At any given time, the US Navy is legally  mandated to have at least 11 aircraft carriers in  

operation. On the day this video is uploaded, most  of those carriers are either docked or sailing  

just off the coast of the US mainland, at least  according to public data. For obvious reasons,  

completely up-to-date information on their  exact location is not shared. But these 1,000 ft  

floating warships are also not exactly subtle, and  in modern times, that's been part of their appeal.  

Two of the three carriers currently sailing  outside of US waters are in strategic locations  

adjacent to the South China Sea and the third  is located intimidatingly close to the coast  

of Venezuela. Even if they never see active  combat, they do send a certain message. However,  

regardless of their current location or mission,  every single one of these carriers all started  

life in exactly the same dry dock. On the 22nd of  July 2017, the USS Gerald R. Ford was officially  

commissioned at the Newport News Shipyard in  Virginia, becoming the latest carrier to enter  

the fleet, the largest warship ever constructed,  and coincidentally the most expensive as well.  

The raw volume of steel, the man-hour, and  cutting edge technologies that went into this  

ship certainly contributed to that price. But one  of the biggest factors of all was simply the time  

it took to get this vessel from the drawing  board to the ocean. The first steel plates on  

the vessel were cut back in 2005. And even after  the keys were handed over to the Navy in 2017,  

it took an additional 5 years before it went  on its first deployment in 2023. For almost  

20 years straight, this ship was worked on around  the clock by as many as 10,000 on-site tradesmen,  

technicians, engineers, and government auditors.  This process actually went on for so long that  

the company that eventually delivered the ship  technically didn't even exist when construction  

began. This shipyard in Virginia is currently the  only facility in the world authorized and capable  

of building US super carriers. In 2005 when  construction started this facility was owned  

and operated by Northrup Grumman ship building.  But in 2011 6 years in the ship building part of  

the company was spun off and established as its  own business Huntington's industry. The reason  

for that corporate breakup will become very  clear. But the important point for now is that  

this company owns the single shipyard that has an  effective monopoly on constructing these carriers.  

The shipyard itself is also only one piece of  the literal construction puzzle. Everything  

from the Bechtel nuclear reactors to the  evac jets vacuum toilet system were supplied  

by a collection of over 2,000 contractors,  subcontractors, and sub subcontractors. This  

web of suppliers has simultaneously become so  important and well organized that they formed  

what amounts to their own union. According  to their own website, the aircraft carrier  

industrial based coalition represents the  businesses that supply parts, equipment,  

and services for the construction and maintenance  of US naval aircraft carriers. This organization  

exists to lobby on behalf of all these military  contractors to make sure business remains steady,  

and they're not shy about highlighting that these  companies directly employ over 60,000 people in  

44 states. Now, I know what you're thinking.  military contractors, lobbying politicians,  

and not so subtly threatening thousands of job  losses if things don't go their way. That's not  

exactly shocking, is it? But the thing is, in  this case, it's also completely unnecessary. The  

mandate to have 11 operational carriers does not  come from the Navy itself. It was actually passed  

into law back in 2006 through the National Defense  Authorization Act. The original law actually  

called for no less than 12 carriers, but it was  reviewed down a year later to just 11 carriers  

as something of a compromise between budget  constraints and operational capabilities. Now,  

regardless of the exact number, this creates  a logical economic problem that you might be  

starting to notice. If price is a function of  supply and demand, then on the supply side,  

the US has one single supplier that has a monopoly  on building these vessels. And on the demand side,  

there's a legal mandate that the Navy must keep  a set amount of these ships in operation. It's  

seemingly the perfect storm to price gouge the  taxpayers, right? Well, the official line for the  

Department of Defense, the contractors, and the  lawmakers is that these strange market dynamics  

are actually working as intended. The complete  absence of competition is a feature and not a  

bug. But the US Navy is not the only fish in the  sea. And the quirkiness of carrier economics is  

best appreciated by the runnerup, which is trying  to achieve the same thing, but doing it in almost  

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head to storyblocks.com/micro or click the link  in the description. Once they're built, aircraft  

carriers are expected to stay in service for a  very long time. The USS Nimmitz is the lead ship  

of the Nimits class of carriers. The nine other  carriers that came after her were all based on  

roughly the same overall design. And as a general  rule, the name of the first ship in the class is  

what the class itself is named after. The Gerald  R. Ford is now the lead ship of the updated Gerald  

R. Ford class, which will slowly replace all of  the ships that make up the Nimttz class. However,  

this first Nimits class carrier, the Nimmits, has  now been in service for over 50 years. In that  

time, it's seen several modifications to update  its systems and perform routine maintenance,  

the biggest of which came back in 2001. It's a  common misconception that since these ships are  

powered by nuclear reactors, they never need  to be refueled. This unfortunately breaks the  

fundamental laws of physics. Even file material  can't create energy from nothing. Regular nuclear  

reactors like those in commercial power stations  are refueled every 18 to 24 months. According to  

the Department of Energy, nuclear naval vessels  like aircraft carriers and submarines can extend  

this cycle by up to about 25 years by using  highlyenriched weaponsgrade uranium. Now,  

this is actually a bit of a problem because the  US officially stopped producing this stuff back in  

1992 after signing the nuclear non-prololiferation  treaty. To get around this, the Department of  

Energy has taken the fuel out of dismantled  nuclear weapons and stored it away to slowly  

go into these ships as it's required. It should  hopefully go without saying that this refueling  

process is done very carefully in the only  facility authorized to handle these operations,  

the Newport News Shipyard. When the Nimmits went  in for refueling back in 2001, it was pulled apart  

and rebuilt in a modernization process to keep it  in service for another 25 years. which brought it  

through to today. The ship is now scheduled to  finish its final deployment no later than May  

of next year, at which time it will be handed back  over to Newport News Shipyard for decommissioning.  

Given that these ships are filled with top secret  weapon systems and nuclear reactors, they can't  

be scrapped on the beaches of India like most  other merchant vessels. The decommissioning and  

defueling process will take about an additional  decade in total, and that's optimistic.  

For the first 5 years, the Nimmits will be kept  here in dry dock 11, right next door to the John  

F. Kennedy that will replace it in 2027, bringing  the Navy back up to the mandated 11 carriers. The  

reactors and engineering systems will be carefully  pulled out and discarded before the hull is then  

towed up to the naval inactive ship maintenance  facility in Philadelphia to await traditional  

scrapping. The reason why the decade time frame  for decommissioning is optimistic is because the  

ship that came before the Nimtt, the former John  F. Kennedy was taken out of service in 2007. And  

it was only earlier this year that the process  of cutting the ship apart for scrap began when  

she was sold from inventory in the Philadelphia  holding yard. This old carrier was sold for one  

single cent to International Shipbreaking Limited  to be taken apart in their yard in Brownsville,  

Texas, about 2 miles from the Mexican border. Now,  to be fair, at this point, the former carrier was  

effectively a hollow floating metal box. But it  was still filled with tens of millions of dollars  

worth of scrap metal. The reason why it was sold  off for just a single penny is because even when  

cutting these ships up for their metal, it still  needs to be done within the USA. And the USA is  

simply not a hot destination for most other ship  scrapping because the process usually relies on an  

army of low paid workers operating with no safety  standards and no regard for the local environment.  

All of this means that, yep, you guessed it,  there's only one shipbreaking yard in the world  

that's authorized to scrap these ships, and it's  this one right here in Brownsville, which in turn  

means there wasn't much competition in the bidding  process. In fact, while we were putting together  

this video, we were actually able to submit a  foyer request to get the classified footage of  

that auction released. How much my bid for item  751? 751. Nothing. No bids for item 751. A buck.  

sold for a luck. Unfortunately, this historically  accurate recreation of that event accidentally  

depicted a price 100 times higher than they  really paid. But you get the idea. Today's modern  

carriers are built with a similar service life  in mind. They're taking 20 years to construct,  

5 years to refuel, 20 years to fully take apart  with 50 to 60 years of operation in between.  

What this means is that ashes to ashes, these  ships are going to be a major economic commitment  

for near as makes no difference 100red years.  This presents a planning challenge because it's  

a matter of national security that capacity and  expertise is always available to build, refuel,  

service, and decommission these vessels. The  problem this represents is that these are not  

normal ships. And even if they were, regular  American shipyards are all but extinct anyway.  

Private for-profit companies simply  do not operate on centuries long time  

frames. They need regular revenues and so  does their workforce or they're all going  

to move to another industry. Between 11 carriers,  there's only enough consistent work to keep one  

shipyard operating continuously. If the government  wanted to offer these contracts to a competitor,  

it would need to prove to investors that a new  highly capital-intensive shipyard was worth  

investing in. And the only way it'll be able to  do that is by offering even more contracts to  

give those investors a reliable return on their  investment. In fact, even with just one shipyard,  

a shipyard that holds a monopoly on this  industry, the true financial value of this  

business is not as clear as you might think.  The reason Northrup Grumman spun off and sold  

the business was because it required such large  investments into infrastructure that it simply  

wasn't worth it to them to keep. Which might  not make much sense, but think of it like this.  

This would be kind of like if you had a successful  business selling cakes out of your corner store.  

You made a healthy and reliable profit of around  $100,000 a year running your little bakery, but  

you needed to spend half a million dollars on new  ovens, and your store itself was worth $5 million.  

You might have a good business, but it just makes  more financial sense to sell up and reinvest that  

money into something that could make a higher  return. in their submission to the SEC before  

selling off their ship building business. This is  effectively what Northrup Grummans said. Today,  

they are still a major contractor to the carrier  program, but they supply far more high margin and  

competitive technical components rather than  just the big metal box itself. For the current  

shareholders in Huntington Les Industries, the  return on investment is not as high as something  

like a tech stock, but it's very consistent,  a lot like a government bond because, well,  

it kind of is. Now, I know what you're probably  thinking. The Department of Defense should not  

be concerned with the financial performance of a  private company. And you're probably right. But  

the same kind of economic decision-making happens  for the workers as well when they're choosing to  

undertake the rigorous training and background  checks required to get a job working on these  

ships. People are happy to go through these hoops  for an above average and consistent paycheck. But  

if that work consistency can't be guaranteed,  then it becomes much harder to maintain this  

workforce and their highly specialized skills.  The US Navy can't go anywhere else to procure  

their aircraft carriers, but the Newport News  shipyard also can't go anywhere else to sell them,  

so they kind of need each other. Additionally, for  what it's worth, Congress does at least pretend to  

have some negotiating power by simply highlighting  that it could just order fewer carriers in total.  

They have said the law at 11, but that's after  they reduced it from 12. and every year they stand  

over hi and tell them to pray they don't alter  the deal further. When Congress was approving  

the purchase order for the new class of aircraft  carriers in the production pipeline, the idea of  

reducing the number of acquired carriers to eight  was seriously considered. The floated idea was  

to substitute the missing three super carriers  with six light carriers that didn't have nuclear  

reactors and therefore wouldn't need to be built  in the highly specialized Newport News shipyard.  

The idea was pushed back against heavily  by naval leadership who claimed that their  

capabilities were already stretched, which of  course they always will be because nobody wants  

their budget cut. Now, the thing is, even if  this plan did go ahead, it may not have changed  

the underlying economics much anyway. Even light  carriers are still big ships that would be roughly  

comparable in size to other similar vessels  from France, the UK, or Italy. Within the US,  

there are still only two yards that can produce  naval ships this big. Newport News in Virginia  

and the Pascula shipyard in Massachusetts, which  is also owned by Huntington Les Industries. So,  

even if the Navy did allow their fleet to  be reorganized to allow for more negotiating  

leverage, the shipyards would still be competing  against themselves. It's a system that's worked  

well enough for the last 70 years to not really  bother with any major shakeups, but that capacity  

is once again coming under scrutiny by a new major  power that's becoming a legitimate rival by doing  

almost absolutely everything differently. Now, the  internet doesn't need another armchair admiral,  

so we won't be assessing their comparative  war fighting capabilities. But realistically,  

China is currently the only major power on Earth  that would come close to rivaling the USA on the  

oceans. So what is interesting is the industrial  system they've built up to support their rapidly  

expanding naval power. China's overall ship  building industry is now 200 times larger than the  

USA's. In just the last 20 years, shipyards like  Changqing on the outskirts of Shanghai have been  

built from the ground up and are now individually  producing more ships than every shipyard in  

America combined. Now, most of this ship building  is commercial freighters and container ships,  

the kind of merchant vessels that we would usually  hyper-fixate on on this channel. But the thing is,  

ships are ships. And while a modern aircraft  carrier is far more advanced and highly engineered  

than a container ship, they still require the  same general expertise and facilities. Enormous  

dry docks, modular construction techniques,  supply chains, and a large roster of naval  

workers all support an industry that can crank  out more ships than any other country in history.  

This facility back in Shanghai spends most of its  time producing commercial ships for export. But it  

was also responsible for producing the country's  third aircraft carrier, which officially entered  

service just last month. The irony is that this  shipyard, which is primarily producing private  

vessels, is government owned under the China State  Shipbuilding Corporation, while the Newport News  

shipyard in America, producing exclusively  naval vessels, is privately owned by HII.  

What this allows China to do is diversify their  carrier program across dozens of potential dual  

use shipyards. Because in the time that these  facilities are not building carriers or other  

warships, they can then just go back to building  regular merchant vessels for a profit. Giving  

these yards operational stability that doesn't  rely on constant financial life support from the  

military. China's immense industrial capacity  also means that even economically they are hard  

to beat. Their merchant ships are now cheaper than  their only real rivals in South Korea and Japan.  

If you ever wanted proof that economics always  wins, the Taiwanese shipping company Evergreen  

currently has several ships under construction  in the same shipyard building Chinese warships.  

Chinese warships they are threatening to use  to invade Taiwan. Now, to put things back  

into perspective, even with this far larger  and more flexible ship building capacity,  

I've done the math here, and three carriers is a  smaller number than 11 carriers. What's more is  

that by their own acknowledgement, these Chinese  ships do not compete with the American ones, but  

they're quickly catching up. This latest carrier  to come out of China was built in just 7 years and  

fully entered service in less than 10. Their first  nuclear carrier is predicted to enter service in  

2030 and in a protracted conflict with China  could simply outproduce the USA by 10 to one.  

Hopefully this never happens, but it does raise  the question of why the USA let itself fall so far  

behind on ship building in the first place. It's  a great question which you can get the answer to  

by watching this video next. And don't forget to  subscribe for more micro stories with big impacts.