Arizona senator at Philly Shipyard to promote bill to expand U.S. commercial fleet

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U.S. Sen. Mark Kelly, D-Ariz., visited Hanwha Philly Shipyard on Tuesday to promote his SHIPS for America Act, a bill aimed at revitalizing the U.S. shipbuilding and maritime industries. Joined by U.S. Rep. Mary Gay Scanlon, D-Pa., Kelly said his bill would strengthen the economy, lower costs and protect national security.

Kelly, a former Navy pilot and U.S. Merchant Marine Academy graduate, emphasized the urgency of boosting U.S. maritime capabilities in response to competition with China.

“We have about 80 oceangoing merchant vessels with U.S. crew members flying the U.S. flag; China has 5,500 at any moment,” Kelly said. “If they wanted to shut down our economy, they could just stop shipping goods to the United States. If we are ever in a major conflict anywhere in the world, we’ve got to get our combat power across oceans and we can only do that if we have a very viable and robust merchant marine, which we do not have now.”

Kelly chose the newly monikered Hanwha Philly Shipyard — formerly known as Philly Shipyard — to illustrate the kind of investment and modernization he wants to encourage through the SHIPS for America Act.

Founded in 1997 at the site of a former Navy yard, Philly Shipyard became a leading producer of ocean-going merchant vessels, including container ships and oil tankers. It became a dominant producer of Jones Act-compliant ships, which are required to be built, owned and crewed by Americans for domestic shipping under the 1920 Merchant Marine Act.

The Jones Act — or the Merchant Marine Act — was designed to protect the American shipbuilding industry.

However, increased global competition and fluctuating demand for new vessels have led to uncertainty in the industry. In December, South Korea’s Hanwha Systems and Hanwha Ocean, subsidiaries of Hanwha Group, acquired Philly Shipyard for $100 million to expand production and integrate advanced shipbuilding technologies.

Kelly praised the investment.

“With Hanwha taking over control and the investments that they’re making here in Philadelphia to build more ships is an incredibly positive thing,” he said. “Not only for the economy here in the Philadelphia area, but also for our national security.”

During the tour, Kelly visited the State of Maine, a National Security Multi-Mission Vessels being built at the shipyard. The ship, designed as a training vessel for maritime academies, is expected to be delivered to Maine Maritime Academy later this year. It is also equipped for humanitarian assistance and disaster relief.

Kelly and Scanlon met with apprentices and instructors in the shipyard’s training center where they spoke with employees who transitioned from other industries, including childcare.

“I asked them, ‘What does this job mean to you and how do you like working here compared to what they were doing previously?’” Kelly recounted.

The senator added that workers said “‘It pays a lot better. It’s a much better career.’ They’re planning on being here for their entire careers, building these great ships out of this yard.”

The shipyard employs around 1,700 people, including dozens of apprentices. Apprentices are considered full-time from their first day, but go through 39 months of classroom and on-the-job training to learn a variety of skills required for ship production.

“When I came into office in 2018, it was pretty quiet around here and today to be here and see the activity and the ships in process, and to meet with some of the 80 folks who are going through the apprentice program, it’s really exciting,” Scanlon said.

David Kim, President and CEO of Hanwha Philly Shipyard led the tour, and says he’s fully “on board” with Kelly’s legislation.

“We think it’s great, not just our industry and the company, but for the country — for the national security implications it has,” Kim said. “And so very much thank you for your leadership on that. When that passes, I promise you we will be ready.”

The SHIPS for America ACT would create the Strategic Commercial Fleet Program with the goal of developing a fleet of U.S.-flagged, American-crewed and domestically built merchant vessels. The goal would expand the nation’s international commercial fleet by 250 ships within 10 years.

It would also create a Maritime Security Board with its head, the maritime security advisor, operating within the White House. They would be tasked with making decisions for how to implement a national maritime strategy.

The bill would additionally pay for maritime security programs and building maritime commerce infrastructure through a 25% investment tax credit for shipyard investments and a Maritime Security Trust Fund.

Editor’s Note: This story has been updated to reflect the correct name for Sen. Mark Kelly.