448 vessel orders! Could South Korean shipbuilders be the biggest winners in the reconstruction of the US shipbuilding industry?

South Korea's economic sector suggests that the country should view the U.S. government's shipbuilding reconstruction plan as an opportunity for its own shipbuilding industry. They recommend focusing on areas with clear business potential, such as LNG carrier and merchant ship construction, naval vessel MRO (maintenance, repair, and overhaul), and next-generation ship collaborations, and developing a mutually beneficial negotiation plan between South Korea and the U.S.

On May 19, the Federation of Korean Industries (FKI), commissioned a report titled "Analysis of the U.S. Shipbuilding Industry and Lessons for South Korea-U.S. Cooperation" by Professor Ryu Min-cheol of Korea Maritime University, proposing a cooperation plan between the South Korean and U.S. shipbuilding industries.

The "SHIPS for America Act," enacted in April this year, mandates that the size of the U.S. national strategic merchant fleet increase to 250 vessels. By 2047, 15% of U.S. LNG exports will be transported by U.S.-built ships. The U.S. Navy, through its 2025 warship decommissioning and new construction plan, is expected to build 364 new warships over the next 30 years. Additionally, in January of this year, U.S. President Trump mentioned ordering 40 icebreakers.

The report predicts that, driven by the U.S. government's shipbuilding reconstruction policy, the U.S. will order 403 to 448 ships in the merchant, LNG, and naval vessel sectors by 2037.

Professor Ryu Min-cheol argues that the South Korean government and shipbuilding industry need to develop strategies for these different areas to seize opportunities for growth:

In the LNG carrier sector, given the increase in U.S. LNG exports, it is unlikely that all newly built LNG carriers will be built domestically in the U.S. However, in the long term, South Korean shipbuilding companies need to prepare for localization. Simultaneously, as the U.S. strategic merchant fleet consists mainly of medium-sized vessels, South Korea can develop a public-private partnership to increase orders and business for its medium-sized shipbuilders.

In the U.S. Navy vessel MRO sector: Due to the close integration of U.S. naval combat vessels with advanced weapon systems, the possibility of South Korea undertaking MRO and new construction projects in the short term is low. Therefore, it is advisable to start with hull repair work to build trust, gradually expanding to hull modification and repair projects, and eventually, in the long term, participating in maintenance that includes weapon systems.

In the U.S. Navy vessel new construction sector: The focus should be on transport and support ships, and landing craft. South Korea needs to enhance the competitiveness of its naval weapons and combat systems to cultivate its overseas warship export capabilities. For next-generation ships, it is necessary to explore a joint South Korea-U.S. fund to conduct research on cutting-edge technologies such as large-scale carbon dioxide (CO₂) transport vessels, liquid hydrogen transport vessels, and unmanned autonomous vessels.

Professor Ryu Min-cheol suggests that the two governments should hold prior consultations on solutions to improve the production efficiency of U.S. shipyards and on the reorganization of land and surrounding infrastructure for U.S. shipyards acquired by South Korean companies. To ensure that South Korean shipbuilding companies can successfully enter the U.S. market, consideration should be given to relaxing restrictions on the overseas export of shipbuilding technology, excluding core technologies.

Professor Ryu Min-cheol also points out: "When pursuing business in the U.S., the South Korean shipbuilding industry needs to work with the U.S. to develop strategies to secure labor and supply chain foundations. To ensure the consistency of U.S. aid policies, the two countries need continuous consultations. It is also crucial to carefully examine the potential business risks arising from changes in the U.S. government's policy direction."