After years of working to successfully obtain congressional funding to rebuild several of its aging fleets, the Coast Guard is now facing additional delays because of a lack of shipyard workers.
The setbacks in the Coast Guard ship programs are merely the latest example of much larger and well-known national workforce problems that are constricting the economy as a whole. The U.S. Chamber of Commerce calls the worker shortage a “national crisis” because “businesses can’t grow, compete, and thrive,” while there are too many jobs without people to fill them.
Coast Guard officials have said that the worker shortage at shipyards along the Gulf Coast is delaying three of its programs already funded by Congress to modernize its fleets:
- The Polar Security Cutter Program (PSC) will produce three heavy polar icebreakers for $1.9 billion, replacing the aging 399' cutter Polar Star (now more than 50 years old) and a smaller cutter. The new PSC is being built in coordination with the Navy by Bollinger Mississippi Shipbuilding, but Coast Guard officials say it’s facing delays due to a lack of highly trained welders and design engineers. Delivery of the first cutter was scheduled for this year; the Coast Guard told WorkBoat that “the shipbuilder is undergoing a re-baselining effort that will ultimately result in a revised contract delivery date,” now projected for 2029.
- The Offshore Patrol Cutter Program is being constructed by both Eastern Shipbuilding Group, Panama City, Fla. (the first four) and by Austal USA in Mobile, Ala. (the next 11). An eventual total of 25 ships are planned to replace the service’s aging medium-endurance cutters at a cost of about $12 billion; the first of this fleet, the USCG Argus, was launched last October. The next three ships, currently under construction, have been delayed by production and manufacturing problems as well as hurricane damage on the Gulf Coast. The Coast Guard said the ships are their “highest investment priority,” filling the gap between open-ocean National Security Cutters and coastal Rapid Response Cutters.
- The Waterways Commerce Cutter Program, under contract with Birdon America with several shipyards in Louisiana and Alabama, will cost $922 million. The program aims to replace 30 of the Coast Guard’s aging inland construction and buoy tenders. The first new vessel was expected by 2025, but the revised schedule now calls for delivery of the first two variants in Fiscal Year 2026. The inland fleet maintains more than 28,200 marine aids throughout 12,000 miles of inland waterways, among other duties.
“There is high demand for a relatively limited pool of shipyard workers and skilled tradespeople in general. That can make shipyard workforce development and retention challenging,” Coast Guard Rear Adm. Chad Jacoby, assistant commandant for acquisition and chief acquisition officer, told Workboat.
“The service is investing in the next generation of cutters and boats, and we rely on a skilled commercial workforce in traditional areas like welding, pipefitting, electrical work, and fabrication — as well as high-tech work supporting network and communications capabilities — to deliver assets on schedule to address our ever-growing mission demands.”
According to Joey D’Isernia, chairman and CEO of Eastern Shipbuilding Group, his company has about 1,000 workers and needs at least 100 more, primarily skilled welders, electricians, painters, engineers, and various technical positions. When lacking a particular skill set, he said, “We leverage partnerships with trusted contractors to ensure that we can maintain the pace of our operations,” and that strong risk-reduction measures are “one key aspect of our strategy.”
D’Isernia said that shipbuilders are trying to deal with labor shortages “beyond mere poaching of workers from other sectors,” by leveraging workforce development grants, state and local incentives, and “establishing our own comprehensive training programs aimed at attracting young talent entering the job market.”
The other shipyards did not respond to requests for comment.
DEMOGRAPHICS AT WORK
Underlying the U.S. labor shortage is a complex mix of demographic and cultural trends.
Birthrates worldwide have been declining for years. The American fertility rate, already below what is needed to maintain a native-born population, is still shrinking; the only reason the nation’s population is growing at all is because of immigration.
The workforce is rapidly aging as post-war Baby Boomers flood into retirement. According to Census data, those age 65 and over were 17% of the population in 2020 (they were only 4% in 1900); by 2040, seniors will account for 40% of everyone in the country.
Labor force participation has been falling for years and hit a historical low of 60% during Covid in April 2020. It has recovered somewhat since the pandemic (to 62.5% in January 2024), but is still below pre-Covid rates. More than 50 million workers quit their jobs during the pandemic-driven “Great Resignation” in 2022, following the 47.8 million who did so in 2021.
Unemployment is historically low — just 3.7% in January 2024, after spiking to almost 15% in 2020 during the height of Covid.
Unaffordable childcare is forcing many parents (mostly women) to stay out of the workforce. Between 2000 and 2022, 16,000 childcare centers were forced to close and many more cut their hours, dramatically reducing accessibility and affordability of childcare. Half of all workers and nearly 60% of parents cite lack of childcare as their reason for leaving the workforce.
Competition for skilled workers is fierce and expensive. Since there is a limited talent pool for skilled labor, costs are soaring as employers poach each other’s workers with pay raises and bonuses. A 2023 survey found that 70% of companies in the aerospace and defense sector saw increased turnover from 2022-2023, driven by compensation. One result: The Defense Department is moving away from fixed-price contracts.
The tight labor market is also straining the Pentagon’s ability to fill its all-volunteer ranks in all branches of the armed forces. For instance, the Navy has been scaling back its physical and academic standards in order to attract recruits who fail the Armed Services Qualification Test or don’t have a high school diploma or GED and is also making it easier to keep boot camp recruits who test positive for marijuana.
Because of persistent recruiting shortfalls, “the all-volunteer force faces one of its greatest challenges since inception” in 1973, the Defense Department’s chief officer for personnel and readiness told Congress last December.
SOLUTIONS AND POLITICS
Among the many proposals to deal with the maritime worker shortage include the following:
- Expand, with federal support, the growing local and state emphasis on trade schools and vocational education to produce more carpenters, electricians, plumbers, and welders, and reduce the emphasis on purely academic education.
- “What’s urgently needed is a national campaign to address the critical shortage of skilled shipbuilders,” said Eastern’s D’Iserna. “This isn’t solely an industry concern; it’s a national defense imperative…our adversaries and allies are investing heavily in their shipbuilding capacity, highlighting the urgency for us to do the same.”
- Expand and promote apprentice programs among commercial shippers, an initiative the American Waterways Operators (AWO) has long promoted among its members.
- Make a much greater investment in the marketing and advertising of maritime jobs (which currently tend to be invisible to most students).
- Beef up the nation’s maritime academies, the primary feeder schools for the merchant marine. According to 2023 data from the U.S. Maritime Administration, enrollment rates for all seven academies steadily declined between 2007 and 2022. Just two of the seven academies produced almost half of the Unlimited License graduates in 2023 (SUNY Maritime in the Bronx, N.Y., and the U.S. Merchant Marine Academy in Kings Point, N.Y.). The two heartland academies produced the fewest annual graduates in 2023 (Great Lakes Maritime Academy in Traverse City, Mich., at 4%, and Texas A&M Maritime Academy in Galveston, Texas, at 6%.
- Make workplace changes that will appeal to the younger and more diverse workforce of today — especially women and minorities — and adapt to the younger generations’ cultural differences. AWO, for instance, has been pushing the Department of Transportation to adopt more flexible and less onerous testing for marijuana, given that many states (unlike the federal government) have legalized the drug.
A top priority for the U.S. Chamber of Commerce has been to expand legal immigration (while also controlling illegal immigration) to fill jobs that native-born Americans can’t or won’t take. Specifically, it wants the government to grant far more temporary foreign-worker visas for skilled workers in specialty occupations (such as technology) and for migrant farm workers (who are essential to American agriculture).
However, that idea recently hit a dead-end when a major bipartisan immigration reform bill supported by President Joe Biden was derailed in the Senate, a victim of election-year politics.
Even before details were released, former president and presumptive GOP nominee Donald Trump came out against the bill, and House Republicans effectively killed it. Opposition to immigration (including legal immigration) is central to Trump’s re-election campaign and his plans for a second term.
