A report has been raised in the U.S. Congress analyzing that half of the amphibious combat ships owned by the U.S. Navy are impossible to deploy due to poor maintenance and repairs. This year, Hanwha Ocean has consecutively secured two U.S. Navy vessel maintenance, repair, and overhaul (MRO) contracts, signaling South Korean shipbuilders' full-scale entry into the U.S. naval MRO market. Starting with non-combat ships, they plan to gradually break into the highly protected combat ship MRO market.
According to the shipbuilding industry on the 13th, the Government Accountability Office (GAO), under the U.S. Congress, concluded in a report released on the 3rd that as of March this year, half of the 32 amphibious ships owned by the U.S. Navy are in such poor condition that they cannot fulfill their expected service life. The U.S. Navy is required by law to maintain at least 31 operational amphibious ships. However, due to inadequate timely maintenance, a significant number are not in a condition suitable for operational or training deployment, according to the GAO.
The U.S. Navy has previously not performed maintenance on aging amphibious ships slated for disposal, citing expense reduction. However, delays in the introduction of new ships have forced the continued use of older vessels. This is not just a problem for amphibious ships. The U.S. is facing difficulties in vessel maintenance due to a collapse in shipbuilding. Among the more than 370 vessels operated by the U.S. Navy, 130 to 150 vessels must visit shipyards annually for repairs, but maintenance work is not being completed on time due to outdated facilities and a labor shortage in the shipyards. Delays in ship maintenance have caused significant operational gaps. There are analyses suggesting that when President-elect Donald Trump spoke with President Yoon Suk Yeol on the 7th of last month, he noted the need for close collaboration between the two countries not only in ship exports but also in the MRO sector, driven by concerns over the weakening of U.S. military power.
As the U.S. seeks MRO support from partner countries, domestic shipyards are ramping up efforts to secure contracts. The scale of the U.S. Navy's MRO operations is reported to exceed 20 trillion won annually. Industry expectations suggest that the issue of the U.S. Navy's shortage of maintenance shipyards will not be resolved quickly, leading to a continuous increase in overseas maintenance contracts.
Hanwha Ocean secured two MRO contracts for U.S. Navy vessels this year alone at three-month intervals. In August, it became the first South Korean shipbuilder to win the MRO contract for the U.S. Navy's logistics support ship, the USNS William McLean. Less than a month after obtaining eligibility to participate in MRO contract bids by signing an MRO Support Agreement with the U.S. Navy's Logistics System Command, it successfully secured the contract, earning attention. Three months later, in November, it also won the contract for the scheduled maintenance of the replenishment ship USNS Yukon, which is assigned to the U.S. Navy's Seventh Fleet. Maintenance work is currently ongoing at the shipyard in Geoje, Gyeongnam Province.
All the MRO ships secured by Hanwha Ocean are non-combat ships. The domestic shipbuilding industry, like the amphibious ships mentioned by the GAO, is looking toward the U.S. combat ship MRO market in the long term. There are many combat ships, and the scale of their maintenance is large, which means profitability is high. However, under U.S. law, it is a principle that combat ships are maintained only in the United States.
There are observations that Hanwha Ocean's acquisition of the Philadelphia shipyard in June is also aimed at the U.S. combat ship MRO market in the long term. Hanwha Ocean plans to finalize the acquisition process, obtain an MRO license, and use the site for conducting MRO operations on vessels. A representative from Hanwha Ocean stated, 'If trust is built in MRO for non-combat ships such as logistics support vessels, it will be possible to advance into the combat ship MRO market.'
HD Hyundai Heavy Industries plans to pursue the U.S. Navy MRO business in earnest starting next year. Like Hanwha Ocean, HD Hyundai Heavy Industries signed an MRO Support Agreement with the U.S. Navy in July. A representative from HD Hyundai Heavy Industries said, 'We will start MRO operations in the field of non-combat ships to build mutual trust and then gradually proceed to combat ships.'