Report reveals US Maritime Administration has no "measurable goals" for assessing shipbuilding activities
Although the US Maritime Administration (MARAD) has four financial assistance programs to help address the decline of commercial shipbuilding in the US, it is not clear if these programs are meeting the needs of the industry or national security, according to a report published by the Government Accountability Office (GAO).
GAO said that MARAD has not established, "measurable goals, such as the number of ships built because of a program," and that assessment of the programs' performance is not possible without such goals.
What GAO found
Under coastwise laws, US vessel owners and operators engaged in domestic trade generally must use US-built vessels. GAO said the construction of vessels in US shipyards helps to support the US maritime industry, which plays a vital role in national defence.
Because US-built vessels generally cost more than foreign-built ones, MARAD has four financial assistance programs to encourage or improve US shipbuilding.
The agency's federal ship financing program generally offers loan guarantees for vessel construction at US shipyards. In the last five years, the program executed two loan guarantees for two vessel owners totaling nearly US$400 million.
The two tax deferral programs, the construction reserve fund program and the capital construction fund program, allow vessel owners or operators to defer paying tax on certain eligible deposits that are placed into an account and can be used to fund projects at US shipyards.
In 2024, seven vessel owners or operators had a construction reserve fund program account, and 137 vessel owners or operators had a capital construction fund program account.
Finally, the small shipyard grant program provides grants to small shipyards for equipment or training. In fiscal year 2024, this program had US$8.75 million in available funds and had 78 grant applications from shipbuilding or repair companies requesting just under US$50 million.
GAO said these four financial assistance programs have provided some support for vessel owners or operators and shipyards, but the programs' administration does not follow leading practices for assessing program performance.
For example, MARAD cannot determine to what extent the programs are effective in growing the US maritime fleet because it has not established measurable goals for, or assessed the performance of, these programs.
GAO said doing so would allow MARAD to identify any changes that could better increase the nation's shipbuilding capacity to promote national security and economic prosperity. An April 2025 executive order established United States policy to revitalise and rebuild domestic shipbuilding and requires certain actions to grow the US maritime fleet.
In addition, the 31 industry stakeholders GAO interviewed identified challenges facing vessel owners or operators and shipyards competing within the US domestic maritime industry. They also had ideas to address those challenges.
Why GAO did this study
GAO said concerns over the state of US commercial shipbuilding have grown in recent years, and that such concerns are particularly related to the nation's capacity to meet government shipbuilding and repair needs that are critical to national defence.
The James M. Inhofe National Defense Authorisation Act for Fiscal Year 2023 includes a provision for GAO to review efforts to support the US commercial maritime industry.
This report addresses, among other topics, (1) the use of MARAD's programs to encourage or improve US shipbuilding and the extent to which they follow leading practices and (2) ideas identified by selected stakeholders to address challenges facing the maritime industry.
GAO reviewed MARAD documents and compared its four financial assistance programs with leading practices for performance management. GAO also surveyed domestic vessel owners and operators and shipbuilding or repair companies.
GAO also visited selected shipyards and interviewed government officials and 31 industry stakeholders selected to provide a range of perspectives on MARAD's programs and the maritime industry's ability to contribute to national defence.
Recommendations
GAO has made seven recommendations, including that MARAD develop measurable goals for, and assess the performance of, its four financial assistance programs. The US Department of Transportation, MARAD's parent agency, agreed with the recommendations.
