Challenges to the U.S. Commercial Maritime Industry

Timothy A. Walton, Research Fellow at the Center for Strategic and Budgetary Assessments (CSBA), presented Challenges to the US Commercial Maritime Industry during the Update on the Maritime Industry class at the NDTA-USTRANSCOM Fall Meeting on October 7, 2019, in St. Louis, Missouri. 

CSBA released a study on US maritime logistics and proposed an approach for making the force more resilient. The study found that current and programmed defense maritime logistics is inadequate to support US strategy, particularly against China or Russia.

The study also found that America needs new logistics concepts and capabilities to allow the National Fleet to fight in a more effective, distributed, and sustained manner while supporting Joint Force power projection. In addition, a new, operationally resilient fleet would be numerically larger, more differentiated, and only moderately more expensive than the programmed force.

Adversaries such as Russia—and especially China—are focused on counter-logistics. “China has the capabilities to kinetically and non-kinetically threaten US force ashore and afloat throughout the Indo-Pacific,” said Walton. He added that Chinese doctrine specifically lists logistics as its second most important target, just behind information targets.

China’s Integrated Maritime Strategy provides a dual-sided approach in which the country is developing a world-leading naval fleet and the world’s leading commercial maritime industry. China focuses on combatant and support platforms, afloat and ashore, as well as what areas of the world where they want to operate.

Since 2010, China has been the world’s largest shipbuilder. As part of the country’s Made in China 2025 initiative, high-technology shipbuilding is identified one of the top ten sectors the country wants to dominate.

China has the largest merchant marine and fishing fleets. Leveraging heavy subsidies, this combined fleet supports commercial operations and is organized into a maritime militia that is engaged in a number of gray zone operations and exercises for high-intensity operations.

“In terms of ports operations, the Chinese Communist Party views ports as a critical component of their One Belt One Road strategy. Four of the ten of the world’s largest ports are in China and nearly two-thirds of the world’s largest 50 container ports have received Chinese investments, including here in the US,” said Walton. “Chinese investment in ports is only accelerating and some of those are likely debt traps where countries will not be able to manage the debt incurred by that infrastructure investment.”

The port investments support the Chinese commercial industry. Moreover, they provide the People’s Liberation Army with a global network of operating locations that complement or substitute for explicit bases. It may also offer China the ability to covertly gather intelligence or deploy weapons at many locations around the world. While the full implications of these investments is not known, the potential to restrict US military cargoes or constrain the actions of other nations is problematic.

A predatory mix of protectionist policies at home and mercantilist ones abroad are increasing China’s comprehensive maritime power. This may enable China to coerce the US and its allies economically and politically, restricting their access to markets, denying their ships to carry commerce, stripping the US of allies and partners, and reshaping the global maritime order.

A strong US and allied response is needed to revitalize maritime networks that respect states’ sovereignty and strengthens their international competitiveness. Furthermore, the US government needs to steward the commercial maritime industry and make smart investments to cultivate assured access to requisite capabilities.