live in now, he says. And high ship prices suit companies that already own ships, because they raise the value of those ships and keep competitors out.
“I think reasonable people can disagree about the exact changes that are needed, but I totally reject the notion that it’s fine.”
Question 3: What would you fix first?
Repeal the Jones Act’s U.S.-build requirement, or at least change it in a major way. In his view, it puts a heavy financial burden on shipping in exchange for very little shipbuilding. Over the last 25 years, he says, all U.S. shipyards combined have built about 2.6 large ships a year on average.
He also takes on the argument that at least what we build is built here, so we don’t depend on foreigners. We already do, he says. Pasha’s newest U.S.-built container ship, the Janet Marie, has a Chinese-built propeller and a South Korean-built engine. He recalls a Philly Shipyard executive saying around 2015 that about half of the roughly one million parts in one of its ships were imported.
“Just purely within the scope of the self-interest of the U.S. maritime industry, this is a requirement that just has to go.”
The takeaway
Colin’s diagnosis is hard to dismiss. A country built around coasts, rivers and lakes barely ships by water, its domestic fleet is small and old, and its commercial yards produce a sliver of world output. His prescription is where people part ways. Defenders of the build requirement, including the American Maritime Partnership, argue it keeps the industrial capacity the country needs to build its own ships in a crisis [8]. Colin’s answer is that 0.03 percent of world output is not much capacity to protect. Whichever side you lean toward, the numbers he lays out are worth knowing. As always, these are the guest’s views, and featuring them is not an endorsement. What do you think?
About America at Sea: Voices That Matter
America at Sea: Voices That Matter is a conversation hosted by Americans for a Stronger Navy, supported by U.S. Maritime Action and moderated by Capt. Brent Sadler, USN (Ret.). Shipbuilders, mariners, industry, the Navy community and policy experts answer the same three questions about rebuilding America at sea. Views expressed are the speaker’s own, and featuring a view is not an endorsement.
Join the conversation on X. What’s working? What’s in the way? What would you fix first?
About the Guest
Colin Grabow is Associate Director at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, where his research focuses on domestic trade protections such as the Jones Act and the U.S. sugar program. He is the author of the Cato study Rust Buckets: How the Jones Act Undermines U.S. Shipbuilding and National Security and co-editor, with Inu Manak, of The Case against the Jones Act. His writing has appeared in the Wall Street Journal, USA Today, National Review and The Hill. Before joining Cato, he did political and economic analysis for a Japan-based trading and investment firm and research on U.S.-Asia relations for an international affairs consulting firm. He holds a BA in international affairs from James Madison University and an MA in international trade and investment policy from George Washington University [1].
References
[1] Cato Institute, “Colin Grabow.” https://www.cato.org/people/colin-grabow
[2] iMarine News, “Hanwha Philly Shipyard’s $1B Matson Container Ship Order Delayed to Q2 2028.” https://www.imarinenews.com/34992.html
[3] Marine Log, “Pasha to repower veteran box ship to LNG dual fuel.” https://www.marinelog.com/news/pasha-to-repower-veteran-box-ship-to-lng-dual-fuel/
[4] Marine Log, “MARAD funds two LNG-as-fuel projects” (Horizon Spirit, delivered 1980). https://www.marinelog.com/news/marad-funds-two-lng-as-fuel-projects/
[5] Colin Grabow, “New Data Lay Bare the Jones Act’s Broken Shipbuilding Bargain,” Cato Institute, June 26, 2026. https://www.cato.org/blog/new-data-lays-bare-jones-acts-broken-shipbuilding-bargain
[6] gCaptain, “U.S. Polar Security Cutter Delayed to 2033 as Costs Top $6 Billion, GAO Warns.” https://gcaptain.com/u-s-polar-security-cutter-delayed-to-2033-as-costs-top-6-billion-gao-warns/
[7] Colin Grabow, “The Jones Act Is Protecting U.S. Shipyards to Death,” Cato Institute. https://www.cato.org/commentary/jones-act-protecting-us-shipyards-death
[8] Marine Link, “AMP Opposes Amendment to Eliminate US Shipbuilding.” https://www.marinelink.com/news/shipbuilding-amendment383916.aspx