On 7 July 2021, Jovenel Moïse, the President of Haiti, was assassinated in his own bedroom, sending Haiti into a constitutional crisis from which it has not recovered. While there remain conflicting reports around the circumstances of his murder, one credible consideration was that he may have been killed to prevent him from exposing individuals involved in criminal enterprise. While drugs and arms are the main illicit commodities associated not only with Haitian organized crime but with the Caribbean region more broadly, they may not have been the only illicitly traded goods with which Moïse was concerned – his other major interest was in criminality surrounding the trade in eels.
The Imperative For Vigilance
As little-known and seemingly bizarre commodities begin to fetch higher and higher values in global illicit markets, law enforcement officers must become more vigilant in identifying and responding to new trends. This need is becoming particularly acute in the maritime domain, as the out-of-sight nature of marine life makes the illegal trade in living marine resources particularly attractive to criminal actors. High value marine species are ideal commodities for pursuing illicit profits and laundering money at the same time. The general lack of familiarity with aquatic life reduces the likelihood of being caught either on paper or in person, and the inability to trace the origin of these commodities can make accountability an even more elusive challenge.
Why Eels?
Indeed, the eel trade is an excellent example of this growing problem for law enforcement officials in the Caribbean and beyond: the illegal movement of “invisible commodities” that no one recognizes as the instruments of crime. Eels may not seem to go together with guns and drugs, but they can be as profitable as cocaine with hardly any of the risk. While terrestrial commodities – including gold, timber, fuel and wildlife – have been part of this phenomenon for a while, the dynamic becomes more extreme when it involves marine species that are typically so unfamiliar to most people as to go unnoticed. This aspect of fisheries crime and exploitation of the maritime domain demands closer attention. Its implications are not only environmental and economic, but closely tied to both the rule of law and the ability to govern, as Moïse’s death painfully illustrates.
While eels are by no means the only invisible commodity in the Caribbean, they present a revealing case study. The world’s eel population originates entirely from the Sargasso Sea in the North Atlantic Ocean near Bermuda. Eels begin their lives as leaf-like larvae that drift in different directions from their spawning site in the Sargasso Sea towards estuaries and rivers. Within 55 days of their arrival to estuaries, they turn into glass eels- small, transparent organisms whose value soars while they are in this clear state. As they progress through estuaries, rivers, and ecosystems, they eat what is available to them. What they consume literally colors them as they grow into elvers. Elvers are still adolescent eels, but their color signifies their loss of value. The elvers continue to grow before transforming into adult yellow eels within a year. These adult eels remain in the yellow eel phase for several years, before European and American eels mature into their final phase, silver eels. Towards the end of their life, silver eels will return to the Sargasso Sea to spawn before their death.
Staggering Value
Regardless of how eels may or may not appeal to palates in different parts of the world, the economics around the marketplace are telling. At source, glass eels from the Caribbean fetch around $4,000 per kilo, making them four times more valuable than a kilo of marijuana at origin and roughly the same as cocaine at first point of sale. While the glass eels do increase in value across the supply chain, they reach a maximum figure of about $8,000 per kilo in transit and $12,000-$15,000 at destination. That does not keep pace with the supply chain of drugs, as cocaine reaches a range of about $28,000 to $70,000 at destination. The thing about living organisms, however, is that they grow. A patient purchaser of glass eels can raise those eels to full adulthood, at which point their value can hit as much as $35,000 per kilo, putting them back in the same range as cocaine. At scale, as in the case of the vast eel farms in parts of Asia, this “bio-arbitrage” can generate profits into the billions of dollars. There is nothing intrinsically illegal about this process – unless the eels were sourced or shipped illegally or used as a means of turning criminal cash, used to buy glass eels, into legitimate profits on the global seafood market. Those forms of illegality have become big business, and led to eels being officially declared endangered. In the EU, the export of eels has been banned outright since 2010, but illegal trade persists, and eel fisheries have been almost completely depleted to the point of being “critically endangered.” The Caribbean, where eels flourish but no such restriction exists, is already being exploited and is exposed to grave risk.
Whether it is eels, sea cucumbers, turtles, lobster or other sea creatures, maritime commodities are attracting more criminal actors. With their advantages of high values, bio-arbitrage, and limited interdiction risk, they present an appealing alternative to trafficking drugs, weapons, humans, or other contraband that features on the radars of law enforcement and customs agencies. And the informal and cash-intensive upstream markets for eels are an ideal venue for money laundering. What this means is that there is a need for increased vigilance.
Turning the Tide on Invisible Criminal Commodities
Disrupting the harvesting and sale of these invisible commodities requires three main approaches. First, there needs to be rigor in identifying the commodity trends. To accomplish this, both governmental and non-governmental actors need to work together. Various entities outside of government – from fishers to civil society organizations to businesses – are likely to see some of the initial trends in new maritime commodity harvesting and trading, which will leave traces in market activity and trade data. There needs to be a relationship between them and the governmental actors to then be able to make sense of what is going on and what can be done about it. Within governments, the challenge is of interagency cooperation. Too often, one ministry or agency will have some insight but not share it, and thus constrict what can actually be done. In this case, for example, it may be that the fisheries agencies spot the activity, but if that is not shared with the police, coast guard and customs, there may be little means of effectively interdicting it.
Second, coast guards and other maritime law enforcement agencies need not only to know what is going on, but also what they should be looking for and what they can do about it. Without training, it is not easy to even make sense of eels being trafficked, and with each of the maritime commodities, different means of transport require different training for law enforcement. And even when the eels or other commodities are identified, understanding the legal basis for what action may or may not be taken is critical. This is where regional organizations – the Caribbean Regional Fisheries Mechanism (CRFM), the Caribbean Community’s Implementation Agency for Crime and Security (CARICOM IMPACS) and the Regional Security System (RSS) – can all play a vital role both supporting information flow and ensuring standardized training across the region. Any jurisdiction that has a blind spot may become a magnet for the criminal activity.
Finally, prosecutors and judges must be clear on what can be done to stop those who engage in the illegal harvesting and trafficking of maritime commodities. If the law is not fit for purpose, legal professionals must also have a role in working with law enforcement to encourage a legislative or regulatory enhancement to address that state of affairs. In addition to having the right laws, the prosecutors and judges must be comfortable with them and willing to use them. So ensuring training in how to prosecute such cases is also a critical element that can be supported by regional organizations.
What Next?
Criminals will always seek illicit profit with the highest reward and the lowest risk. Maritime commodities have become increasingly popular on account of their relative invisibility. Eels may be the Caribbean’s “flavor of the month,” but something else will come to take their place in the future. That means that the region – replete with sophisticated criminal organizations – needs to build collective resilience against this phenomenon by working together. First, to make invisible criminal commodities visible, and thereafter, to make the risk of getting caught outweigh the potential rewards of the crime.
Dr. Ian Ralby is President of Auxilium Worldwide, a charitable non-profit committed to global harmony. He is a globally recognized expert in maritime law and security and works around the world to help states and regional organizations identify and address maritime crime. Auxilium Worldwide has been working extensively with the Caribbean Community’s Implementation Agency for Crime and Security (CARICOM IMPACS) to uncover and counter overlooked illicit maritime activities, particularly in the fisheries sector.
Dr. David Soud is Head of Resource Responsibility at Auxilium Worldwide. He specializes in tracking illicit flows, with particular expertise in the criminal exploitation of natural resources.
Sophie Podrog is an undergraduate at Yale University, majoring in Global Affairs with a certificate in Human Rights. While working for Auxilium Worldwide, she has specialized in researching eel trafficking along with other maritime crimes.
Featured Image: An apprehended vessels along with small skiffs used by fishermen which were apprehended on November 22, 2017. (Royal Bahamas Defense Force photo)
Since October 2023, the Houthis, a Yemeni rebel group that seized control over much of the country over a decade ago, have waged a campaign against shipping vessels in the Red Sea, Bab al-Mandab Strait, and Gulf of Aden, attacking over 100 commercial maritime vessels. The Houthis have long cited Israel’s war in Gaza as the raison d’être for its campaign, claiming that the attacks on Israeli ships or any vessels conducting business at Israeli ports are intended to punish Israel for its role in the conflict. However, in the wake of the recent ceasefire in Gaza, one might reasonably expect these attacks to end, particularly since there has already been a decrease in the number of attacks conducted since the Houthis’ May 2025 agreement with the US to avoid targeting American vessels in exchange for an end to US airstrikes on Yemen. Houthi leader Abdul-Malik al-Houthi reportedlyordered a cessation of attacks on ships flying the Israeli flag or docking at Israeli ports, and the group’s messageto Hamas’ Qassam Brigades indicating that its campaign against Israel is on hold has been interpreted by some as a sign that the Houthis are shifting their focus away from the Red Sea.
An end to Houthi attacks in the Red Sea would be a welcome development given how disruptive the campaign has been to global commerce. Traffic through the Suez Canal has decreased by roughly 50% due to concerns that ships will be targeted in the Red Sea. Many vessels have instead chosen to sail around the Cape of Good Hope, adding significant time and expense to their journeys and contributing to global inflation. Given that as much as 15% of global trade and 30% of global container traffic transits the Suez Canal yearly, the global impact of the Houthi attacks cannot be understated.
However, the Gaza ceasefire may not herald the return of safe and stable maritime commerce in the Red Sea. The ceasefire remains tenuous in the wake of Hamas’ attempt to reassert control in pockets of Gaza City, both sides have already accused the other of violating the agreement. Countless potential pitfalls remain on the path to a permanent peace which could easily prompt the resumption of hostilities, including the return of the remains of the outstanding Israeli hostages, fate of Hamas, and Israel’s willingness to accept a Palestinian state. Even then, a peaceful resolution to the conflict in Gaza may be insufficient to permanently end the Houthis’ maritime attacks. The reason for this speaks to the Houthis’ underlying motivations behind their efforts to disrupt Red Sea commerce, which go beyond the group’s stated intent to destroy Israel and support the Palestinian cause.
The Houthis’ Red Sea attacks are primarily intended to address the legitimacy crises the group faces both domestically and abroad. While the Houthis succeeded in capturing Yemen’s capital city of Sana’a and forced the resignation of then-President Abdrabbuh Mansur Hadi, the group remains opposed by Yemen’s internationally recognized government and other armed groups such as the Southern Transitional Council and Yemeni National Resistance which control significant swaths of territory within the country. Within Houthi-controlled territory, the group remains unpopular with much of the population due to its imposition of restrictive social control measures, the poor state of Yemen’s economy, endemic government corruption, and the Houthis’ struggles to pay public sector salaries. Internationally, Iran is the only country to recognize the Houthis as the legitimate ruling government of Yemen, and the group has been diplomatically and economically isolated from most of the global community.
Through this lens, the group’s campaign in the Red Sea can perhaps best be viewed as an effort to strengthen the image of the Houthis as a fully functional governing entity and a powerful geopolitical force capable of waging war against regional and global powers and single-handedly disrupting global commerce. While Houthi attempts at striking the Israeli mainland have been largely unsuccessful, the group identified attacks against maritime vessels as a more achievable means of inserting themselves into the broader conflict against Israel while also elevating their global threat profile. This interpretation is further supported by the Houthis’ decision to offer “safe transit” waivers to ships hoping to transit the Red Sea without being targeted. To the Houthis, every shipping company that applies for such a waiver helps cement the perception of the Houthis as a legitimate governing authority. Similarly, securing a peace agreement with the United States served as a significant propaganda win for the Houthis, allowing them to portray themselves as a peer competitor of the Americans capable of inflicting enough damage on US interests to necessitate such a deal.
While the Houthis’ embrace of the Gaza War cause is consistent with the group’s prevailing pro-Palestinian and anti-Israeli beliefs, the Houthis also had several strategic reasons to tie their Red Sea campaign to this conflict. First, Houthi involvement in the Gaza War is one of the few policies undertaken by the group that has been widely popular due to the Yemeni public’s widespread opposition to Israel. While 2024 polling from the Sana’a Center for Strategic Studies shows that the Houthis themselves remain unpopular in Yemen, it also shows that the attacks themselves have produced positive feelings among Yemenis living in areas of Houthi, government, and divided control. These maritime attacks lend credibility to the Houthis’ claims that they are waging war in support of Palestine on behalf of the Yemeni people, while Yemen’s internationally recognized government has been largely unable to criticize the Houthi campaign since doing so would lend credence to the Houthis’ portrayal of this government as a Western-backed puppet that represents foreign rather than domestic interests. The attacks have also been a boon for recruitment to the Houthi cause. The UN estimates that the number of Houthi fighters increased from 220,000 in 2022 to 350,000 in 2024, and successful propaganda campaigns centered around the Houthis’ war against Israel served a major driver of this increased recruitment. Every successful strike and foreign retaliation against the Yemeni homeland in response to these attacks risks producing a rally-around-the-flag effect that engenders greater public sympathy.
Additionally, the Houthis’ embrace of the Palestinian cause as a justification for its Red Sea attacks has helped deepen its partnership with Iran. Despite the Houthis’ growing capacity to manufacture weapons domestically, Iran remains an invaluable patron for the Houthis which has continued to supply the group with munitions, as evidenced by the Yemeni National Resistance Force’s interception of over 750 tons of Yemen-bound Iranian weapons in July. Iran’s arming of the Houthis was originally intended to oppose the Saudi-led coalition’s efforts to topple the group and prevent Yemen from becoming a proxy state of Iran’s geopolitical adversaries. However, the Houthis’ willingness to wade into the Gaza conflict in opposition to another of Iran’s primary adversaries (Israel) has helped establish the Houthis as a reliable partner worthy of continued support at a time when Iran’s regional proxy network has been significantly degraded following its disastrous Twelve-Day War against Israel.
Furthermore, the Houthis have used the Gaza War as cover for their Red Sea attacks in part to undermine public perceptions of other regional Arab powers. While countries such as Saudi Arabia and the UAE are ostensibly supportive of the Palestinian cause, the Houthis have repeatedly highlighted that these states have proven unwilling to match that support with military action, drawing favorable contrasts between this perceived inaction and the Houthis’ successful maritime campaign. In doing so, the Houthis have sought to weaken regional opinion of the countries which once actively worked to topple them after their capture of Sana’a.
While the Houthis’ embrace of the Palestinian cause has been largely successful for the group, there is reason to believe they will continue to target commercial shipping interests in the Red Sea even if the conflict in Gaza remains frozen. First, the Houthis could continue to shift the goalposts on their justification for targeting vessels in the Red Sea in opposition to Israel. The road to peace between Israel and the Palestinians will be full of stops and starts, and the Houthis can weaponize each roadblock as a sign of Israeli aggression and resume their Red Sea attacks.
Should the fragile peace in Gaza hold, the Houthis could also adopt the United States as the primary public face of its Red Sea campaign, drawing on the broad unpopularity of the US among Yemenis in the wake of America’s lengthy drone campaign against extremist groups in Yemen. The aforementioned US-Houthi détente may be insufficient to deter future attacks, as evidenced by the Houthis’ March 2024 attack on a Chinese ship despite making similar promises to avoid targeting their vessels. The Houthis’ decades of insurgency experience have made them adept at surviving airstrikes while preserving their ability to conduct maritime attacks. This is not to say that airstrikes against the Houthis have been wholly ineffective. The strikes launched by the US this spring inflicted over $1 billion in damage, killed several prominent Houthi figures, and played a role in bringing the Houthis to the negotiating table, and a recent Israeli strike succeeded in killing Houthi military leader Muhammad Abdul Karim al-Ghamari. However, the Houthis may calculate that they would gain more militarily from the increase in aid they would receive from Iran if they began attacking ships which have made port calls to the United States than they would lose as a result of retaliatory American strikes, especially since such strikes would further encourage more disaffected young men to join the Houthi cause.
Finally, the Houthis’ growing proficiency in carrying out Red Sea attacks may embolden them to continue these efforts. The Houthis have increased their coordination with both the Sudanese Armed Forces and the Somali extremist group Al Shabaab in recent months. Greater cooperation with these groups could allow the Houthis to extend the range of ships they are able to target in the region and add further risk to ships hoping to hug the coast of Africa to avoid attacks, while also providing the Houthis with additional sources of regional intelligence and material support. Rather than relying exclusively on long-range munitions to harass their targets, recent attacks have also shown the Houthis adopting a greater variety of tactics, including using a combination of both remotely operated ships and vessels crewed by combatants who boarded and planted explosive devices on ships. These tactics suggest that the Houthis can continue harassing ships in the region even if the group’s supply of missiles and drones begins to dry up.
While Houthi attacks in the Red Sea and adjoining waterways may wax and wane in the coming months, safe transit through the Red Sea is unlikely to become a reality in the foreseeable future. The Houthis’ Red Sea campaign is not intrinsically linked to the Gaza conflict and may therefore continue even if that war ends peacefully. The Houthis will likely continue to use these attacks as a leverage point to press for more favorable final-status peace negotiations with both Saudi Arabia and Yemen’s internationally recognized government to help secure them a more advantageous political position in Yemen moving forward. Only an end to the decades-long conflict between the Houthis and their enemies within Yemen will bring an end to the group’s efforts to disrupt maritime commerce in the region.
Matt Reisener is the Senior National Security Advisor for the Center for Maritime Strategy. He previously served as Senior Program Manager for the Middle East and North Africa for the National Democratic Institute, where he managed international development programs in Yemen.
Featured Image: USS Dwight D. Eisenhower Carrier Strike Group Conducts PHOTOEX with ITS Cavour Carrier Strike Group in the Red Sea (Photo by Petty Officer 3rd Class Kade Bise Carrier Strike Group Two)
The results of a 2023 wargame simulating a Chinese amphibious invasion of Taiwan showed that the combined forces of Taiwan, Japan, and the U.S. successfully denied Chinese objectives and defeated the invasion. However, multiple aircraft carriers and dozens of cruisers and destroyers were lost. Additionally, critical munitions needed to defeat Chinese forces were rapidly depleted due to limited magazine capacity and delayed logistics support. Current events in Ukraine, Russia, and the Middle East have confirmed the wargame’s conclusions as prescient, revealing the U.S. defense industrial base struggles to support the nation’s military commitments and policy goals. As a result, although the country still produces advanced systems and munitions, it lacks the capacity to replace material losses and expenditures during prolonged combat. The country must promptly address these issues by expanding policies, authorities, investments, and partnerships with like-minded nations that foster co-manufacturing, maintenance, and knowledge sharing in the construction of combat platforms to compensate for existing industrial base deficiencies.
Atrophy and Sounding the Alarm
The health of the defense industrial base is vital to the success and sustainability of military campaigns. In 2024, a bipartisan Commission on the National Defense Strategy found that the defense industrial base “is unable to meet the equipment, technology, and munitions needs of the U.S. and its allies and partners.” Through inattention, flawed policy, and poor strategic decisions, the U.S. allowed its defense industrial base to atrophy. The decline of the defense industrial base also included years of neglect of government-owned facilities, which served as the purveyor for the military’s higher-end modernization priorities.
An examination of current shipbuilding capacity highlights the challenge: a country’s ability to produce commercial ships also enables it to build warships. In the 1970s, the nation constructed 5% of the world’s commercial ocean-going vessels, but todaythat figure has fallen to less than 0.2%. Currently, the U.S. Navy relies on seven shipyards to build large warships and is decommissioning shipsfaster than it commissions new ones. This situation, along with rising costs for new warships and delays in production, indicates an impending crisis due to insufficient capacity to expand the fleet and quickly repair ships damaged during wartime.
Previous administrations recognized the challenges posed by China and Russia and took steps to revitalize manufacturing. In 2017, President Trump signed an executive order calling for a health assessment of the defense industrial base. This was followed by the Biden administration’sreview of ways to strengthen supply chain resilience and U.S. manufacturing. The war in Europe prompted the U.S. to accelerate plans to address issues in the industrial base.
Responding to the Russian invasion of Ukraine, the U.S. Army quickly increased funding to boost the production of 155mm artillery ammunition. Although these efforts demonstrated that the country could accelerate production, the pace was still insufficient to meet demand during large-scale combat operations. Another challenge to munitions replenishment is the expansion of U.S. weapon systems and munitions acquired through Foreign Military Sales, Direct Commercial Sales, and Presidential Drawdown Authority. While these authorities and sales benefit the industrial base over the long term, potential short-term supply shocks, such as allied and partner use in Ukraine exceeding production capacity for 155mm artillery munitions, are concerning. One way to address these shortages is by expanding existing authorities, policies, and strategies.
A Means Forward
The Defense Production Act of 1950 is a tool for Presidents to prioritize, expand production, and protect private companies from foreign mergers and takeovers to bolster national defense. The Act’s Title III authorities support production capacity by funding critical materials, technology, and workforce development. However, years of neglect and offshoring will require significant capital investments to reverse deindustrialization in steel production, manufacturing, and mining.
One approach is to increase the amount of Defense Production Act (DPA) Title III funds, focusing on specific areas of the defense industrial base that support large-scale combat operations. This includes funding for workforce development, munitions facilities, mines for strategic and critical materials, and expanding shipyards. A recent example is the Title III award to two companies that enhanced the capability and capacity of solid rocket motors, a critical component of precision-guided munitions. In 1992, Title III was amended to include Canada as part of the domestic industry, enabling the allocation of funds. Further expansion of Title III occurred in 2024, with the addition of the United Kingdom and Australia.
Current and future administrations must keep expanding relationships with allies and partners to strengthen the defense industrial base. Considerations should include their capabilities, capacity, and strategic location. For example, Indo-Pacific ally New Zealand is modernizing its military through its existing industrial base and “closer defense relations” with Australia. New Zealand’s efforts align with the Five Eyes intelligence-sharing alliance and the National Technology and Industrial Base framework. Japan, another technologically advanced long-term regional ally, can assist and reinforce the U.S. through co-production enabled by recent defense investments and shipyard initiatives. Another longstanding ally, Norway, already co-produces the advanced Naval Strike and Joint Strike Missiles and is building another facility in the U.S. Including these nations among those eligible for Defense Production Act funding will improve the capacity to expand domestic and allied magazine depths in the Indo-Pacific and European regions.
The National Technology and Industrial Base (NTIB) exists to support a “more robust domestic defense industrial base” through “dual-use research and development (R&D), production, maintenance, and related activities.” Established from experience in World War II and codified into law in 1993, the initial agreement between the U.S. and Canada has now expanded to include the United Kingdom, Australia, and New Zealand. Extending the NTIB to other countries, such as Japan, South Korea, and European allies like Norway, can bring benefits, including increased production and maintenance efforts, especially in areas where the U.S. faces shortages, such as munitions and shipbuilding. This may involve more joint production projects, overseas and within the U.S. The upcoming National Security Strategy should also highlight the importance of strengthening the defense industrial base, which will help guide Congress and the Department of War’s budget priorities.
The U.S. also needs to address domestic tool and machinery manufacturing to support the defense industrial base. For example, the U.S. purchased production equipment from Turkey to expand its 155mm munition manufacturing. Five-axis CNC machines used in advanced manufacturing arenow mostly foreign. Investments in precision machinery are expensive, and their return on investment depends entirely on the amount of work expected. A way to improve this is to incorporate more multi-year contracts into defense deals to motivate the industry to invest in its factories and modernize, thereby stabilizing demand and revenue.
Ford Motor Company’s B-24 assembly line at Willow Run during World War II. (Photo via Wikimedia Commons)
The 2023 National Defense Industrial Strategy promoted risk reduction by increasing cooperation with allies and partners in areas such as sustainment, supply chain management, maintenance, repair, and overhaul, and by enhancing interoperability through sharing science and technology. The strategy’s Implementation Plan included “co-development and co-production of priority defense systems” with allies and partners as a key effort. The Department of War’s recently published Acquisition Transformation Strategy calls for the Department to “engage with allied Nation’s Industry partners for technology assessment, integration, and procurement, driving research, development, test and evaluation (RDT&E) expenditure reductions and worldwide supply chain diversification.” The U.S. government should not delay implementation and must start working with key stakeholders to advance this initiative and achieve improvements in industries. A crucial initiative should create more opportunities for non-defense domestic companies and allies to help address industrial base deficiencies. For example, America’s latent automotive industrial strength was once tapped tobuild aircraftand armor.
Allies & Partners
The U.S. has historically relied on allies to address its deficiencies in domestic mining, processing, and refining of raw materials essential to national defense. In 2021, Australia, the United Kingdom, and the U.S. established an “enhanced trilateral security partnership,” more commonly known as AUKUS. It aims to “promote deeper information sharing and technology sharing; and foster closer integration of security and defense-related science, technology, industrial bases, and supply chains.” AUKUS Pillar One enables Australia to develop nuclear-powered attack submarines. Pillar Two ensures interoperability through technology sharing, including artificial intelligence, hypersonics, electronic warfare, and command-and-control systems. Recent remarks by President Trump reaffirm his ongoing support for this partnership and the need to expedite deliveries. However, without substantial investments from all three partners, submarine production will not accelerate enough to meet the required timelines. The U.S. needs to expand Pillar Two to strengthen workforce, supply chain, and infrastructure capacities that affect current submarine, joint platform, and munition production.
President Biden discusses AUKUS with Australian and British leadership. (Photo via Wikimedia Commons)
Expanding joint production overseas with allies and industrial partners is a way to reduce current capacity strain on combat platforms and munitions manufacturing; however, how it is implemented is crucial. For example, the F-35 Lightning II program shows poor use of allied co-production. The program is hindered by the aircraft’s complexity and by production delays caused by parts shortages, stemming from supply chains optimized for efficiency rather than capacity. Also, manufacturing was spread globally to encourage partner cooperation and sales. This model of co-production is a poor example to follow for similarly complex systems. A better approach is to focus on smaller programs and simpler systems, such as infantry fighting vehicles or munitions, prioritizing redundant capacity over efficiency. The joint ventures between Raytheon and the European missile manufacturer MBDA to produce Patriot munitions in Germany, and between Lockheed Martin and Thales Australia to produce Guided Multiple-Launch Rocket System missile components, are excellent examples. These show how leveraging local industrial capacity can help ease near-term strain on high-demand platforms, munitions, and combat components.
Growing Fleets
The shortage of U.S. shipyards and repair facilities presents a dilemma should a kinetic conflict with China occur in the Pacific. Although the U.S. prevailed in the wargame, the heavy losses in personnel and resources made it a Pyrrhic victory. The decline of shipbuilding in the U.S. is well documented and not the focus here. While this situation is concerning, there is some reassurance that many allies and partners, including Japan, South Korea, and Italy, maintain strong shipbuilding industries. The challenge with leveraging allies’ capabilities is that current law prevents the nation from purchasing warships from foreign shipyards. Title 10 USC 8679 states:
“Except as provided in subsection (b) [Presidential Waiver for National Security Interests], no vessel to be constructed for any of the armed forces, and no major component of the hull or superstructure of any such vessel, may be constructed in a foreign shipyard.”
Although Japan and South Korea have strong commercial and naval shipbuilding abilities, they are close to China and its vast arsenal. European countries, such as Italy, also have domestic shipbuilding capabilities that the U.S. could leverage to address this issue.
The President, members of Congress, and key stakeholders are doing their part to develop policies and legislation to address the shipyards issue. The recent executive order, “Restoring America’s Maritime Dominance,” directs actions to “ensure the Security and Resilience of the maritime Industrial Base,” including the use of Defense Production Act Title III and other investments to support the commercial and defense shipbuilding industries. Other congressional efforts include the bipartisan Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act (SHIPS Act), which aims to improve the nation’s ability to produce commercial ships and their related infrastructure. The bill “calls for the U.S. to add 250 ships within the decade to the international fleet of U.S.-flagged vessels…” Congressional support is crucial for expanding shipyard capacity and introducing new innovative manufacturing capabilities that allies possess. Reinvigorating commercial shipbuilding is a positive step that can create more jobs, which can then be used for military construction.
The shortage of qualified workers is affecting the nation’s shipbuilding and submarine-building industries. An example of these challenges is the Gulf Coast region’s 5,000-worker shortfallneeded to support new Navy contracts. Similarly, the Navy indicated that “workforce challenges and material shortfalls” are causing scheduling issues for refitting nuclear aircraft carriers. This lack of capacity now prevents the repair or production of ships at the speed and scale needed during wartime. The Biden administration and Congress sought to leverage the strengths of regional allies and partners to bridge these gaps.
Expand Overseas Maintenance
The Department began making some headway in addressing maintenance operations for ships and systems serving overseas. The 2024 Regional Sustainment Framework, which advocates forward maintenance, repair, and overhaul operations in allied nations rather than at home, is a first step toward addressing maintenance downtime. In the past, a damaged ship was brought back to a stateside government or commercial repair facility. Under this new framework, five regional sustainment centers will conduct maintenance and repair work in the Indo-Pacific, with European yards also considered. This is a positive first step that acknowledges modern capabilities and increased capacity of allies and partners, and can serve as a stepping stone to increase readiness rates, especially in the area of deferred maintenance by the U.S. Navy. The challenge with the recent maritime executive order, which focuses on rebuilding America’s naval and commercial shipping, is that it will take years to implement before stateside facilities can increase capacity to improve fleet readiness and expansion.
The U.S. readily acknowledges that Japan, South Korea, and Europe design and produce excellent warships. The development of the U.S. Navy’s Constellation-class Frigate Program is off plan, but the idea of using a mature, existing allied frigate design and modifying it slightly has merit, regardless of its implementation woes. Despite the program’s multiple challenges, the need for modern allied capabilities and capacity, especially in shipyards, remains.
The Next Steps
There is a compelling case for the country to involve allies and partners in co-production with direct investment and potential purchases of subsystems and components, given America’s current inability to recover from wartime losses. Recent comments from the White House show that the time may be right for this approach. According to media reports, President Trump stated, “…we may buy some ships from other countries that we’re close to and do great jobs with ships.” Recent analysts have proposed purchasingArleigh Burke-class destroyers from allies to expand the Navy’s fleet while rebuilding its own shipbuilding infrastructure. This is a politically sensitive position, as American shipyard workers, their advocates, and citizens would argue it is harmful to the U.S.
A Japanese Mogami-class frigate. Japan recently began exporting the design, with Australia signing a deal to acquire them. (JMSDF photo)
There are valid reasons for protecting the nation’s shipbuilding industry and its workforce. There is also the fear that foreign security services are gathering intelligence on technology, tradecraft, vulnerabilities, and the sabotage of overseas production. Times have changed, and if the nation were to face large-scale combat operations as described earlier, the ability to reconstitute losses must be realistic and viable. The U.S. government must lean forward and assist new domestic companies interested in entering the defense industrial base, while expanding existing critical infrastructure and cybersecurity programs for allies who can rapidly enable gains in weapon production, shipbuilding, and repair. Intelligence sharing—an Achilles’ heel in coalition environments—must also be streamlined and expanded to assist our allies and partners and capitalize on their existing strengths.
America’s ability to incorporate non-defense businesses into the war industry was a crucial factor in winning the production effort during WWII. Encouraging firms that can weld, cast, stamp, direct-mold injection, or produce glass to shift into supply chains for combat vehicles, missiles, munitions, drones, optics, and shipbuilding will quickly boost capacity. A racing company that specializes in Motocross can make parts for defense aerospace. An automotive dashboard supplier can adapt their direct-mold injection process to produce drone housings. Because of limited space, many U.S. shipbuilders are utilizing outside facilities to manufacture ship components and then transport them to shipyards for final assembly. This approach can be further improved by involving more non-traditional firms in the production of shipbuilding modules or components, and transporting these modules or components to shipyards for final assembly. Instead of bringing skilled labor to the shipyards, as was done during WWII, distributed manufacturing and on-site installation will expand U.S. shipyard capacity by leveraging dispersed resources. Such efforts can help revive a U.S. industrial core devastated by decades of deindustrialization, transforming Rust Belts into ‘Gold Belts.’
The way forward is to continue seeking direct investment from allies in areas where they have excess capacity. South Korean shipbuilder Hanwha Ocean’s recent purchaseof Philly Shipyard and its projected $5 billion investment are positive steps toward revitalizing a moribund commercial shipbuilding market and could lead to naval repair opportunities. Additionally, the Department must collaborate with the government and key stakeholders to secure a Presidential waiver to purchase ship components from important allies, such as Japan, South Korea, or Italy.
A logical next step is to seek assistance in building Navy fleet auxiliary ships. The outcomes of this initial step could lead to further agreements to purchase components for warships from allies and transfer them to U.S. facilities, where they would be fitted with the necessary weapons, information, and cyber systems to make the ships operational and secure. This assistance is a more acceptable option for the nation and would help speed up current delays in domestic naval shipyards. The Department could mitigate risk by deploying inspectors and personnel at overseas production facilities to help ensure security and maintain the integrity of the manufacturing process.
Allies and partner nations play a crucial role in helping the U.S. quickly regain its ability to produce combat platforms and essential munitions. The Commission of the National Defense Strategyadvised “allowing the Department of Defense to supplement defense production with procurement from allies and partners with advanced manufacturing capability and capacity.” The Department must follow this approach until U.S. industries can meet the country’s needs. China’s shipyards and factories far surpass U.S. capacity to mass-produce both weapons and commercial and military ships, and they are advancing in both sophistication and quality.
Conclusion
The U.S. defense industrial base has limited capacity to rapidly increase production in the event of large-scale conflict against a peer competitor, and global commitments further widen these gaps. The U.S. should consider seeking allied assistance by expanding DPA Title III funding and NTIB membership, thereby strengthening the industrial base both domestically and internationally through increased overseas joint munitions production. Production priority must focus on munitions with the highest demand signals during kinetic conflicts in the Indo-Pacific, ongoing conflicts in Europe, and in the Middle East. These steps will give the nation time to scale up its production capacity to a sustainable level. Not only will allied and partner facilities improve readiness and keep systems forward-deployed during hostilities, but their investments and expertise will also support the expansion of U.S. shipyards and maintenance facilities. Targeted procurement of components from key allies with superior capabilities and capacity will rapidly grow the fleet, facilitate victory, and reduce combat losses. Without these measures, the U.S. risks being unprepared if deterrence fails, jeopardizing American ideals and way of life.
Doug Orsi is a retired Army Colonel serving as an Assistant Professor at the U.S. Army War College with research interests in the defense industrial base, mobilization, and industrial preparedness. The views expressed in this article are those of the author and do not necessarily reflect those of the U.S. Army War College, the U.S. Army, or the Department of War.
Featured Image: Virginia-class submarine, USS Arkansas, under construction. (Photo via Wikimedia Commons)
Lt. Col. Craig Whiteside, (Ret.) PhD., joins the program to discuss the new book he co-authored with Ian Rice, Non-state Special Operations: Capabilities and Effects. Dr. Whiteside shares how to define and apply terms like “non-state” and “special operations, historical examples of this type of operation, their use by contemporary actors, and how the maritime domain plays a critical role in their success or failure.
Dr. Craig Whiteside is Professor of National Security Affairs at the US Naval War College resident program at the Naval Postgraduate School, Monterey, California. He is a research fellow at George Washington University’s Program on Extremism and the International Centre for Counterterrorism-The Hague. Whiteside’s current work focuses on the leadership succession and military doctrine of the Islamic State militant group, and he co-authored The ISIS Reader: Milestone Texts of the Islamic State Movement. His latest book is Non-State Special Operations: Capabilities and Effects. He is the 2022 winner of the U.S. Naval War College Excellence in Research Award.
