Analysts at Poten & Partners, a tanker brokerage and market expert firm, have commented on the significance of the proposed SHIPS Act (comprising the SHIPS for America Act and the Building SHIPS in America Act). In their opinion piece, they emphasized the comprehensive nature of the legislation, stating that its “depth and breadth” clearly demonstrate the United States’ strong aspirations to revitalize its maritime industry, reports Seatrade Maritime.
Revitalizing Commercial Fleet
As outlined in a briefing by lawyers at Holland & Knight (H & K), a firm with a prominent maritime law practice in Washington, D.C., and New York, the introduction of these bills into the US Senate marks the beginning of a legislative process where they “will be sent to committees for a markup and approval.” Similarly, the US House of Representatives has its own set of committees that would review the legislation and propose amendments, referred to as “markups” on Capitol Hill.
A central objective of this legislative program is to revitalize the US commercial fleet. The initial strategy involves reflagging suitable vessels that were built outside the United States. Over time, the goal is to shift towards constructing vessels within the United States. Crucially, the proposed legislation includes the establishment of a “Maritime Security Trust Fund,” which aims to bolster the funding of maritime programs deemed critical to US national security interests.
The Holland & Knight team further explains the potential path of this legislation through Congress: “Because of the breadth of the legislation, the SHIPS for America Act may be referred to various committees of the Senate and House of Representatives. Though each committee will have to favorably report the legislation before the bill is voted on by the full House and Senate, parts of the SHIPS for America Act could move in an annual legislative vehicle such as the National Defense Authorization Act (NDAA).” This suggests that while the entire bill needs to pass both chambers of Congress, certain components could potentially be fast-tracked or incorporated into other significant legislative packages like the NDAA.
Ambitious Goal
According to a report by Poten & Partners, led by analyst Erik Broekhuizen, the proposed “SHIPS for America Act” aims for the Maritime Administration (MARAD) to establish a Strategic Commercial Fleet Program with the ambitious target of creating a fleet of 250 US-flagged vessels engaged in international trade. While the program would initially allow eligible participants to reflag suitable foreign-built vessels to expedite fleet growth, this option would be phased out after fiscal year 2030, after which only US-built vessels would qualify. The Act specifically acknowledges the urgent need for tankers and directs MARAD to prioritize these vessel types.
Poten analysts consider the goal of having 250 US-built and -flagged ships in international trade within a decade as “very ambitious,“ pointing out that there are currently only around 80 such oceangoing vessels in operation.
Discussing potential contributions from the tanker sector to the proposed Maritime Security Trust Fund, Poten’s report delves into the possibility of re-establishing “Tonnage taxes.” These would function as a penalty imposed on vessels “owned or operated by a foreign entity of concern or registered to a foreign country of concern (defined as Russia, China, Iran, and North Korea), as well as vessel owners who conduct significant amounts of business with the CCP-owned China State Shipbuilding Corporation (CSSC).” The specific penalties levied would be linked to the US Trade Representative’s (USTR) program targeting certain non-US vessels, which originated from its year-long investigation initiated in April 2024 and is set to take effect in October 2025. The Poten report notes that the USTR proposals are still subject to clarification and are likely to generate debate as the overall framework and specific wording are finalized.
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Source: Seatrade Maritime
