When Donald Trump returned to the White House last January, one of his earliest declarations was that the United States would begin building ships “very fast, very soon.” But in the ten months since his inauguration, the administration’s actions have not laid the groundwork for a shipbuilding revival. If anything, they have actively undermined the industry’s prospects.  

Unlike many of Trump’s other policy priorities, this one at least addresses a worthy cause. A strong maritime sector underpins everything from trade resilience to military readiness. Merchant ships transport critical cargoes across oceans, transport aid during disasters, and sustain the skilled mariners that the military relies on for sealift in wartime. Yet decades of decline have left American yards with a sliver of the global market, old infrastructure, and a shrinking workforce.  

At first, Trump appeared to recognize the scale of the problem. In March, the administration announced the creation of the Office of Shipbuilding within the National Security Council, billed as the centerpiece of a broader maritime strategy. The following month, an executive order raised hopes for a coordinated industrial policy and a whole-of-government approach. But within months, that effort had collapsed.  

Mike Waltz, the former national security adviser and a central architect of Trump’s shipbuilding executive order, was pushed out for his role in Signalgate, the scandal in which Waltz erroneously added the editor in chief of The Atlantic to a group chat where top administration officials were discussing imminent plans to bomb Yemen. Soon after, Ian Bennitt, the senior director tapped to lead the shipbuilding office, resigned. And because of Trump’s cuts to the NSC, five of seven staffers in the shipbuilding office soon followed. Then, in a clear sign that maritime strategy was no longer a priority, the office was quietly downgraded, moved out of the NSC, and folded into the Office of Management and Budget. 

At the same time, the Maritime Administration, the federal agency most directly responsible for supporting U.S. shipping, remains leaderless. So far, no administrator has been confirmed. Without permanent leadership, MARAD has been unable to set priorities and goals, press for needed resources, or reassure industry stakeholders about the administration’s seriousness.  

A recent Government Accountability Office report underscored the problem, noting that MARAD “cannot determine to what extent [its] programs are effective in growing the U.S. maritime fleet because it has not established measurable goals … or assessed the performance” of its programs. The absence of leadership has prevented the government from exercising its powers to grow maritime capacity.  

That leadership vacuum extends into the training pipeline. The United States currently faces a shortage of thousands of mariners. Nonetheless, the administration has done little to strengthen the maritime pipeline. At the U.S. Merchant Marine Academy in Kings Point, New York, the nation’s primary training ground for sealift officers, conditions have deteriorated. Transportation Secretary Sean Duffy has publicly acknowledged problems ranging from months without hot water in students’ showers to a crumbling library and dorms riddled with mold. But rather than moving swiftly to stabilize the institution, the administration has left the academy without permanent leadership in its top three positions. A school critical to producing the next generation of mariners risks falling further behind, undermining the very workforce any maritime revival depends on. 

Trump-led appropriations bills have also starved maritime capacity. In Trump’s most recent appropriations bill, the Small Shipyard Grant Program, one of the few federal mechanisms for helping grow shipbuilding capacity, received $8.75 million, a record low and less than half of the $21 million it received during the Biden administration.  

For shipyards competing against heavily subsidized foreign rivals, these grants often determine whether they can afford to modernize equipment like cranes and welding machines or fall further behind. Demand for the grants has consistently exceeded supply, with applications surpassing available funds by more than five times. Underfunding the program not only reduces its effectiveness but also signals a retreat at a time when foreign shipyards are receiving significant government support. 

The administration’s erratic policies have also discouraged foreign allies from stepping up to fill the shipbuilding gap. After one of South Korea’s largest shipbuilders, Hanwha Ocean, acquired Philadelphia Shipyard in 2024, Seoul appeared ready to make substantial investments to modernize American yards and train American workers. In fact, during recent bilateral trade negotiations, South Korea signed a nonbinding agreement to direct $150 billion toward U.S. shipbuilding. But Trump quickly undercut the deal. His administration staged a highly publicized immigration raid at a Georgia battery plant operated by South Korean firms, sparking diplomatic tensions and casting significant doubt on the future of the shipbuilding investment. 

Perhaps Trump’s most damaging decisions concern future demand. Historically, American shipyards have thrived during periods of maritime innovation. During World War II, for example, the United States developed oil-powered ships to reduce reliance on British coaling stations. During the early Vietnam War era, the U.S. developed containerization to speed loading and unloading cargo. In the 1960s and ’70s, it developed and built new ship designs, such as the so-called lighter aboard ship, using a new intermodal concept that allowed larger vessels to carry smaller ships on their decks to allow for more efficient cargo transportation. The U.S. also built ships that could carry liquified natural gas. 

A similar opportunity is emerging with “green shipping.” Spurred by the International Maritime Organization’s proposed rules on decarbonization, a wave of orders for cleaner ships is expected in the coming decade. But rather than positioning U.S. yards to compete, Trump is pressuring IMO member nations to scuttle the regulations, eliminating a potential opportunity for the United States to break into the shipbuilding sector. Without new maritime innovation, the U.S. will struggle to enter the current shipbuilding market, on which China has a firm grasp.  

Offshore wind tells a similar story. Under the Biden administration, demand for clean energy spurred U.S. yards to build the specialized vessels the sector requires. For example, a Texas yard completed the nation’s first wind turbine installation vessel, while a Louisiana yard delivered a ship designed to bury the undersea cables that connect offshore farms to the grid. These projects showed how new industries can generate steady work for U.S. shipbuilders. Yet Trump’s rollback of offshore wind programs has abruptly stalled that momentum. With projects canceled or delayed, yards now face shrinking demand for these vessels, casting serious doubt on whether the sector can provide steady work for American builders. 

Trump’s other reckless actions have had significant impacts. For example, the decision to freeze foreign food aid eliminated reliable cargoes for U.S.-flag vessels. That cargo has supplied humanitarian assistance abroad, keeping ships active and mariners employed at home. Instead, critical food aid rotted in warehouses across the United States, while vessels that carried food aid were forced to idle, sidelining mariners. A knock-on effect of sidelining mariners is reducing military readiness. The armed forces depend on commercial mariners and ships to supplement their sealift fleet. As that pool shrinks, so does military readiness. 

Trump’s attempts at revival have been far short of the comprehensive approach needed to revive the maritime industry. He has proposed imposing high fees on Chinese-built and -owned ships calling at U.S. ports. But while these have reduced the Chinese share of the new-build market, they have done little to build domestic capacity. Without consistent demand and supply-side investment from the federal government, the slew of port fees will add little new maritime capacity. The pattern that emerges is one of both neglect and contradiction. The administration has launched offices only to defang them, promised investment only to undercut it, and pointed to growth opportunities only to foreclose them.  

Reviving shipbuilding is achievable. Other advanced economies have sustained competitive industries through predictable investment, robust workforce training, and long-term alignment with global demand trends. China, for example, leveraged decades of government support and industrial planning to become a shipbuilding powerhouse. Trump’s approach has offered the opposite. An industry vital to economic security and national defense lacks clear direction or reliable support. Trump’s declaration that America would soon build ships hasn’t led to action. Instead, his policies have made a revival less likely. 

The post Trump Promised a Shipbuilding Boom. He’s Sinking It Instead appeared first on Washington Monthly.

When Donald Trump returned to the White House last January, one of his earliest declarations was that the United States would begin building ships “very fast, very soon.” But in the eight months since his inauguration, the administration’s actions have not laid the groundwork for a shipbuilding revival. If anything, they have actively undermined the industry’s prospects.  

Unlike many of Trump’s other policy priorities, this one at least addresses a worthy cause. A strong maritime sector underpins everything from trade resilience to military readiness. Merchant ships transport critical cargoes across oceans, transport aid during disasters, and sustain the skilled mariners that the military relies on for sealift in wartime. Yet decades of decline have left American yards with a sliver of the global market, old infrastructure, and a shrinking workforce.  

At first, Trump appeared to recognize the scale of the problem. In March, the administration announced the creation of the Office of Shipbuilding within the National Security Council, billed as the centerpiece of a broader maritime strategy. The following month, an executive order raised hopes for a coordinated industrial policy and a whole-of-government approach. But within months, that effort had collapsed.  

Mike Waltz, the former national security adviser and a central architect of Trump’s shipbuilding executive order, was pushed out for his role in Signalgate, the scandal in which Waltz erroneously added the editor in chief of The Atlantic to a group chat where top administration officials were discussing imminent plans to bomb Yemen. Soon after, Ian Bennitt, the senior director tapped to lead the shipbuilding office, resigned. And because of Trump’s cuts to the NSC, five of seven staffers in the shipbuilding office soon followed. Then, in a clear sign that maritime strategy was no longer a priority, the office was quietly downgraded, moved out of the NSC, and folded into the Office of Management and Budget. 

At the same time, the Maritime Administration, the federal agency most directly responsible for supporting U.S. shipping, remains leaderless. So far, no administrator has been confirmed. Without permanent leadership, MARAD has been unable to set priorities and goals, press for needed resources, or reassure industry stakeholders about the administration’s seriousness.  

A recent Government Accountability Office report underscored the problem, noting that MARAD “cannot determine to what extent [its] programs are effective in growing the U.S. maritime fleet because it has not established measurable goals … or assessed the performance” of its programs. The absence of leadership has prevented the government from exercising its powers to grow maritime capacity.  

That leadership vacuum extends into the training pipeline. The United States currently faces a shortage of thousands of mariners. Nonetheless, the administration has done little to strengthen the maritime pipeline. At the U.S. Merchant Marine Academy in Kings Point, New York, the nation’s primary training ground for sealift officers, conditions have deteriorated. Transportation Secretary Sean Duffy has publicly acknowledged problems ranging from months without hot water in students’ showers to a crumbling library and dorms riddled with mold. But rather than moving swiftly to stabilize the institution, the administration has left the academy without permanent leadership in its top three positions. A school critical to producing the next generation of mariners risks falling further behind, undermining the very workforce any maritime revival depends on. 

Trump-led appropriations bills have also starved maritime capacity. In Trump’s most recent appropriations bill, the Small Shipyard Grant Program, one of the few federal mechanisms for helping grow shipbuilding capacity, received $8.75 million, a record low and less than half of the $21 million it received during the Biden administration.  

For shipyards competing against heavily subsidized foreign rivals, these grants often determine whether they can afford to modernize equipment like cranes and welding machines or fall further behind. Demand for the grants has consistently exceeded supply, with applications surpassing available funds by more than five times. Underfunding the program not only reduces its effectiveness but also signals a retreat at a time when foreign shipyards are receiving significant government support. 

The administration’s erratic policies have also discouraged foreign allies from stepping up to fill the shipbuilding gap. After one of South Korea’s largest shipbuilders, Hanwha Ocean, acquired Philadelphia Shipyard in 2024, Seoul appeared ready to make substantial investments to modernize American yards and train American workers. In fact, during recent bilateral trade negotiations, South Korea signed a nonbinding agreement to direct $150 billion toward U.S. shipbuilding. But Trump quickly undercut the deal. His administration staged a highly publicized immigration raid at a Georgia battery plant operated by South Korean firms, sparking diplomatic tensions and casting significant doubt on the future of the shipbuilding investment. 

Perhaps Trump’s most damaging decisions concern future demand. Historically, American shipyards have thrived during periods of maritime innovation. During World War II, for example, the United States developed oil-powered ships to reduce reliance on British coaling stations. During the early Vietnam War era, the U.S. developed containerization to speed loading and unloading cargo. In the 1960s and ’70s, it developed and built new ship designs, such as the so-called lighter aboard ship, using a new intermodal concept that allowed larger vessels to carry smaller ships on their decks to allow for more efficient cargo transportation. The U.S. also built ships that could carry liquified natural gas. 

A similar opportunity is emerging with “green shipping.” Spurred by the International Maritime Organization’s proposed rules on decarbonization, a wave of orders for cleaner ships is expected in the coming decade. But rather than positioning U.S. yards to compete, Trump is pressuring IMO member nations to scuttle the regulations, eliminating a potential opportunity for the United States to break into the shipbuilding sector. Without new maritime innovation, the U.S. will struggle to enter the current shipbuilding market, on which China has a firm grasp.  

Offshore wind tells a similar story. Under the Biden administration, demand for clean energy spurred U.S. yards to build the specialized vessels the sector requires. For example, a Texas yard completed the nation’s first wind turbine installation vessel, while a Louisiana yard delivered a ship designed to bury the undersea cables that connect offshore farms to the grid. These projects showed how new industries can generate steady work for U.S. shipbuilders. Yet Trump’s rollback of offshore wind programs has abruptly stalled that momentum. With projects canceled or delayed, yards now face shrinking demand for these vessels, casting serious doubt on whether the sector can provide steady work for American builders. 

Trump’s other reckless actions have had significant impacts. For example, the decision to freeze foreign food aid eliminated reliable cargoes for U.S.-flag vessels. That cargo has supplied humanitarian assistance abroad, keeping ships active and mariners employed at home. Instead, critical food aid rotted in warehouses across the United States, while vessels that carried food aid were forced to idle, sidelining mariners. A knock-on effect of sidelining mariners is reducing military readiness. The armed forces depend on commercial mariners and ships to supplement their sealift fleet. As that pool shrinks, so does military readiness. 

Trump’s attempts at revival have been far short of the comprehensive approach needed to revive the maritime industry. He has proposed imposing high fees on Chinese-built and -owned ships calling at U.S. ports. But while these have reduced the Chinese share of the new-build market, they have done little to build domestic capacity. Without consistent demand and supply-side investment from the federal government, the slew of port fees will add little new maritime capacity. The pattern that emerges is one of both neglect and contradiction. The administration has launched offices only to defang them, promised investment only to undercut it, and pointed to growth opportunities only to foreclose them.  

Reviving shipbuilding is achievable. Other advanced economies have sustained competitive industries through predictable investment, robust workforce training, and long-term alignment with global demand trends. China, for example, leveraged decades of government support and industrial planning to become a shipbuilding powerhouse. Trump’s approach has offered the opposite. An industry vital to economic security and national defense lacks clear direction or reliable support. Trump’s declaration that America would soon build ships hasn’t led to action. Instead, his policies have made a revival less likely. 

The post Trump Promised a Shipbuilding Boom. He’s Sinking It Instead appeared first on Washington Monthly.

Donald Trump might change his mind from day to day about which tariffs he will apply to which imports from which countries, but, perhaps surprisingly, he has been very clear about one recent addition to his plan to restore American greatness: He wants to get us back in the shipbuilding business. 

During his March address to Congress, Trump intoned in classic Trumpian fashion, “We used to make so many ships. We don’t make them anymore very much, but we’re going to make them very fast, very soon.” Soon after the speech, Trump signed an executive order tasked the government with finding ways to rebuild America’s moribund shipbuilding industry, and Trump’s U.S. Trade Representative hit Chinese-built vessels with port fees. 

Unlike most of Trump’s other policy priorities, shipbuilding enjoys bipartisan support. Democrats and Republicans alike have applauded the president’s moves on the industry, and in the spring, lawmakers reintroduced major bipartisan legislation that would codify many of Trump’s shipbuilding plans.  

But can America build ships again? The shipbuilding industry is critical for U.S. economic and national security; ships carry the vast majority of U.S. international trade goods and 90 percent of U.S. military supplies. In the event of a war or major conflict, relying on foreign-built ships—or foreign-controlled shipping companies—would be a risky proposition. Yet, despite that fact, the United States produces a fraction of 1 percent of the world’s ships, virtually no U.S. commerce travels on American-built ships, and U.S. shipyards are notoriously plagued with delays and cost overruns. Any revival of the American shipbuilding industry will require a large-scale, comprehensive effort from government, industry, and labor. It will require coordination, innovation, and a national sense of urgency—the kind we haven’t seen in decades. 

So, in this critical moment of shipbuilding need, Doug Most’s new book, Launching Liberty, is a welcome reminder of the depth and breadth of the effort the United States undertook the last time it had a world-class shipbuilding program: the Liberty ship program during World War II. Most weaves together a wide range of voices involved in the program, from politicians and industrialists to welders and engineers. 

The narrative begins in September 1940, a little over a year after Adolf Hitler’s invasion of Poland. The British Royal Navy and Royal Air Force were sustaining heavy losses, and German U-boats were mercilessly sinking British merchant vessels, the ships that carried food, weapons, and supplies to British troops. Prime Minister Winston Churchill realized that without a marked increase in the construction of these vessels, Britain would lose the war, probably in a matter of weeks. To sustain their efforts, the British needed to build more ships—and fast. The problem was, as Most explains, British shipyards were already at capacity, and German U-boats were sinking ships faster than the British could build them. To help address the problem, the British sent a secret delegation to the United States, armed with rough sketches of a new type of merchant ship, to appeal for help from America’s shipbuilders. But after the British delegation arrived in America, they quickly realized that U.S. shipyards, atrophied by the Great Depression, were also at capacity. New shipyards would have to be built. The most important of these was sited in the sleepy Bay Area town of Richmond, California, and led by the American industrialist Henry J. Kaiser. Although Kaiser had no shipbuilding experience, he had extensive government contracting experience, including the construction of the Hoover and Grand Coulee Dams.  

Most also takes us into the mind of Franklin D. Roosevelt, who had the formative experience of serving as assistant secretary of the Navy during World War I. As Most explains, American shipbuilding capacity was so diminished during World War I that even though the United States undertook a massive emergency fleet construction program, many of the vessels were not ready until after the war was over. As a result, American soldiers in Europe were severely underequipped, forced to use British and French weapons and equipment.  

When World War II came around, FDR would not be caught flat-footed. Soon after Kaiser’s shipyard and another East Coast location finalized contracts with the British to build Ocean-class vessels, Roosevelt’s Maritime Commission launched the massive Liberty ship program. 

Most brings to life the flurry of activity that shipyards, designers, and component manufacturers undertook to begin rapid production of the vessels. Kaiser’s tract of land, a barren mudflat, was transformed into an active shipyard in a matter of months. Ship designers worked to Americanize the Ocean-class vessels. Because the Americans did not have as extensive a network of coaling stations as the British, the American Liberty ship would use oil. But more importantly, it would use welding instead of riveting, saving both man-hours and materials. Manufacturers of critical shipbuilding components, from engines to lifeboats, were given emergency contracts to increase production quickly. 

Unfortunately, the rapid mobilization proved insufficient. A few months after the launch of the Liberty program, the United States was drawn into the war by the attack on Pearl Harbor. FDR and the Maritime Commission knew that if production were not rapidly increased, German U-boats would cut off all supply lines from the United States, crippling Allied troops in Europe. They quickly ordered an exponential increase in production. But to speed up their efforts, the shipyards needed workers. 

Most’s storytelling from the perspective of shipyard workers is especially riveting. He reports both days of elation, including Liberty Fleet Day, on which the United States celebrated the launch of 16 merchant and naval vessels in shipyards across the country, and days of gloom, including the sinking of the USS Reuben James, the first naval ship taken down during the war. Through stories about Laura Fortier and Lewis Van Hook, “Okie” migrants to California from the Southwest, Most paints a well-rounded picture of the men and women who worked in the shipyards. He takes the reader into the streets of Richmond as tensions between native Californians and migrants flared, as public services, including hospitals and schools, overflowed, and as migrants struggled to find housing, with some forced to live in bedrooms leased from native Richmonders. 

As Most shows, migration alone could not single-handedly fulfill the demand for labor. Shipyards had to expand their pool to Black and women workers, to the anger of the predominantly white, male workforce. Most explains the attempts to recruit and integrate the new, more diverse workforce in shipyards across the country. 

In his attempt to portray comity within the ranks at the shipyards, Most occasionally papers over dissension and discrimination, particularly in the case of Black laborers facing racial discrimination from both shipyards and labor unions. Nonetheless, he deftly describes shipyards’ paternalistic attitude toward women and the efforts to change those attitudes through symbols like Rosie the Riveter and Wendy the Welder and through the federal government’s subtle nudges.  

As Most reports, a key feature of the Liberty ship program was the rapid speed of construction, which was critical to ensuring sufficient tonnage on the seas. At the beginning of the Emergency Shipbuilding Program, the average time needed to construct a Liberty ship was 241 days. Just two years later, the average construction time had fallen to a mere 42 days. The construction of the SS Robert E. Peary, which serves as the climax of the book, took just 4 days, 19 hours, and 52 minutes. 

How was it assembled that quickly? Most explains the shipyards’ improvement in speed, correctly attributing it, in large part, to assembly line–style production and prefabrication methods. The techniques were created when Kaiser dispatched his right-hand man, Clay Bedford, to observe Henry Ford’s automobile assembly line in Detroit and figure out how to apply those principles to shipbuilding. After observing how the sub-assembly of the Ford chassis was finished before it was joined to the body, Bedford devised the idea of pre-assembling the ship’s deckhouse before welding it onto the ship’s deck. It was the right call. By pre-assembling the deckhouse—a three-story building on the ship that contained the staterooms, kitchen, lounge, and hospital—shipyards saved hundreds of hours of labor. 

But while Most’s version of events is compelling, he frequently understates the importance of the government’s involvement in the Liberty program. For example, he only briefly mentions the groundwork for prefabrication that the Maritime Commission laid during World War I. The shipyard in Hog Island, Pennsylvania, for instance, pioneered many of the prefabrication techniques—at the behest of the Maritime Commission—that Kaiser’s shipyards would adopt during World War II. It wasn’t simply the genius of industrialists that contributed to the speed of production; government-led innovation was crucial.  

Most is also eager to credit “titans of commerce” such as William Francis Gibbs, a renowned ship designer, for the speed of the shipbuilding program. But he has very little to say about the Maritime Commission bureaucrats who did the painstaking work of designing a ship that could be quickly produced in unique American shipyards. The impetus for welding instead of riveting and using one centralized deckhouse instead of two smaller deckhouses, for example, came from the commission. Over the course of the war, these innovations allowed for extensive prefabrication and sub-assembly, cutting the time required for assembly by nearly three-quarters. Rather than giving it the credit it deserves, Most describes the Maritime Commission team working with Gibbs as “bickering and micromanaging.” 

Most also radically understates the commission’s role in housing and transporting workers. He discusses a government grant Kaiser received to build housing for his shipyard workers in Portland, but says nothing about the large-scale Maritime Commission collaboration with the National Housing Agency to build more than 135,000 units of affordable housing for shipyard workers. Similarly, Most doesn’t mention the commission’s role in expanding and creating new rail lines, ferry services, and bus services so shipyard workers could commute to work. Without a comprehensive government support program, the shipyards likely would have failed. 

Perhaps most glaringly, Most gives short shrift to the centralized materials and parts management system deployed by the commission. A single Liberty ship contained over 250,000 parts produced in more than 800 factories in 32 states. Organizing the flow of these components to ensure that each shipyard received just enough parts to maximize its production was a monumental undertaking. Although occasional component shortages limited the rate of production, on balance, the Maritime Commission’s management role was key to the program’s success. 

Ultimately, Launching Liberty is a lively and accessible account of one of the most ambitious industrial mobilizations in American history, and it succeeds in capturing the drama, pace, and human grit behind the Liberty ship program. But by placing the industrialists at center stage while minimizing the government’s role, Most risks leaving readers with a skewed understanding of how the United States built a world-class shipbuilding system, and how it might do so again. If the past can teach us anything, it is that revitalizing industry will require an approach far more comprehensive than Trump’s haphazard program of tariffs and port fees. It will demand the kind of sustained public investment, centralized coordination, and logistical mastery that the Maritime Commission achieved during World War II. Without recognizing that truth, any modern effort to “make ships very fast, very soon” will likely prove as shaky as a ship without a rudder. 

The post Can America Build Ships Again? appeared first on Washington Monthly.

In July, Union Pacific (UP), the largest railroad by revenue in the United States, announced plans to acquire Norfolk Southern (NS), the country’s fourth largest railroad. With UP’s dominance west of the Mississippi River and NS’s dominance to the east, the combined $250 billion railroad would create the first coast-to-coast railroad company and leave America’s already consolidated rail system even more concentrated. 

Freight railroads are the backbone of the United States economy. They move the inputs and outputs of nearly every industry: grain, coal, steel, lumber, chemical, and finished goods like automobiles. A functional, competitive freight rail system is necessary if the United States wants to reshore manufacturing or build a green economy. 

At first glance, a freight railroad that spans the United States might appear to bring significant efficiencies—faster transit times and more efficient routing because traffic would not need to be interchanged between the railroads. However, experience shows that mergers often result in chaos instead of coordination. The 2023 combination of Canadian Pacific and Kansas City Southern, the first large railroad merger in more than two decades, quickly ran into trouble, causing delays, service failures, and growing frustration among shippers. When Union Pacific acquired Southern Pacific and CSX and NS absorbed Conrail in the 1990s, the combined companies attempted to “rationalize” their systems, creating nationwide service meltdowns so severe that regulators were forced to impose a 15-month merger moratorium. 

Rather than streamline freight services, these mega-mergers tend to break systems and concentrate power.  

For most of the 20^th century, the American rail system operated under a very different model rooted in public accountability, regional balance, and cooperation, not consolidation. The Interstate Commerce Act of 1887 and subsequent legislation subjected railroads to strict federal oversight, including uniform pricing, service obligations to rural communities, and “common carriage” responsibilities that required them to serve all customers fairly. Railroads could not play favorites, abandon lines at will, or set arbitrary rates based on market leverage. The system was far from perfect, but it helped ensure that rural and urban communities could access reliable freight and passenger service, even if they weren’t along the most profitable corridors.  

This regulatory framework also encouraged operational creativity. During this period, a consortium of regional carriers that went by their acronyms, including the W&LE, the P&WV, and the NYNH&H, cooperated to form the “Alphabet Route,” an informal alliance that provided long-haul service across multiple jurisdictions—without consolidation. They proved that collaboration, not monopoly—through standardized tariffs, car interchange agreements, and coordinated schedules—could meet national freight needs.  

After the Staggers Act of 1980 largely discarded this regulatory regime, the industry rapidly consolidated. In 1980, the United States had 33 Class I railroads. Today, there are six. The biggest lines ripped up tracks, closed yards, and stopped serving regions. By consolidating, railroads began exerting monopoly pricing over shippers; shippers were effectively told to take or leave it. 

Then came the financiers.  

With barriers to competition high and oversight minimal, Wall Street moved in. Hedge funds took control of every major U.S. freight railroad except one. Their mission wasn’t to grow the rail business but to extract as much cash as possible, as fast as possible. The preferred tool for this was “Precision Scheduled Railroading” (PSR), a euphemism for asset liquidation and severe job cuts. Under PSR, railroads laid off workers, parked locomotives, and “rationalized” operations to focus only on the most profitable long-haul freight. Customers with more complex needs, especially those in rural areas or those moving lower-margin commodities, were abandoned. 

Since 2014, the Class I railroads have cut nearly a third of their workforce. In theory, PSR was about efficiency. In practice, it gutted the system’s ability to handle real-world logistics. The biggest railroads have experienced 13 major operational meltdowns in the past decade. Disruptions deteriorated service quality, rates rose, and many shippers decided to move to trucks. 

That shift carries immense costs. Trucks are far less efficient than trains, emitting more carbon, causing more accidents, and inflicting more wear and tear on public infrastructure. Yet railroads have done little to win that business back. Instead of investing in expanded capacity or better service, they’ve used their profits for stock buybacks and dividends. Between 2010 and 2021, the rail industry spent nearly $50 billion more on rewarding shareholders than on maintaining its network.  

Union Pacific is emblematic. In 2021, it spent $4 billion more on buybacks and dividends than it had available from free cash flow, even as it racked up $100 million in deferred maintenance. Technologies like positive train control, a system designed to prevent crashes and derailments,  long touted as game-changers for safety and reliability, were only implemented under heavy regulatory pressure. The industry has repeatedly chosen extraction over investment, and financial engineering over operational excellence. Despite making the systems brittle and ripe for financialization, mergers rarely deliver the efficiencies they promise. Since 2004, railroad stocks have soared nearly four times as much as the S&P, all while the railroads have lost 10 percent of their business. 

Despite that record, the Union Pacific-Norfolk Southern deal may still win federal approval. The Surface Transportation Board has the sole authority to approve or reject rail mergers and is currently split 2-2 between Democratic and Republican appointees, with one seat vacant. Crucially, the terms of two board members—Democrat Karen Hedlund and Republican Michelle Schultz—will expire during the lengthy review process. That opens the door to a Trumpian shift in the board’s balance.  

Trump has shown that consolidation does not bother him as long as the checks clear. If Trump faces any Republican opposition to his yet unannounced STB nominee, there’s every reason to believe Trump could fire the Democratic board members and replace them with industry loyalists eager to rubber-stamp the merger.  

The review process will likely be long, technical, and riddled with opportunities for corporate influence. Even under the Board’s current composition—split between Democrats and Republicans—a merger of this scale could gain approval. The Surface Transportation Board’s recent track record offers little reassurance. An STB with a Democratic majority voted to approve the Canadian Pacific-Kansas City Southern merger despite significant reservations from labor unions and shippers. 

This merger will be the first to be reviewed under the Board’s more-stringent 2001 merger guidelines, which require any transaction to enhance competition and avoid downstream consolidation, which is critical, as all signs point to a second shoe dropping. If the Union-Pacific-Norfolk-Southern merger is approved, BNSF, the other western railroad—owned by Warren Buffett’s Berkshire Hathaway—will almost certainly pursue CSX, the other eastern railroad, to avoid being boxed out. The result, a national duopolistic rail system, was precisely the downstream effect the STB’s 2001 merger guidelines were designed to prevent.  

It would also be historically perverse.  

In 1904, President Theodore Roosevelt broke up the Northern Securities Company, a J.P. Morgan-backed trust that aimed to consolidate control of the western railroads. The Supreme Court sided with Roosevelt, ruling that such consolidation violated the Sherman Antitrust Act. The lessons were not learned, however. Through a series of mergers in the mid-20^th century, several pieces of the broken-up railroad would be reconstituted into a significantly larger entity that would eventually create BNSF. The current merger proposals, if approved, would be multiple orders of magnitude larger and more impactful than the monopoly created by Northern Securities. 

If the United States is serious about reshoring manufacturing, it cannot afford to let its rail system become a duopoly. Allowing Union Pacific to absorb Norfolk Southern would leave just two national carriers, each with incalculable leverage over customers, workers, and regulators. 

The post Railroad Merger: Why It Could Go Off the Rails  appeared first on Washington Monthly.

On April 9, President Donald Trump used his Sharpie to sign an executive order titled Maintaining Acceptable Water Pressure in Showerheads. But while Trump’s shower order was showered with headlines, the commander-in-chief signed another water-related directive of greater import during the same ceremony. Trump directed his administration to find ways to save American shipbuilding by rebuilding the nation’s nearly defunct maritime industry. This order may have been inadequate to the problem, but at least it addressed an issue of serious bipartisan concern.  

America relies on ocean shipping to transport nearly 80 percent of its international trade. Yet so few large U.S. shipyards remain that they produce only about 0.04 percent of the world’s oceangoing commercial vessels. Meanwhile, nearly 99 percent of our exports and imports are carried by foreign-owned shipping companies—almost all of them operating as cartels. Some of the dangers of this dependency became evident during the pandemic, when U.S. reliance on foreign shipping cartels led to deep supply chain disruptions while fueling inflation. Since then, the United States has continued to cede maritime dominance to China, which controls over half of global shipbuilding capacity and the world’s fourth-largest ocean carrier, COSCO Shipping.

The effects of shrinking commercial shipping and shipbuilding capacity on U.S. military logistics are equally frightening. The United States no longer has sufficient sailors or ships to move military supplies. Nearly 90 percent of our military equipment travels by ship, yet a 2019 test activation of sealift ships showed a little more than a third met their mission capability, due to their age and wear. Consequently, as the Washington Monthly previously reported, “it would require more than 40 days for a brigade to unload equipment, get organized, and move to the front.”  

This decline in military readiness is closely related to the deterioration of commercial shipbuilding, as the loss of domestic shipyards leaves the U.S. without the facilities and skilled workers to build and repair naval ships and support vessels efficiently.  

How did we get here? For decades, a bipartisan chorus has blamed the decline of the U.S. maritime sector on a 105-year-old law, the Jones Act. Invoked in various policy debates, the legislation is purportedly an egregious example of government overregulation. Colin Grabow, a policy analyst with the libertarian Cato Institute, for example, tweeted about the Jones Act nearly 1,000 times in just a three-month span in 2020, blaming it for a slew of problems ranging from auto traffic congestion in the Northeast to high gas prices. Senator Mike Lee, the Utah Republican, has blasted the act, saying, “What could be more fitting than a dumpster fire full of manure and flames to represent the Jones Act?” 

And it’s not only self-styled market libertarians who have attempted to turn the Jones Act into a symbol of industrial policy gone amok. Many who hold themselves out as “Abundance Liberals” have criticized it. Matthew Yglesias, for example, published a broadside against the act during his tenure at Vox, calling it “protectionism and exploitation at its worst.” Derek Thompson, the co-author of Abundance, has also voiced his opposition to the legislation. There is no greater example of the received wisdom of the neo-liberal consensus than its denunciations of the Jones Act.  

What is supposedly so bad about it? Most of its original provisions, it turns out, have long been watered down or repealed, along with the once extensive regulation that governed the markets for shipping and shipbuilding. But a vestigial Jones Act still requires all vessels transporting cargo between two American ports to be U.S.-flagged, U.S.-built, U.S.-owned, and mostly U.S.-crewed. These regulations, critics charge, have destroyed America’s maritime sector by protecting domestic shipbuilders and carriers from foreign competition, thereby causing them to become inefficient and uncompetitive.  

With the benefit of hindsight, however, it’s now easy to show that it was not excessive regulation, but excessive deregulation combined with a retreat from public investment that destroyed America’s maritime sector, leaving us dangerously exposed to mounting military and economic threats.  

For decades before the outbreak of World War I, countries such as Great Britain subsidized their ship construction and operations, while the United States relied on laissez-faire. This caused U.S. shipbuilders to lose the technological edge they had enjoyed during the clipper ship era and hemorrhage market share to foreign competitors. By the turn of the century, U.S.-built vessels carried a mere eight percent of the country’s international trade. U.S.-owned shipping lines also went into steep decline.  

The United States was thus left highly vulnerable once the Great War began. In 1914, Great Britain, France, and Italy diverted most of their shipping capacity to support their own war effort. The United States did not have enough tonnage to replace the withdrawn tonnage; Germany, Austria, France, and Russia’s withdrawals alone were close to seven times the tonnage of the entire international-trading U.S. fleet in 1914. This stranded U.S. shippers. The carriers that remained in the trade inflated prices significantly, increasing the cost to ship goods such as cotton by 17 times. 

During the war, the U.S. government took drastic measures to increase the country’s shipbuilding capacity. For example, it requisitioned any German ships that happened to be in U.S. harbors. More significantly, Congress also passed the Shipping Act of 1916, which tasked the U.S. Shipping Board with regulating ocean shipping as a public utility and created the Emergency Fleet Corporation to create a massive shipbuilding and mobilization program.  

The results were impressive. Thanks to massive direct government investment, the U.S. broke free of years of technological stagnation in shipbuilding by creating standardized, replicable designs for steel vessels that used oil instead of coal to generate more cargo space and reduce dependence on British coaling stations. The U.S. also developed the pre-fabrication techniques that allowed large cargo ships to be built in a matter of days. As a result of these government interventions, the U.S. built more than 2,300 vessels for the war effort.  

After the war, lawmakers wanted to ensure that the United States would never again become so dangerously dependent on foreign shipping. Foreign governments, meanwhile, learned the same lesson from World War I and could, therefore, be counted on to regulate and subsidize their own marine sectors directly.  

In that context, Congress passed the Jones Act in 1920, a 37-section law that, among other provisions, codified seamen’s rights, authorized low-cost shipping loans, and granted preferential railroad rates to cargo carried by American ships. Critically, it also tasked the Shipping Board with identifying steamship routes critical to U.S. national interests. It also tasked the Board with selling cargo vessels built during the war to private carriers to operate on those routes. In cases where private carriers were unwilling to operate vessels on those routes, the Board was authorized to run the line itself. To ensure that subsidized foreign carriers did not drive U.S.-flag carriers out of the domestic fleet, Section 27 of the law reinstated so-called cabotage restrictions. Initially put in place by the 1817 Navigation Act (and briefly waived during World War I), these required ships moving cargo between U.S. points to be U.S.-built, U.S.-flagged, U.S.-owned, and U.S.-crewed. 

Combined with the rate regulation created by the Shipping Act of 1916 and later, the Merchant Marine Act of 1936, the systems-based approach of the Jones Act successfully built up the U.S. maritime sector into world dominance. The Shipping Board established, operated, and sold multiple ocean liner routes in international trade. By the end of the Second World War, the United States controlled 60 percent of the world’s tonnage and transported 63 percent of the world’s goods. It was the largest fleet in world history. 

Over the years, however, critical parts of the Jones Act and other related maritime policies have been steadily chipped away or undermined. In 1946, for example, Congress passed the Merchant Ship Sales Act, which sold vessels that the United States constructed at below-market rates to allies and former enemies, significantly reducing demand at U.S. shipyards, leading to many mergers and closures. The United States also encouraged ship owners to pursue “flags of convenience,” where they could dodge U.S. labor and tax laws by registering their vessels in countries such as Panama and Liberia, shrinking the U.S. international fleet.  

But the real death knell came during Ronald Reagan’s administration, when the U.S. government stopped providing subsidies for constructing and operating U.S.-flagged vessels and deregulated international ocean shipping markets. This change in policy, along with an abandonment of antitrust enforcement, led to mass consolidation and a severe reduction of shipping and shipbuilding capacity, as orders for vessels shifted to the heavily subsidized shipyards of East Asia. U.S. ocean carriers were also swallowed up by foreign competitors due to neoliberal policies, further shrinking U.S. shipping capacity. 

Unlike what critics contend, it was not the vestigial cabotage restrictions of the Jones Act that shrank the U.S. merchant fleet. Rather, it’s abandoning its core provisions, along with other adjacent polices, in favor of a deregulatory, “free-market” approach. To be sure, American shipyards are less productive, have higher capital costs, and are less efficient than their foreign counterparts, but that is the result of abandoning market regulation and public investment. Much of the innovation in shipbuilding, from the transition from coal to oil to the use of welding over riveting to the growth of containerization, resulted from government design and execution.  

Fully repealing the Jones Act would likely result in outsourcing any last vestiges of U.S. shipping and shipbuilding capacity rather than incentivizing competition and increasing shipping. Take, for example, India, which liberalized cabotage restrictions in 2018 to grow its shipping industry. Its Directorate General of Shipping recently noted that after liberalization, “Indian container shipping entered a phase of stagnation and decline.” In response, the Indian government recently proposed returning to more restrictive cabotage regulations to arrest the decline.  

Today’s vestigial Jones Act does create fundamental inequities for a few places, most notably Puerto Rico. Because the Jones Act’s cabotage restrictions force them to rely on high-priced U.S. ships and crews to trade with the mainland, the people of Puerto Rico effectively cross-subsidize the cost of maintaining what remains of our merchant marine and domestic shipbuilding industry. But the solution to that inequity is not to repeal what remains of the Jones Act, but rather to expand it so that it once again achieves a vital national interest and shares the burden of achieving that end equitably to save American shipbuilding.  

Legislation should require an increasing percentage of all U.S. imports and exports to travel on U.S.-built, U.S.-flagged vessels. These policies should be paired with smartly targeted tariffs and subsidies to counter China’s robust maritime industrial policy. Capacity at the Maritime Administration should be drastically increased to develop new, standardized ship designs powered by green technologies. Government shipyards should be created so the United States can start building at scale. Antitrust enforcement should prevent the consolidation of shipbuilding capacity, and the defense industrial base more broadly, in the hands of a few corporations.  

Rebuilding America’s maritime strength will not happen by accident. It requires bold, coordinated policy that learns from history, reinvests in innovation, and recognizes that maritime strength cannot be achieved through laissez-faire. If the United States embarks on a dedicated effort to establish a suite of policies that combines public investment with regulation of the shipping and shipbuilding sectors, it would be well on the path to achieving true maritime abundance. 

The post How to Fix Our Dangerous Dependency on Foreign Ships and Save American Shipbuilding appeared first on Washington Monthly.

In early March, Elon Musk called Amtrak, the U.S. intercity passenger rail service, an “embarrassment” and suggested privatizing it. Soon after, the Trump administration forced Stephen Gardner, Amtrak’s CEO, to resign. In his comments, Musk—America’s “efficiency” czar—made clear he believes Amtrak’s sometimes poor service proves its inherent inefficiency as a government entity. 

But upon closer inspection, a more powerful explanation for Amtrak’s struggles emerges. Once again, we find a story of corporate monopoly and financialization, and in many cases, the corporate power problems are exacerbated by political sabotage. 

There is little debate that Amtrak is struggling. Recently, a train originating in Chicago arrived in Fort Worth, Texas, nearly 18 hours late, and was canceled the rest of the way to San Antonio. Similarly, Amtrak’s rollout of new, higher-speed trains to be used on the Northeast Corridor between Washington, D.C., and Boston has been delayed nearly four years. There is also little debate about the latent, unfulfilled demand for a good American passenger rail service in the Northeast and across America. Record ridership on Amtrak and frequently sold-out trains between cities such as Charlottesville, Virginia, and Atlanta prove this point. 

To understand Amtrak’s struggles, it helps to view Amtrak as two systems: the national system, where Amtrak leases space from freight railroads, and the Northeast Corridor, where Amtrak runs trains on tracks it owns. In the national system, the primary problem is that Amtrak runs mostly on tracks owned by private, monopolistic freight rail corporations controlled by hedge funds intent on maximizing short-term profits at the expense of service standards. 

Amtrak’s Crescent service, which runs daily between New York and New Orleans, provides a case in point. With more reliable, more frequent service, the passenger service along this route could easily divert far greater amounts of high-emission auto and airplane travel between cities such as Charlotte, North Carolina, and Atlanta. It could also attract far greater volumes of overnight sleeper-car service between cities like Atlanta and Washington D.C.—a form of not-so-high-speed rail service currently enjoying a renaissance in Europe. 

Unfortunately, the Crescent is so frequently delayed that it attracts only negligible market share. Though they are required by law to give Amtrak trains priority over their trains, freight railroads routinely do the opposite with impunity to boost their profits and please Wall Street. In the case of the Crescent, the host railroad is Norfolk Southern, which routinely makes it and other Amtrak trains on its tracks pull over on sidings and wait for hours as freight trains pass. 

Making matters worse, Norfolk Southern, like other freight railroads, has taken huge cost-cutting measures in recent years to boost its short-term profits further. This, in turn, causes its freight trains to break down more frequently and block Amtrak trains. In 2023, only 24 percent of southbound Crescent trains arrived within 30 minutes of their scheduled arrival time due mainly to delays caused by crew shortages or overlong, broken-down Norfolk Southern freight trains. 

Even in the Northeast Corridor, where Amtrak owns its tracks and runs a profitable and substantially more reliable service, efforts to bring the service on par with peer nations have been stymied by corporate monopolies and hostility from Republican lawmakers. 

Take, for example, Amtrak’s efforts to improve its money-making Acela service between Washington, D.C., and Boston. Amtrak had only a handful of suppliers to choose from when seeking next-generation trainsets to recapitalize an aging fleet, bring higher-speed service to the corridor, and improve the service. In 2016, Amtrak chose Alstom, a French locomotive manufacturing giant that controls nearly 50 percent of the global market share of high-speed trains. 

When Alstom failed to develop a computer model to meet safety testing requirements, it strong-armed Amtrak into letting it begin serial production of the trainsets anyway. Though Amtrak promises to put the trainsets into service sometime this Spring, as of this writing, they are still idled in a yard in Philadelphia due to unresolved design defects that could have been avoided if Alstom had not flexed its market power. 

Republican lawmakers have compounded Amtrak’s problems by blocking efforts to improve infrastructure, especially on the aging Northeast Corridor. For example, in 2010, New Jersey Governor Chris Christie killed efforts to construct a new tunnel to alleviate congestion at a critical chokepoint on the Northeast Corridor. The result has been crumbling infrastructure and unnecessary, avoidable delays.  

President Trump has been similarly hostile to Amtrak. In 2017, Trump proposed ending all federal support for long-distance Amtrak routes, which are critical transportation links for rural communities. In his first term, Trump also held up funding for constructing new tunnels under the Hudson River to fix the critical chokepoint on the Northeast Corridor. The ouster of Amtrak’s CEO signals that Trump is poised to take a familiar, hostile stance toward Amtrak. 

Can Amtrak survive such challenges? Last summer, the U.S. Department of Justice charged Norfolk Southern with violating federal law by routinely delaying the Crescent. If the DOJ continues prosecuting the case under the Trump administration and prevails in court, that could bring serious relief for passengers throughout the Amtrak network. This assumes, however, that the Trump administration doesn’t first defund the system because rail passenger service in the United States is inherently “inefficient.” 

The post Elon Musk Wants to Privatize Amtrak, But the Real Problem Is Freight Monopolies appeared first on Washington Monthly.