As the old saying goes, freedom is never free. The US Navy has certainly stuck to that motto
since it costs a whopping seven million dollars per day to operate a carrier strike group.
That price tag is so huge that the same strike group of one aircraft carrier,
three destroyers, one cruiser, and a submarine could purchase two new destroyers every year.
But why does it cost so much when the ships and aircraft have already been paid for?
Before answering that question, we first need to deep dive into where that figure of seven
million dollars per day originated. To be clear, it includes the whole strike group, not just
the aircraft carrier. Additionally, the carrier air wing attached to the carrier is included in
that figure, along with the roughly 6,700 men and women required to operate all of that equipment.
The figure also encompasses the entire life cycle of the strike group. The Optimized Fleet Response
Plan, known in Navy lingo as the OFRP, is the standard plan that the Navy uses to get a ship,
including aircraft carriers, from maintenance availability in a shipyard through a training
cycle and its deployment. Once a ship returns home from deployment, it enters the yard period
to start the cycle again. The whole process takes about two and a half to three years to complete.
This matters in determining costs because each part of the OFRP brings unique expenses to each
part of a ship's life. So when analysts calculated this number, they averaged out
the operating costs for a carrier strike group spread across the entirety of its life cycle.
Once a ship returns from deployment, the ship's company and contractors must do a lot of work.
After all, a massive chunk of metal full of electronics and sensitive, high-tech gear degrades
rapidly in a saltwater environment. As anyone who has ever been on a ship will tell you, things are
constantly breaking, leaking, rupturing, or being degraded simply because of water, humidity, heat,
cold, and other environmental and human factors. Because of this, ships frequently need a ton of
work to get them back up and running to how they were originally built. The work to do
this happens in shipyards. These facilities are primarily privately owned and have built up a
reputation as the providers of marine equipment and repair services for the Navy for decades.
Though there are a handful of major players like BAE, MHI, NASCO (pronounced nass-co), and Vigor,
these companies rely on literally thousands of different sub-contractors that work underneath
them. Because the Navy just awards the contract to the lowest bidder, these companies are constantly
pressuring their sub-contractors to give lower and lower estimates for the work.
Once one of these large companies wins the race to the bottom, that is, government contracting, the
Navy then awards the contract, and the ship moves into the shipyard to start the repair process.
Sounds easy, right? Well, not quite. Remember all those sub-contractors?
They all want to get paid a good wage too. After all, it has become the industry standard for
shipyard companies to underbid work contracts purposefully. Once work has started, these
companies often jack up the prices so they can still pay their sub-contractors, who do most of
the work. The Navy gets stuck with the bill since they have already signed the contract, and to buy
out of the contract, along with the wasted time in picking someone else, would be more expensive
than just paying the company what they want. Another way shipyards artificially inflate prices
is through discovering new work or picking up jobs the ship wants. This happens when work is being
done, and the Navy wants to increase the scope of work, or more damage than expected is present.
These changes are not as nefarious as purposefully jacking up the prices but frequently happen.
Work can also be added when the Navy wants to add jobs that the original contract did not specify
the company to do. These contract changes often happen since companies bid on the high-ticket
jobs that make the most money. Less expensive jobs often get left out, and if the Navy wants
the work done, it must petition the government for approval, paying the company for more work.
As you can see, repairing ships is quite inefficient and has plagued the Navy for decades.
However, because the Navy has mostly moved away from its own shipyards to commercial shipyards,
this small group of robber barons have created a monopoly and forced the Navy into a tight spot.
These considerable costs and time overruns contribute significantly to the money it takes to
maintain a strike group. Top Navy officials have blasted the industry for years with little change.
Once one of these ships finally gets out of the yards, their training cycle starts.
The training cycle consists of three separate phases that focus on developing the skills of the
individual ships and then slowly building them up to work together for when they are deployed. The
ships get underway frequently for various training and inspection events throughout this entire time.
During this time, one of the highest costs is fuel. The military spends
about 20 billion dollars annually on fuel, and the Navy takes about a fifth of that
amount. Though the aircraft carriers and submarines are propelled by nuclear power,
the rest of the strike group and its aircraft need fuel.
Unlike the shipyards, the Navy has a good handle on keeping its gas bill low. Every 18 months,
the Department of Defense projects out what fuel prices will be and then sets that as
the government rate that the Navy will pay for fuel. This method helps the Navy in several ways.
Firstly, it protects the Navy from huge swings in the market. Though most of the country has felt
pain at the pump in 2022, the Navy has still been paying low prices for fuel since the Navy
locked in its rate over a year ago. By doing this, Navy leadership is able to budget more efficiently
and keep the price it pays for fuel low. However, though the Navy can save money by keeping a firm,
fixed rate for gas, it loses so much more money as a result of its degraded logistics arm.
Even though a carrier strike group is enormous with a lot of capacity to carry fuel, food,
supplies, and ordnance, there is only so much space on board. Because of this, the Navy relies
on a combination of bases and logistics ships to carry its beans, bullets, and gas to far-flung
places around the globe. The only problem is that the Navy has had a hard time doing so over the
past several years, and it has only worsened. At the end of the Cold War, the Navy shut down
a lot of forward-deployed logistics bases along with decommissioning or selling off
a bunch of fleet logistics ships. This was because the US Navy was the world's number
one uncontested superpower on the ocean, and no one was even close to catching up.
The problem with that logic was that the Navy in the 1990s did not anticipate countries
like Russia and China ever having navies that could even match, much less possibly surpass,
US naval dominance. As a result, the number of logistics bases and ships has continued to shrink
due to no significant danger to ships deployed during the war on terror. The Navy actively
prioritized frequent deployments at a higher cost since the Navy shifted to the spoke method.
The spoke method of resupply is where fleet concentration areas such as Norfolk, VA,
San Diego, California, Guam, and Bahrain serve as the central hub from which oilers,
supply ships, and contracted commercial aircraft pick up fuel, supplies, and parts.
These ships and planes must travel huge distances to get where they are needed.
For example, for a fleet oiler to resupply a strike group in the Middle East with fuel,
it would have to go to Rota, Spain, or maybe even Norfolk, VA, to refuel
and then head back into the fight. As for parts, the Navy frequently contracts commercial air
suppliers to bring them to locales worldwide. Doing so is incredibly expensive since the Navy
simply does not have the airlift capacity of the Air Force to transport all of its own material.
The Navy is forced to do this because basing rights where they could preposition fuel,
ammo, and food is hard to come by. Getting an operating agreement with a country to
pull into to resupply is much more complicated than you think. After all, the port must first
be able to accommodate Navy ships, which many don't, and these negotiations often take years.
Even when the US gets basing rights, the market to support these ships is very
limited in foreign countries. Think of the Fat Leonard Scandal as an excellent example
where the Navy was forced to choose Fat Leonard's company because it was the only one that offered
everything they needed. As a result, he was able to overcharge the American government.
Though this is an extreme example, it’s not far off the mark where the Navy is forced to
pay whatever price local governments or companies want since the alternative is much more expensive.
Other factors increasing the logistics costs include the fact that there are very few American
merchant mariners left. These professional sailors are the only ones that resupply strike groups
normally. Because there are so few mariners and so few ships, these people charge a premium for their
work, and the US Navy is legally bound to accept the work since they have to be supplied by them.
However, the costs of merchant mariners have started to go down since Congress and
the Navy have started to place of focus on the logistics arm that helps supply the US fleet.
Both these entities have committed in recent years to procure more logistics ships,
more expeditionary basing ships, more basing rights, and rebuilding the American merchant
marine. The only problem is these changes will take up to two decades to be fully implemented,
so in the meantime, the Navy will continue to pay high costs to resupply its ships.
One of the last significant reasons strike groups cost so much to keep out at sea is their reliance
on aircraft. After all, the centerpiece of a strike group's combat power rests with its
carrier air wing. However, it’s costly to maintain these state-of-the-art aircraft.
The average pilot must fly about 32 hours per month during the training cycle to maintain
proficiency. This is because landing on the moving deck of an aircraft carrier is a very depreciable
skill, and any little mistake can have deadly consequences. Once the strike group is deployed,
the pilots need to maintain almost forty hours of flight time per month at a minimum
to maintain their landing skills and the ability to perform nighttime launches and recoveries.
The intense amount of flying is necessary for the safe operation of the aircraft, but it not
only drives up fuel costs but also maintenance costs. Ships keep a supply of parts on board,
but aircraft tend to break down often due to the number of flight hours they clock in.
The ship will probably have most parts, but those not on hand need to be flown in from the US.
The ordnance that these planes drop is also very expensive. During just the first half of the
war on terror, the US Navy dropped an estimated 16,000 bombs. Though this amount is impressive,
the average cost for each bomb dropped will blow you away. When you factor in all the
costs to maintain the aircraft, fuel it, and fly it, the average price to drop one bomb from
an F-18 fighter is almost eight million dollars. Because of this, whenever a carrier strike group
is engaged in strike operations, the price tag for the American taxpayer goes up astronomically.
Now you need to watch “Incredible Reasons Why US Navy Aircraft Carriers are Almost
Impossible to Sink” Or watch, “50 Insane Aircraft Carrier Facts That Will Shock You”