House defense bill wants new US-built ships to modernize the strategic sealift fleet

WASHINGTON -- House lawmakers are trying a new approach to recapitalizing the nation's strategic sealift fleet, after recent efforts to push the Defense Department and the Transportation Department to invest haven't yielded much progress.

The Maritime Administration, housed under the Transportation Department, is responsible for overseeing fleets of government-owned and industry-owned ships that could move military gear into theater if war broke out. These car-carriers and other cargo ships would take 90% of the ground force's gear into theater by sea, though as the soldiers themselves would likely use U.S. Air Force strategic airlift.

Following a sealift failure in the first Gulf War, where 300-plus ships proved unreliable and took five months to deliver their loads to the Middle East, the U.S. recapitalized the fleet in the early 1990s.

Now, though, those ships are aging out of service and the sealift fleet is small and unreliable -- a 2019 turbo activation exercise showed only a 40% success rate when the ships were scrambled to sea.

Congress in recent years has tried to get the Maritime Administration to buy up to seven used vessels to add to the Ready Reserve Force, a government-owned element of MARAD's sealift capability. MARAD and the U.S. Navy in March selected the first two ships to add to the fleet, but it's unclear whether there are even five more ships on the market MARAD could buy to meet its needs.

Rep.

Rob Wittman, R-Va., said at a recent American Society of Naval Engineers event sealift is of great importance, even if it doesn't have a natural constituency to pay for it. While the Navy has the expertise to manage a ship program, the Army is the beneficiary of it, and much of the sealift fleet is run by the Maritime Administration. It's easy to fall through the cracks, especially in tight budgets, he said, but it has to be dealt with.

"Think about if something happened today with an attack on Taiwan by China: the question is, do we have the logistical capability to respond?

I would argue we've got a great first punch, but it would be very hard to sustain that, especially with the current age and number of ships we have in the Maritime Security Program, the Ready Reserve Fleet -- all of those are far short of what we need," he said.

"The Army can do all kinds of great things ... but, you know what, you're going to be sitting in [the continental U.S.] if something breaks out and you can't get to the fight," Wittman continued. "The Army needs to be pounding the table and saying, 'Hey, listen, we need logistics ships.'"

The Navy's shipbuilding budget is focused on a once-in-a-generation recapitalization of the nuke-carrying ballistic missile submarine fleet, among other China-focused priorities.

"But we have so neglected our logistics fleet that it will be our Achilles heel if we don't get our derrieres into gear, and fast," Wittman warned.

Now, the House Armed Services Committee is directing a new ship construction program.

The committee's fiscal 2023 National Defense Authorization Act, passed out of committee in the early hours of June 23, directs the Maritime Administration to design and build up to 10 new sealift ships at a U.S. shipyard. Construction of the new ships would depend on Congress providing funding to the Transportation Department.

Industry and sealift experts say this is a better solution that will shore up the American shipbuilding industry and ensure American tax dollars don't end up at Chinese shipyards.

Rep. Joe Courtney, the Connecticut Democrat who leads the House Armed Services seapower and projection forces subcommittee, said this week it's "imperative that a new domestic-build program for sealift moves forward."

"It will be a growth opportunity for America's shipbuilding industrial base and will reduce our dependency on the foreign used-sealift market, which is far from reliable," he added.

The challenges of buying used

The current practice of buying used ships to put into the Ready Reserve Force has two major flaws, according to sealift experts Jim Strock and Art Divens.

Strock, who worked on sealift and prepositioning issues for decades while serving in the Marine Corps and as a Marine civilian, told Defense News these used ships were built as commercial car-carriers, meaning, in some cases, more than half the space onboard is not militarily useful.

And decks aren't strong enough, ceiling clearances are too low, ramps are too steep and corners are too tight. (Strock now works as a consultant and counts among his clients some of the potential competitors for a new sealift ship).

Divens, a former Navy senior executive and sealift program manager who now also works as a maritime business consultant, said "buy used is essentially buy Chinese."

Ships that end up in the Ready Reserve Force might have a history like Honor and Freedom, the two ships selected for purchase in March. They were built in a Japanese shipyard in the 1990s or in a South Korean shipyard in the early 2000s. They were operated for about seven years by a big company like Wallenius Wilhelmsen, shipping cars, tractors and other massive gear around the world.

Then the ships might be sent to a U.S. subsidiary of the parent company, where they could participate in the Maritime Security Program -- a MARAD program that pays U.S. shipping companies a yearly retainer to be on call if needed to transport military gear to a war or crisis.

Once the ships have served perhaps 18 years in the Maritime Security program, making them about 25 years old, they could be sold to the Maritime Administration as used ships for the Ready Reserve Force.

The catch, Divens said, is that 18 years of retainer fees -- £5 million a year now, gradually increasing to £7 million a year by next decade -- plus the cost of buying the vessel go to a European parent company.

And that company is then likely spending that money to buy a new ship from a Chinese shipyard.

The National Security Multi-mission Vessel is MARAD's training ship and includes eight classrooms, a full training bridge, lab spaces and an auditorium to host up to 600 cadets for at-sea training. (MARAD photo)

What a new-build program might look like

The Navy attempted something like this a few years ago, with a Common Hull Auxiliary Multi-mission Platform that was meant to address a range of needs in one effort: strategic sealift ships, hospital ships, command and control ships, submarine tenders and aviation logistics ships.

But the effort fell apart as it grew too expensive.

Brett Hershman, the director of business development and government relations at General Dynamics NASSCO, told Defense News the company in response to a 2019 Maritime Administration request for information designed a basic purpose-built sealift ship to commercial standards.

The ship is smaller than the car-carriers but doesn't have wasted space. It has 150,000 square feet of deck space and a 28-foot draft that would allow it to pull into more ports, and Hershman said the U.S. shipbuilding industry could likely build them for about £330 million apiece if multiple shipyards agreed to build the same design with the same set of vendors.

Hershman said NASSCO might be able to build one a year in the near term, and maybe three a year next decade. Other companies like VT Halter, Philly Shipyard, Ingalls Shipbuilding and many more could also build these ships, he said -- if they all worked together, he projected the entire aging fleet could be replaced with 40 new ships within 15 years.

Hershman offered up MARAD's National Security Multi-Mission Vessel as an example.

The training ship is of a comparable size and complexity to the basic sealift ship, and Philly Shipyard is building them for about £380 million apiece. Volume for the sealift program would bring down the price per ship, he said.

Wittman, the subcommittee's ranking member, said he's confident the U.S. can build competitively priced basic sealift ships.

"We can't compete with China because they underwrite the cost of their industry," he said. "But what I believe is we have American companies that can partner with foreign companies like those that build ships in South Korea and elsewhere, and that we can build a logistic ship that's very competitive and that has the full service life left in the ship."

"It will not be as cheap as a used ship, but I do think there's utility in using a combination of those efforts -- both buying used and building new," Wittman added, noting the cost of buying used ships is going up due to inflation and other market pressures.

Strock said MARAD originally expected to pay about £30 million apiece for used ships, but the figure rose to about £45 million when it came time to sign a contract this spring. (The Maritime Administration did not disclose the price it paid).

With Honor and Freedom, Strock and Divens said, MARAD likely paid a combined total of £150 million to £200 million for the ships' retainers over the years, acquiring them and repairing them before putting them in the Ready Reserve Force. These ships, though, are past their planned lifespan, and it's unclear how long they'll remain in the Ready Reserve Force.

Wittman told Defense News it's a first step to authorize the design and construction of the first sealift ships, but the next one is to pursue a design and cost comparison so Congress can make a longer-term decision about the sealift fleet.

The new-build sealift program does not appear in the Senate Armed Services Committee's defense authorization materials yet, but Wittman will have a chance to make his case to the other chamber later this year when the two committees work through the differences in their bills.

"We've been jumping up and down about logistics the last four or five years, and I think it's finally starting to hit home with folks about the incredible importance of that. We can talk all the time about warships, but if you can't sustain a force, then you don't have a force," he said.

Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S.

Navy and Marine Corps operations, acquisition programs, and budgets.

She has reported from four geographic fleets and is happiest when she's filing stories from a ship.

Megan is a University of Maryland alumna.