Mismatching Strategy / Funding to Reality

(Note - I have been drafting this all day and had no idea how timely it would be in light of the Iranian drone strike on Israel…)

Recent events in the realms of worldwide shipping and Middle East terrorism have spurred news stories and commentary among those who follow the military -- the Navy in particular -- that reflect what can objectively be termed a glaring mismatch between military plans for future battles and reality as it is unfolding in Ukraine, the Middle East and domestic ports in the United States.

Current Events in a Nutshell

Current events over the past four years have served as an unescapable lesson to citizens around the world in the criticality of worldwide shipping to modern economies. The COVID outbreak in 2000 created instant shocks in the supply of goods as lockdowns crippled manufacturing across the globe. COVID also created instant spikes in demand of other goods as they became popular for work-from-home, etc which could not be instantly satisfied due to overseas labor lockdowns and normal shipping delays which became far longer as longshoreman and trucking labor became overutilized.

Current events also include multiple incidents where accidents have crippled or threatened to cripple crucial waterways. In March 2021, the container ship Ever Given drifted slightly while traversing the Suez Canal, ran aground and blocked all traffic through the canal between the Mediterranean and Red Seas for six days until it could be pulled back into the channel. On March 26, 2024 a container ship leaving the port of Baltimore lost propulsion and collided with a pylon of the Francis Scott Key Bridge, triggering a collapse of three spans into the water and blocking the port's main channel indefinitely. That ship was exiting the port without tugboat assistance. On April 5, 2024, the container ship Qingdao was exiting the Staten Island port in New York with three tugboats aiding its course and also lost power. The crew was able to bring it to a halt before striking the nearby Bayonne bridge but three additional tugboats were required to keep the ship away from harm.

And then there's piracy, terrorism and war. Houti rebels with financial backing from Iran have been attacking ships off the coast of Yemen since the Hamas attack on Israel in October 2023. Pirates operating out of Somalia have also attacked roughly twenty ships since the Hamas attack as well, after such attacks had been rare since a rash of them in the 2008-2014 timeframe. Meanwhile, as a consequence of the war between Russia and Ukraine, experts estimate that a third of Russia's fleet operating in the Black Sea has been destroyed or rendered inoperable by Ukraine, a country which has no navy whatsoever and few fighter jets. By Ukraine's count, that's twenty four ships and one submarine.

And late breaking news, on April 13, 2024, Iran launched roughly one hundred drone strikes against Israel in retaliation for Israel's bombing of the Iranian embassy in Damascus, Syria on April 1, 2024. Is this a massive escalation in tensions between the two countries who have already been fighting each other indirectly through Hezbollah and Houthi terrorist proxies for years? It won't be clear for several days at a minimum. Iran's ambassador to the UN issued a tweet (confirmed for authenticity by Iran's state media) that the attack was in response to Israel's bombing of the embassy in Syria and that this set of one hundred drone flights constituted the extent of Iran's response to that incident, UNLESS Israel responds with another attack.

Commentators have already noted that backdoor conversations have been going on between all parties in the region since the April 1 attack as if all recognize a full scale war serves no purpose but that internal domestic political pressures must still be placated. The Iranian tweet could be taken as more dialog from that conversation. Okay, you bombed our embassy, we didn't like that and our elders are furious and demanding actions so why don't we agree we'll send a bunch of drone flights your way in a couple of days, we'll make a statement announcing our defense of Iranian interests and death to Israel and you can huff and puff for a few days as well but that's the end of it, WE'RE EVEN for now, right?

This might fly within Iran but it is not clear if it will fly in Israel. On April 10, 2024, Netanyahu learned that Hamas cannot find forty remaining hostages after that number became a negotiating point on opening new aid paths into Gaza and altering the military posture against the territory. If Hamas never had control of all of the hostages and / or if some (all?) of the remaining hostages have been killed, that drastically reduces any incentive for Netanyahu to lower pressure on Hamas and Gaza in general since he has nothing to provide his own political base as compensation for de-escalating. If that same base doubles down in supporting Netanyahu in response to the first known direct attack on Israel directly BY Iran FROM Iran, then Iran's attack will be a terrible mis-calculation with huge military implications, especially for the US Navy's workload in the region.

Naval Logistics

As of 2024, the US Navy has a total of 470 ships, including 100 reserve ships capable of hauling cargo or fuel, 238 commissioned ships (USS) and roughly 132 non-commissioned (USNS) vessels. Many of these ships are thirty years or more in age or design. The combination of physical operating conditions for ships and crewing considerations for those aboard creates a crucial dynamic for long term planning of naval capabilities and capacities. That dynamic can be oversimplified somewhat down to a simple rule of thumb -- DELIVERY of some arbitrary capability X on a continuous basis in any arbitrary location actually requires the BUILDING AND OPERATION of 3X that capability. Why?

Ships aren't built for one billion dollars then "consumed" as a declining asset until skuttled. Ships require nearly continual maintenance to combat rust and wear and tear. Ongoing operations aboard a deployed ship are mentally and physically taxing for the crew so a single ship cannot be deployed indefinitely wihout burning out the crew. That requires rotation with an equivalent vessel and crew so one is always deployed and one is always at port. But ships also require extensive overhauls every 3-5 years which may take 1-2 years of downtime. That means a third vessel and crew is required in rotation in order to wield that X unit of capability.

Because of the, ahem, UNIQUE capabilities of naval vessels, they are not commodity products being made in large numbers by shipyards or being operated by cookie cutter crews with common training that fits every vessel. Naval ships and submarines are instead, by definition, maybe "five of a kind" designs with unique power plants and handling characteristics that require extensive training and ongoing hands-on exposure to maintain skills for operating and repairing them. The unique nature of the ships and the skills of the crews operating them results in a unique "inertia" effect that must be taken into account over the entire life of the ship. Fluctuating funding for construction, repairs, retrofits and crewing is not conducive to extracting maximum value from these ships. Wide variations can result in lost construction skills (raising costs for more units), lost repair / retrofit skills (increasing downtime and increasing operating tempo on remaining ships) and attrition with crews (reducing readiness and availability).

The Navy Has a Plan

The Navy understands this "lifecycle inertia" problem and continually updates a long-term plan that it uses to rationalize priorities internally and share those priorities and rationales with Congress and with contractors. The Navy can plan all it wants but even if those internal plans and rationales are flawless, those plans are still subjected to competing priorities from Congress and the effects of profit-seeking contractors. The most recent thirty year plan was released by the Navy in March of 2024 and can be viewed here:


(It's interesting to note that as part of a government effort to divulge paperwork costs in an attempt to encourage administrators to stop requesting expensive, useless reports, the title page of this report dutifully states this report cost $216,000 to prepare.)

To give its intended audiences a better understanding of the choices reflected in the document, two different plans are actually presented. One could be termed the Navy's ideal ask, the spending it recommends in a perfect world where the only considerations are the defense of the nation and their impacts on ensuring equipment and personnel needed to meet those demands. The other plan could be termed the real-world ask, where the Navy is attempting to reflect how it should prioritize spending when it know it won't get it's perfect-world funding and needs to cut corners.

The key recommendation in the plan that has generated the most discussion is the plan to decommission nineteen ships, with ten of the nineteen selected being decomissioned before reaching their previously estimated end of service life. In the Navy's view, these choices reflect a scenario where the capability of these ships discounted by their downtime is being dwarfed by the cost of ongoing maintenance and the existence of other alternatives wth lower costs and higher lethality.

That's a pretty dry way of stating the Navy's rationale and at that very general level of detail, the suggestions seem logical. However, the details behind some of the ships selected hint at much larger problems. Two of the nineteen ships targeted for early retirement are not some of the oldest ships (by design or construction) in the fleet but some of the newest. The Navy's Littoral Combat Ship (LCS) program originated in 2002 when a US Admiral attended a demonstration of a Danish ship and thought he had a brainstorm for a flexible ship that could operate in littoral ("near shore") waters and allow different weapons systems to be bolted on deck as if the ship were a giant transformer toy.

This Admiral, Vernon Clark, had no background in ship design or ship building but began pushing his idea of a ship capable of speeds up to 45 knots and obtained funding for a program to build two competing prototypes, later dubbed the Freedom variant (built by Lockheed Martin and Marinette Marine in Wisconsin) and the Independence variant (built by General Dynamics and Austal in Alabama). After twenty years, both designs have proven to have crippling design and reliability issues, all resulting from the absurd top speed expectation. The engines and transmissions fail at astonishing rates and the ships saved weight by omitting flooding protections around critical equipment, drastically increasing the likelihood of having to abandon ship if the hull is breached.

As another example, beginning in 2015, the Navy launched a program to modernize some of its existing Ticonderoga class cruiser ships to extend their useful life by a promised five years, allowing use until 2030. This extension was deemed necessary because related plans to design and launch brand new replacements were far behind schedule and new ships were not arriving in time to replace those reaching their previously identified end of service life. Unfortunately, Navy administrators didn't thoroughly inspect the existing cruisers before obtaining funding and letting contracts with vendors to do the work. The seven ships eventually targeted by the program were in FAR worse shape and required FAR more work than covered by the funding and contracts. Now, in 2024, some of the selected ships sat idle for nearly six years, crews were reduced and personnel reassigned. As of 2024, work on the USS Vicksburg assigned to BAE Systems has still not been completed, over $500 million dollars has been spent just on that one ship and the Secretary of the Navy has testified to Congress that the USS Vicksburg and USS Cowpens will likely never see another deployment. Only two of the seven ships have completed renovations at a cost of $2.4 billion dollars.

In 2022, the Navy determined four of the original targeted ships were simply beyond the point of practicality to spend money attempting to refurbish them. It began submitting plans reflecting their retirement, only to have Congress push back demanding the ships be kept active. This seems to be a classic "sunk cost" related fixation on Congress which is demanding the Navy get more life years and operational tours from these ships after spending $2.4 billion. But of course, willing that to happen by forcing the Navy to keep something it cannot refurbish or even crew at this point does nothing to bolster defense. It is literally setting money on fire with zero benefit provided to anyone... Well, almost anyone. The contractors will continue lining their pockets by doing work the Navy will probably never quality check since it has zero plans to actually use the ships. The politicians in Congress can continue claiming they support a larger Navy, even if some of the ships in that count cannot leave shore.

The Mission! Remember the Mission?

The saga of the Ticonderoga cruiser class retirement and the failed Littoral Combat Ship (LCS) program are prime examples of looming problems caused by the intersection of incompetence, corruption and politics involved with trillions of dollars of spending on the military. As mentioned earlier, the Navy's 30 year plan references an "ideal world" plan and a "real world" plan to help explain to the audience HOW planners attempt to balance pie in the sky asks with reality. Of course, in such a technical, expensive domain with so many inertial effects, both science and art are involved in deciding which corners to cut to meet near-term needs without crippling longer-term needs which are likely unrecognized by most participants in the process.

The triangle between administrators, contractors and politicians makes this balancing act far more difficult and more subject to gaming by all the parties. Military and civilian leaders in the Pentagon want to hide their incompetence for suggesting a failed weapons program in the first place or allowing it to mushroom in expense. Contractors want to delay recognition of cost overruns and continue profiting off lifecycle expenses even if the weapon system involved won't ever see combat. Politicians want to avoid responsibility for their lack of oversight while also appearing "strong on defense" or appearing to protect hometown jobs or at least American jobs.

Of course, none of those concerns have anything to do with THE MISSION. Remember the mission? Protecting open waters for worldwide shipping to support free trade? Providing defense for allies? Making the world safe for iPhones and Hyundais?

More importantly, none of those concerns seem to reflect a shift to technologies and battle strategies that reflect modern day political and technology realities. Ukraine has been leveraging drones literally made out of CARDBOARD that might cost $3000 each for its attacks on Russian assets in Ukraine, in Russia and in ports. When a tank might cost $4 million dollars and a battleship might cost $100,000,000, that level of cost asymmetry between asset and threat requires a complete re-think of the mechanisms used to project force. Current events seem to indicate the US doesn't need another $13 billion dollar Ford class nuclear aircraft carrier filled with 90 fighters costing $82,500,000 each. We would be better off building 20 "drone carriers" costing maybe $500,000,000 capable of launching five Predator drones costing $99,000,000 each and 200 throwaway drones costing maybe $40,000 each. Total cost comparison?

   Ford carrier approach = 1 x $13 B + 90 x $82.5 M = $20.425 billion
Drone carrier approach = 20 x ($500 M + 5 x $99 M + 200 x $40k) = $20.060 billion

Despite the similarity in cost, the "drone carrier" approach would provide twenty times the "presence" across the globe as a single Ford class carrier. And it would require far smaller crews for the twenty smaller ships than the gigantic Ford class carrier and would require ZERO pilots on board and far fewer pilots to control the drones.

Macroeconomic Impacts

Because of the complexity of these weapons, their lifecycle costs over decades and their impact on worldwide economic activity and national security, the macroeconomic impacts of any plans for maintaining and refreshing these capabilities are vast. The collapse of the Key bridge is expected to close the port of Baltimore for at least four months and a conservative estimate of the daily cost is around $15 million dollars in direct economic activity or $1.8 billion dollars over the anticipated four month shutdown. And the port of Baltimore is #17 on the list of busiest ports in America. Imagine the economic damage from an obstruction at a bigger port resulting from an active war or terrorist attack. Failing to develop and maintain a strategy for combating piracy in shipping lanes in the Middle East could result in those routes being abandoned entirely, spiking prices of goods worldwide, triggering more inflation.

If major changes ARE made to weapons system procurement plans, those changes will have a massive impact on different businesses, likely slashing revenues at traditional ship building firms and related secondary companies while boosting them at firms specializing in aeronautics, avionics, materials science and smart munitions. Those shifts in revenue will also impact communities dependent upon the current mix of military spending.

Most optimistically -- or naively -- major changes to weapons system procurement plans could allow for a vastly higher ratio of applied lethality to cost, allowing equivalent or better military capabilities to be provided for orders of magnitude less cost, reducing deficit spending that is impairing the larger economy.