It's not easy to thrive in U.S. shipbuilding, an industry routinely battered by labor shortages, thin margins, and volatile demand cycles.
These days, however, many builders who have weathered years of headwinds are beginning to look up.
Conrad Industries Inc., Morgan City, La., reported improved 2025 financial performance "despite a continued challenging environment marked by steel tariffs, elevated material costs, labor constraints, and broader economic and geopolitical uncertainty," the company's president and CEO, Cecil A. Hernandez, said in a statement. "While these factors contributed to delays in certain contract awards, we remain cautiously optimistic about 2026."
Hernandez, who oversees Conrad's five Gulf Coast facilities, cited project diversification as a growth driver. "For the long term, we are aligning our [facilities] into a coordinated production system that will support government and commercial programs, lifecycle repair services, and industrial fabrication," he said. "We believe this operating model will improve throughput, flexibility, and capital efficiency, while positioning us to participate in emerging opportunities across defense, infrastructure, and industrial markets."
For many shipbuilders looking to diversify, uncrewed naval vessels are the next big thing. The Navy's push to expand its fleet of autonomous surface vessels — driven by both cost pressures and strategic demands — has opened a lane that commercial yards, with their flexibility and available capacity, are well positioned to fill.
Conrad, for example, has partnered with Blue Water Autonomy Inc., Boston, to build 190' steel autonomous ships based on the Stan Patrol 6009 hull design licensed from Damen Shipyards Group, Gorinchem, Netherlands. Other established shipbuilders venturing into the uncrewed vessel space include Breaux Brothers Enterprises, New Iberia, La., which is building uncrewed vessels in partnership with HII, Newport News, Va.; Senesco Marine LLC, North Kingstown, R.I., which has partnered with HavocAI, Providence, R.I.; as well as the Chouest Group, Cut Off, La., which will build for Anduril Industries Inc., Costa Mesa, Calif.
For smaller and mid-size commercial shipbuilders, long starved of long-term program commitments, recent political support and demand signals from the Pentagon are offering something of a rare jolt of confidence to plan, hire, and invest.
Well-known tugboat builder Master Boat Builders Inc., Coden, Ala., in December announced plans to construct a new $60 million defense shipbuilding facility directly across Bayou Coden (a small tidal waterway) from its existing commercial shipyard. The company, which is already building modules for the U.S. Navy's Navajo-class Towing, Salvage, and Rescue Ship (T-ATS) program through a partnership with prime contractor Austal USA, Mobile, Ala., said it is poised to meet growing demand.
"We're not competing with the major yards," Garrett Rice, president of Master Boat Builders, said in March upon announcing the T-ATS contract. "We're adding capacity that the Navy needs right now. Our proximity to Austal USA, our experienced workforce, and our new investment in dedicated defense infrastructure all position us to support this program and others that follow."
The investment momentum extends beyond the Gulf Coast. In one of the most significant capital commitments the domestic industry has seen in decades, South Korean conglomerate Hanwha Group, Seoul, announced a $5 billion infrastructure expansion plan for Hanwha Philly Shipyard, Philadelphia, in August 2025. The announcement came as part of South Korea's broader $150 billion U.S. shipbuilding investment commitment, reached following summit talks between President Donald Trump and South Korean President Lee Jae Myung.
Hanwha acquired Philly Shipyard in 2024 through a $100 million investment, establishing it as a beachhead for the conglomerate's ambitions in the American market.
The $5 billion expansion plan signals a long-term bet on U.S. shipbuilding's trajectory under the current administration. The program calls for two additional docks and three quays, along with a possible new block assembly facility, with the goal of increasing annual production from fewer than two vessels to as many as 20.
Hanwha Vice Chairman Dong Kwan Kim, speaking at an August 2025 christening ceremony for the third National Security Multi-mission Vessel held at the shipyard, framed the investment in terms of reindustrialization — a theme that has resonated strongly with the Trump administration's push to revitalize domestic manufacturing. "This is just the beginning," Kim said. "Hanwha is committed to being a partner in building the next chapter of American shipbuilding."
The company said it aims to leverage the expertise of its global shipbuilding arm, Hanwha Ocean, to produce LNG carriers, naval modules and blocks, and eventually naval vessels from the Philadelphia facility.
A U.S. subsidiary of Hanwha's shipping arm has also placed an order for 10 medium-range oil and chemical tankers from the yard, with the first delivery expected by early 2029, aimed at supporting Jones Act fleet renewal.
Business has been subdued in several shipbuilding markets, such as the towboat and barge sector, while demand in others, including fire, law enforcement, and patrol boats, has been more robust.
"Our workboat business is probably the best it's been in many, many years," said Mike Blocher, director of sales at North River Boats, Roseburg, Ore., crediting much of the builder's success to its reputation for quality while also pointing to more frequent requests for bids and quotes.
"Demand is high, especially in the government sector right now, but also in the direct commercial sales sector," he said.
North River builds boats ranging from about 20' to 50' and beyond, including fireboats, law enforcement and rescue craft, pilot boats, and hydrographic survey vessels.
Macroeconomic pressures, especially inflation, tariffs, and supply-chain volatility, have significantly increased boat prices and complicated cost forecasting and fixed-price bidding, Blocher said, but noted that customers, in general, have been understanding.
"Everything is selling right now," he said.
