International Partnerships to Advance U.S. Shipbuilding Capabilities - Chapter 1: Commercial Shipbuilding Partnerships

Overview: The U.S. commercial shipbuilding industry has declined in global market share, while allies like South Korea, Japan, and certain European nations excel in building commercial vessels. Partnering with these countries can help revive U.S. shipbuilding by leveraging their efficient production methods, advanced designs, and capital investments. China currently dominates commercial ship production, but strategic and security concerns make U.S. collaboration with China unviable. Instead, the U.S. is turning to allied nations with strong shipbuilding sectors to boost capacity and competitiveness . Below we analyze key countries suited for commercial shipbuilding partnerships with the U.S., recent joint ventures and M&A activity, and how such collaborations offer mutual benefits.

South Korea: Global Shipbuilding Leader and U.S. Collaborator

South Korea is one of the world’s top shipbuilders, known for its massive yards and efficient construction of tankers, container ships, and LNG carriers. South Korean firms like Hyundai Heavy Industries (HHI), Daewoo Shipbuilding & Marine Engineering (DSME, now Hanwha Ocean), and Samsung Heavy Industries account for a large share of global commercial ship orders . South Korea’s leadership in advanced ship design and production makes it a prime partner for the U.S. commercial sector:

• Technology Transfer: U.S. yards have already benefited from Korean design expertise. For example, General Dynamics NASSCO in San Diego partnered with DSME’s subsidiary DSEC to use a South Korean “ECO” tanker design for building five environmentally efficient product tankers for the Jones Act trade . This allowed an American yard to deliver modern, fuel-efficient ships domestically by leveraging Korean engineering.

• Joint Ventures and Investment: Korean companies are actively investing in U.S. shipbuilding. In 2024, Hanwha Group (which had acquired DSME and rebranded it Hanwha Ocean) announced a $100M acquisition of Philly Shipyard in Philadelphia . Philly Shipyard (formerly Aker Philadelphia) has built about half of all large U.S. commercial Jones Act ships since 2000 . Hanwha’s takeover brings cutting-edge Korean shipbuilding know-how and capital into a U.S. yard, aiming to modernize facilities and deploy advanced naval systems in the U.S. market .

• Market Access and Scale: By partnering with South Korean builders, U.S. shipowners gain access to large-scale production capacity and cost efficiencies. South Korean yards can build complex commercial vessels quickly and at lower cost due to automation and experience. Collaboration (through licensed designs or co-production) helps U.S. operators acquire high-quality ships without solely relying on foreign deliveries, while keeping some construction work and know-how on U.S. soil.

Mutual Benefit: U.S. shipbuilders stand to gain from South Korea’s advanced production techniques (modular construction, robotics, digital shipyard tools), which can improve costs and delivery times . South Korea, in turn, benefits by expanding its global footprint and securing a role in the U.S. market (especially for Jones Act and military-support vessels). Both nations also strengthen supply chain resilience and reduce reliance on Chinese shipyards by working together. As one Korean executive noted during a 2025 U.S.-Korea shipbuilding agreement, cooperation between these “blood allies” will boost both countries’ shipbuilding industries and contribute to stronger security ties .

Japan: High-Tech Shipbuilding and Trusted Trade Partner

Japan historically led the world in shipbuilding (especially from the 1960s–1980s) and, while its global ranking has since been overtaken by South Korea and China, it still possesses a robust commercial shipbuilding industry. Major Japanese shipbuilders include Mitsubishi Heavy Industries, Imabari Shipbuilding, Japan Marine United (JMU), and Oshima Shipbuilding, among others. Japan specializes in high-value vessel types such as LNG carriers, chemical tankers, and specialty ships, and is known for quality workmanship and technological innovation (e.g. advanced welding automation and digital design):

• Historical Ties: The U.S. and Japan have a long-standing trade and defense relationship. While post-WWII Japan rebuilt its shipbuilding with minimal U.S. direct involvement, today the two nations’ industries are aligned as friendly competitors and potential collaborators. Japanese shipyards frequently build vessels for U.S. shipowners and operators – for instance, Japanese yards have constructed LNG carriers that transport U.S. LNG exports (though these ships are not U.S.-flagged). This commercial linkage indicates trust and complementary interests in maritime trade.

• Consolidation and Modernization: Facing fierce competition, Japanese yards have been consolidating and modernizing. In 2021, Imabari Shipbuilding and JMU formed a joint venture “Nihon Shipyard” to pool resources for designing and marketing new ships . This creates a stronger Japanese entity better able to compete globally. Such moves can also benefit the U.S. – a more efficient Japanese industry could partner with U.S. firms on design collaboration or licensing. For example, a U.S. yard could license a proven Japanese ship design (such as an LNG carrier or bulker blueprint) and build it domestically under a technology transfer agreement, marrying Japanese design quality with U.S. labor and oversight.

• Advanced Technology: Japan is a leader in industrial robotics and is applying this to shipbuilding. Japanese shipyards are exploring digital twin technology and automated welding to improve efficiency . A partnership could involve Japanese experts assisting U.S. shipyards in implementing automation or training workers on advanced robotic welding systems, which would modernize U.S. yard capabilities. Given the close U.S.-Japan strategic alliance, sharing of commercial shipbuilding technology is politically feasible.

• Market and Standards Compatibility: Both the U.S. and Japan emphasize high safety and environmental standards (e.g. LNG-ready designs, ballast water treatment). Ships built by Japanese yards already meet stringent international standards compatible with U.S. regulations. This means any collaborative projects (like co-developing a next-generation green ship) would align well with regulatory expectations in both countries. Japanese shipbuilders also have experience in meeting U.S. Coast Guard certification for vessels they export to U.S. operators, indicating a baseline compatibility in practices.

Mutual Benefit: A U.S.-Japan shipbuilding partnership would be mutually advantageous. The U.S. would gain from Japan’s precision and innovative approaches (for example, Japanese yards’ famed lean production techniques and use of robotic hull welders to address labor shortages ). Japan’s industry, in turn, could benefit from increased orders and joint projects with U.S. firms, helping keep its order books filled as global demand fluctuates. Closer industrial ties would also complement the broader U.S.-Japan alliance, reinforcing supply chains for critical maritime assets. In essence, Japan offers a combination of technological advancement and reliability as a U.S. partner in commercial ship construction.

Italy and European Allies: Niche Shipbuilders and Transatlantic Ventures

Several European countries, though smaller in output than Asian giants, have world-class shipbuilding niches and a history of transatlantic collaboration. Notably, Italy, Norway, and the Netherlands stand out as partners who have already engaged with U.S. shipyards or owners. These partnerships often involve mergers, joint ventures, or design licensing in both commercial and auxiliary shipbuilding:

• Italy (Fincantieri): Italy’s Fincantieri S.p.A. is one of the western world’s largest shipbuilders, renowned for building cruise ships, ferries, and naval vessels. Fincantieri made a significant move into the U.S. market by acquiring the Manitowoc Marine Group (MMG) in 2008, which included major mid-tier U.S. shipyards such as Marinette Marine in Wisconsin and Bay Shipbuilding in Wisconsin . This acquisition was encouraged by the U.S. Navy to infuse best practices from abroad; Fincantieri brought its modern ship design and construction methods to upgrade these yards . While Fincantieri’s U.S. yards have been used primarily for military contracts (discussed in the next section), the Italian firm’s commercial expertise (e.g. serial production of cruise liners) has also influenced operations. For instance, Fincantieri has invested in facility modernization and workforce training at Marinette, improving efficiency for all projects . The mutual benefit is clear: U.S. shipyards gain European technical know-how and project management discipline, and Fincantieri gains a foothold in the U.S. market and access to U.S. government and commercial contracts. Another area of commercial cooperation is in the luxury cruise and ferry market – U.S.-based cruise lines regularly purchase vessels from Fincantieri’s Italian yards, underpinning a longstanding customer-supplier partnership that could evolve into design collaboration or U.S. on-site support.

• Norway (Aker and Kongsberg): Norway’s influence on U.S. shipbuilding comes via both commercial investment and high-tech marine systems. Aker ASA, a Norwegian industrial group, was the majority owner of Philly Shipyard for decades and guided its construction of numerous Jones Act commercial ships (tankers, container ships) for U.S. operators . This Norwegian stewardship helped transfer Scandinavian shipbuilding practices to an American yard. Although Aker has sold its stake to Hanwha (Korea) in 2024, the legacy of Norway’s partnership remains in Philly Shipyard’s modernized facilities and its continuing construction programs (such as the new National Security Multi-Mission Vessels for U.S. maritime academies). Additionally, Norway’s maritime technology firms (like Kongsberg) partner with U.S. companies to provide advanced ship systems – for example, Kongsberg’s marine propulsion and control solutions are used in many vessels worldwide, and their U.S. subsidiary supports American shipbuilders in integrating these systems. This technology exchange ensures U.S. builders have access to state-of-the-art European marine equipment (engines, automation, navigation), enhancing the capabilities of U.S.-built commercial ships.

• Netherlands (Damen) and Others: The Dutch shipbuilder Damen has a broad portfolio of commercial and coast guard vessels and has teamed with U.S. yards on designs. A notable case was the U.S. Coast Guard’s Offshore Patrol Cutter program, where one competitor, Bollinger Shipyards, based its proposal on a Damen offshore patrol vessel design . While that particular contract went to a different team, it highlights a model of cooperation: European design adapted for U.S. construction. Such design partnerships can be replicated in commercial sectors (e.g. a proven Dutch dredger or cargo ship design could be licensed to a U.S. yard for local production). Other European nations like Finland and Germany excel in specialized ships (icebreakers, research vessels, cruise ships) and use highly digitalized production techniques. These countries are NATO-aligned or U.S.-friendly, making them suitable knowledge partners. For instance, Finnish and German yards build the world’s largest cruise ships using modular construction and computer-aided manufacturing; exchanging knowledge with U.S. shipyards (which may build future large passenger vessels or complex auxiliaries) would be mutually beneficial.

Compatibility and Mutual Benefit: U.S. partnerships with European shipbuilders are facilitated by shared regulatory standards (e.g. IMO safety rules, environmental norms) and the trust that comes from allied relations. Many European shipyards have experience working with American classification societies and clients, smoothing collaboration. The U.S. gains access to niche expertise (such as Italy’s cruise ship modular outfitting or Norway’s offshore vessel design for energy markets), helping diversify and advance U.S. shipbuilding capabilities. In return, European builders gain strategic partnerships in a huge market and often direct investment or contracts. For example, after Fincantieri’s investment, its U.S. subsidiary won lucrative U.S. Navy work, and Philly Shipyard under Aker and now Hanwha secured multi-ship contracts from MARAD – outcomes that ensure jobs and revenue on both sides of the Atlantic. Such partnerships create a win-win: they enhance U.S. shipyard productivity while giving allies economic opportunities, all under the umbrella of friendly nations working together.

Recent Examples of U.S.-Allied Commercial Shipbuilding Collaboration (Summary)

• NASSCO & South Korea’s DSME: U.S. shipbuilder NASSCO constructed five ECO-class tankers using a design from DSME’s DSEC unit, achieving 33% increased fuel efficiency via Korean technology .

• Fincantieri & Marinette (Italy–U.S.): Italy’s Fincantieri acquired Wisconsin shipyards in 2009, modernizing them and later building ships for the U.S. Navy – bringing Italian best practices stateside .

• Philly Shipyard & Aker/Hanwha (Norway–Korea–U.S.): A Norwegian-controlled U.S. yard (Philly Shipyard) built dozens of Jones Act ships; in 2024 South Korea’s Hanwha purchased it, aiming to deploy advanced Korean shipbuilding techniques in the U.S. .

• Design Licensing (Netherlands–U.S.): U.S. shipyards have teamed with Dutch designer Damen to propose new cutter designs , illustrating the model of using allied design expertise for U.S.-built vessels.

These examples underscore how leveraging allied countries’ strengths – whether through direct investment, joint ventures, or design collaboration – is revitalizing U.S. commercial shipbuilding. By partnering with nations like South Korea, Japan, Italy, and others, the U.S. can advance its shipbuilding capabilities, create jobs at home, and ensure a more secure and self-sufficient maritime industry for the future.