Maersk CEO: argument for boosting US shipbuilding could be made, but would be ‘quite a task’

A leading shipping executive believes an argument can be made for revitalising US shipbuilding in light of China’s dominance of global shipbuilding.

“Some 70% of world shipbuilding capacity is in the hands of state-owned enterprises in China,” observed Maersk chief executive Vincent Clerc. “How big a threat is that to the national security of the United States and the rest of the world? I don’t know,” said Mr Clerc. But he said an argument could be made as to why there could be a long-term risk to US national security interests when “all of the manufacturing, design, innovation and knowhow is in the one country you consider your rival.”

Mr Clerc made his comments during a panel, Demystifying Industrial Policy, at World Economic Forum in Davos, Switzerland.

He said revitalising the US shipbuilding would be “quite a task” as it would require years to achieve and the creation of a multi-tiered supply chain to support commercial ship construction.

One idea floated during the Biden Administration was to impose a US$1M fee on Chinese-built ships calling at US ports. If shipowners wanted to avoid the fee, they would have to redeploy assets – gas carriers, container ships, tankers and bulk carriers built in South Korea of Japan, for example. The availability of such ships would be quickly exhausted.

Mr Clerc said even with the fee on Chinese-built ships, it would take a minimum of six or seven years before a commercial ship would be delivered from a US shipyard.

“In political terms, that’s one and a half lifetimes,” he concluded.

Bipartisan and bicameral legislation has been filed to spur commercial ship construction in the US.