Increasing the Size and Missile Capability of the Navy’s Fleet Within the Next Five Years

Summary

This report presents three options to quickly increase the offensive lethality (that is, the capacity to destroy, neutralize, or kill enemy ships, land-based installations and weapons, or personnel) of the U.S. Navy’s fleet of surface ships. The growing power of China’s navy and indications that that country’s leaders want to have the capability to invade and occupy Taiwan by 2027 have created a sense of urgency in the U.S. Navy to increase the offensive capability of its surface force. To do that, the Navy needs to increase the fleet’s ability to sink more enemy ships at long ranges and destroy more targets on land, either by adding ships that carry offensive weapons or by putting more offensive weapons on existing ships. In this report, the Congressional Budget Office explores several options that the Navy could pursue to bolster its offensive capability over the next five years. CBO does not make any recommendations about the options.

As of May 1, 2026, the Navy’s fleet consisted of 291 battle force ships of various types: aircraft carriers, submarines, large surface combatants, small surface combatants, amphibious warfare ships, and some types of combat logistics and support ships. (That total does not include unmanned surface or undersea water vessels capable of carrying weapons, but the Navy has few of those systems in its inventory.) In addition to the strike capability of the fleet’s 11 aircraft carriers, the Navy has an enormous missile capability. Its surface combatants and submarines carry about 9,100 vertical launching system (VLS) cells, which are essentially missile tubes for firing the offensive and defensive missiles the Navy uses.

As part of its 2025 shipbuilding plan, the Navy aims to increase its inventory of ships and the number of VLS cells they carry in accordance with its distributed maritime operations (DMO) concept.1 The DMO concept is a plan for using U.S. naval forces in combat operations against an adversary, particularly China, that has substantial capabilities for detecting and attacking U.S. Navy surface ships using antiship missiles and other weapons. A larger number of U.S. ships capable of carrying weapons would, in the event of a conflict, complicate China’s ability to track, target, and attack all of the U.S. naval forces that may threaten its own.

This report examines three options to quickly increase the Navy’s capability:

• Add missile launchers to existing and reactivated ships (Option 1),
• Buy used merchant ships and equip them with missile launchers (Option 2), or
• Buy used unmanned platforms and equip them with missile launchers (Option 3).

Other options, such as building more ships, even in foreign shipyards, would probably not bring additional capability to the fleet within five years. With respect to CBO’s options, the Navy could pursue any or all of them. Each one would increase the number of cells capable of launching antiship, antiair, and land-attack missiles in the fleet as well as the number of ships capable of firing those missiles. Considered separately, Option 1 would add the most missile cells (640) and missile-carrying ships (69) to the Navy’s fleet and cost $4.3 billion through 2030. Option 2 would add half as many missile cells (320) and fewer than one-third as many ships (20) and cost $2.3 billion. Option 3 would add the fewest missile cells (144) and missile-carrying ships (12) and cost $1.5 billion. All of CBO’s options exclude the costs of buying new missiles.

The Navy’s Fleet Today and in 2030

The 291 battle force ships in the Navy’s fleet today consist of 11 aircraft carriers, 14 ballistic missile submarines (the only ships that currently carry nuclear weapons), 52 attack and guided cruise missile submarines, 85 large surface combatants (7 cruisers and 78 destroyers), 32 small surface combatants (littoral combat ships, or LCSs) and mine warfare ships, 32 amphibious warfare ships, and 65 combat logistics and support ships. Of those ships, only the large surface combatants and attack and guided missile submarines carry the fleet’s 9,100 VLS cells. However, 13 LCSs are equipped with the Naval Strike Missile (NSM), which is a smaller, shorter-range weapon than those carried in VLS cells. Thus, overall, the Navy has 137 ships capable of launching large antiship, antiair, or land-attack missiles.

In its surface force, the Navy has 85 ships capable of launching large weapons and an additional 13 ships capable of firing smaller antiship missiles, for a total of 98 missile-carrying ships. Aircraft carriers, with their embarked air wing, provide the most potent element of conventional strike power in the fleet. Those 11 vessels have significant strategic importance and would take decades to replace if any one of them was sunk in a conflict. By contrast, increasing the number of “offensive missile shooters” (ships or vessels that can fire offensive weapons at other ships or land targets) could be done relatively quickly (if the Navy chose to do so) and is a goal that fits well with the Navy’s operating concept of distributed maritime operations.

By 2030, under the Navy’s 2025 shipbuilding plan, the total number of missile cells and missile-carrying ships would increase slightly.2 The number of large and small missile cells on surface ships would increase to about 8,300, but the number on submarines would fall to less than 700, primarily because of the retirement of 4 guided missile submarines, each of which carries 154 missile cells. As new ships were commissioned and old ships were retired, the total number of missile-carrying surface ships would increase to 116 by 2030, but the number of submarines would fall to 47. (Those figures exclude unmanned systems because of the considerable uncertainty about the Navy’s plan for those systems over the next five years. According to the 2025 shipbuilding plan, the Navy expects to build more than 100 unmanned systems. Recently, (now former) Secretary of the Navy Phelan reiterated the importance of unmanned systems to the future fleet.)3

The Logic of Distributed Maritime Operations

In essence, DMO is an operating concept that seeks to disperse the sensor systems and firepower of the Navy’s fleet among many platforms while maintaining the capability to coordinate and concentrate their effects.4 That is particularly relevant if the Navy is forced to fight a powerful opponent, such as China’s navy, formally called the People’s Liberation Army Navy. The DMO concept represents the U.S. Navy’s effort to counter the growing strength of China’s military, including its substantial capabilities for detecting and attacking U.S. surface ships and aircraft using antiship and antiair missiles.5

Under the DMO concept, the Navy would increase the numbers of ships, unmanned systems, and aircraft that carry antiship weapons, sensors, or both. Those platforms could include small surface combatants, unmanned surface and subsurface vessels, and existing Navy or Military Sealift Command ships that currently do not carry weapons. A fleet that included larger numbers of offensive (antiship) missile shooters would complicate an adversary’s ability to detect, target, and destroy all of the vessels that threaten its own forces. Simply put, the DMO concept means that the Navy would be distributing more of its eggs among a larger number of baskets. Over the long term, the Navy plans to implement the DMO concept by building a larger fleet of both manned surface ships and submarines, as well as more than a hundred unmanned vessels. However, implementing that plan could take a long time—much longer than the five-year period considered in this analysis.

Options to Quickly Increase Naval Capability

The Navy could pursue several options to quickly increase the firepower of its fleet and its overall offensive capability. The three options that CBO examined are not mutually exclusive: the Navy could pursue one, two, or all of the options simultaneously.

Compared with today’s fleet, the options could increase the number of missile cells by between 144 and 640 cells (or by 2 to 8 percent) and the number of missile-carrying surface ships by between 12 and 69 ships (or by 4 to 24 percent). The five-year costs of the options would range from $1.5 billion to $4.3 billion, CBO estimates (see Table 1). Option 1, under which the Navy would add missile launchers to existing and reactivated ships, would have the largest impact and cost the most. Option 2 and Option 3, under which the Navy would buy used merchant ships or used unmanned platforms and equip them with missile launchers, would cost less and have a smaller impact.

This report does not examine an option to increase the purchase of new ships (even foreign-built ones) because CBO expects that such an option would take more than five years to implement. Under a longer time horizon, new ship construction—by U.S. or foreign shipyards—would be a viable option.

An important issue that affects all of the options in this report is the potential limitations on U.S. missile inventory. Would enough missiles be available to fully equip the Navy’s existing ships as well as provide the additional capacity envisioned in CBO’s options? Information about the Navy’s inventories of missiles is not publicly available. Even if the Navy’s missile inventory was insufficient to fill all the missile launchers discussed in this report within five years, the options would still have value in distributing the Navy’s firepower among more platforms—a goal that is consistent with the DMO concept. A potential adversary would not be able to determine with certainty whether any given ship was carrying weapons. Thus, even a ship equipped with empty missile launchers could still complicate an enemy’s ability to locate, identify, and target every missile-carrying ship or vessel.

Option 1: Add Missile Launchers to Existing and Reactivated Ships

The Navy’s existing fleet includes 107 ships that do not have the capability to launch any missiles. (That number does not include aircraft carriers and large amphibious assault ships, which can fire missiles from their fixed-wing aircraft complement.) Under this option, the Navy would install 8 to 12 missile launchers on 43 of those ships, including 11 T-EPF expeditionary fast transports, 14 T-AKE logistics ships, 5 T-AO-205 oilers, and 13 LPD-17 amphibious transport docks. In addition, the Navy would reactivate 11 ships that have been retired—4 T-EPFs and 7 LCSs—and install 12 missile launchers on each. Also, under this option, the Navy would receive money to accelerate its plan to install antiship missile launchers on an additional 15 LCSs that the service is planning to keep in the fleet but that do not yet carry antiship missiles. (The Navy is planning to equip all LCSs with antiship missiles by 2032.)

Various missile launchers would be used to fire those added weapons, including the Mark 70 Payload Delivery System (or Mark 70 VLS, for short), the Adaptable Deck Launcher, and the Over-the-Horizon Weapon System (OTH-WS), which is equipped with the Naval Strike Missile.6 (See Box 1 for descriptions of those systems.) Because the NSM has a shorter range than the missiles typically launched from the other systems, CBO is counting them separately from the larger missile cells. The LPDs, the T-AKEs, the T-AOs, and the 15 accelerated LCSs would carry the NSM. The T-EPFs and the 7 reactivated LCSs would carry the Mark 70 VLS or the Adaptable Deck Launcher. Overall, by 2030, this option would increase the fleet’s capacity for large missiles by 264 and the number of NSMs by 376 (see Figure 1). The number of missile-carrying ships would increase by 69.

Implementing this option would cost a total of $4.3 billion over five years, CBO estimates. The marginal costs of this option (in other words, the additional expense incurred from producing one extra unit of a good or service) include installing missile launchers on existing ships, reactivating and installing missile launchers on retired ships, and operating and supporting the ships returned to service. Thus, there are no additional operation and support costs for the LPDs and T-AOs, for example, because those ships would operate in the fleet regardless of whether they carried missiles. CBO relied on information provided by the Navy and industry to estimate the costs of installing different types of missile cells on existing Navy ships.

Advantages. This option’s primary advantage is that it provides the largest increase in the number of ships capable of launching land-attack or antiship weapons. In certain wartime scenarios, having more ships that are able to bring antiship capability to the fight could complicate an adversary’s military operations and ability to target all potential threats. In short, this option aligns well with the concept of distributed maritime operations.

Disadvantages. The main disadvantage of putting antiship missiles on amphibious and logistics ships is that ship-to-ship combat is not in their mission profile. Instead, that is the job of aircraft carriers, submarines, and surface combatants. Amphibious ships were designed to carry and deploy Marines for various peacetime and wartime missions. Logistics ships deliver food, fuel, ammunition, and other items to other ships in the fleet. Using them to engage other ships would likely mean that they had encountered a target of opportunity or that they were being employed as a tool of last resort in a particular scenario. In short, amphibious and logistics ships are unlikely to be used in a wartime situation in which their antiship weapons would be deliberately brought to bear.

One important result of implementing this option is that the T-EPF ships would be crewed differently. Those expeditionary fast transport ships are usually operated by the Military Sealift Command using civilian mariners. Because the ships would now carry weapons, they would instead be crewed by Navy sailors. That change could be a potential disadvantage in terms of its cost. A secondary disadvantage of the T-EPF element of this option is that the ships would be more restricted in the kinds of seas in which they could operate. Although operable at high speeds of 35 knots in moderate seas designated as Sea State 3, T-EPFs could travel at only 10 knots in rougher seas with more vigorous wave action, conditions that are rated as Sea State 5. (That limitation is a function of the T-EPF’s design, not the result of adding weapons to it.)

Option 2: Buy Used Merchant Ships and Equip Them With Missile Launchers

Under this option, the Navy would buy 20 used merchant ships and equip them with the Mark 70 vertical launching system.7 Initially, each ship would carry 16 missiles, but more missiles could be added to those ships over time as production and inventories of missiles and missile-launching systems increased. (More ships could also be converted as those production capacities grew.)

Merchant ships are commercial vessels used to transport cargo or passengers across water. Unlike naval vessels, such privately owned ships focus on transporting goods like oil, shipping containers, or raw materials. Although merchant ships are designed to carry containers of various sizes, the 40-foot container is by far the most common, carrying about 70 percent of the world’s cargo. Thus, the Mark 70 VLS, which is housed in the same sized container, could be easily carried by merchant ships.

Compared with naval warships, merchant ships are typically operated by very small crews. If those ships were equipped with missiles, they would be operated by a slightly larger number of Navy sailors. Overall, this option, as configured, would increase the large missile capacity of the Navy’s fleet by 320 missiles by 2030 (see Figure 2).

Implementing this option would cost $2.3 billion over the next five years, CBO estimates. The costs include buying used merchant ships, installing missile canisters on those ships, and subsequently operating and supporting the ships.

Advantages. An important advantage of this option is that it is scalable. The used merchant ships could carry more missiles, or more used merchant ships could be purchased, than this option considers. A second advantage of the option is that it creates a flexible platform.8 If the Navy chose, other payloads could be loaded into the containers carried by the merchant ships. Such payloads could include different kinds of sensors or various types of expendable drones. (Even though that advantage would apply to any option using modified shipping containers as weapon launchers, the sheer volume and scalability of the used merchant ships would provide the largest capacity to vary the payloads.) A third advantage of this option is its relative ease of implementation. The Navy can buy used merchant ships on the world market and install canisterized missiles on them within a year.

Disadvantages. This option’s main disadvantage is that used merchant ships would not have any ability to defend themselves if they were identified as military combatants and targeted by an adversary’s forces. Without any significant protection, defensive systems of any kind, or stealthy characteristics, the merchant ships would be vulnerable to attack. If the Navy chose to install some defensive systems on the ships, the costs and the complexity of implementing this option would increase. However, some defensive systems, such as the Navy’s close-in weapon system and the sea-based rolling air frame missile, could be installed as nearly stand-alone units that would not require a great deal of integration with the ship.

Option 3: Buy Used Unmanned Vessels and Equip Them With Missile Launchers

Under this option, the Navy would buy 12 offshore supply vessels (OSVs) and convert them to unmanned vessels that could each carry 12 long-range missiles in 40-foot shipping containers. OSVs are specialized, self-propelled ships designed to transport materials, tools, equipment, and personnel to and from offshore drilling rigs, production platforms, and wind farms. The small number of vessels considered in this option is limited by the number available for immediate purchase and conversion.

This option would represent an interim step toward the Navy’s goal of greatly expanding its unmanned surface vessel capability.9 The Navy would add 144 large missile cells to its arsenal under this option, which is more firepower than a CG-47 cruiser now carries (see Figure 3). Also, the 12 additional vessels would enable the Navy to form two squadrons, one for employment with the fleet and one for broader experimentation. These vessels are the same type as that used by the Navy as part of its Overlord program (a joint initiative to develop, test, and field large unmanned surface vessels that have been converted from commercial fast supply vessels).

The five-year costs of purchasing the vessels, installing missile canisters, and operating and sustaining them would be $1.5 billion, CBO estimates. Among the three options that CBO considered, this one would be the least expensive but would provide the least amount of capability.

Advantages. The principal advantage of this option is that the 12 used OSVs are available now and could be converted to operational Navy assets in under a year. (Many companies are developing and planning to build dedicated unmanned vessels for naval and other missions, and this option would give the Navy an edge in that pursuit.) The Navy could then begin more extensive testing and operational experiments using a larger unmanned vessel force than it now has with its current experimental craft. The second advantage of this option is that because the vessels are unmanned, the Navy would not risk any crew members when using the vessels for operations, particularly in the event of a conflict.

Disadvantages. The primary disadvantage of this option is that the Navy would not have a large number of these particular vessels. In its most recent shipbuilding plan, the Navy envisioned a future fleet that would have more than 100 unmanned vessels.10 Thus, 12 vessels that were separate from the Navy’s intended unmanned force and required their own logistics, operations, and maintenance infrastructure could boost the Navy’s overall long-term costs.

Comparing the Options

CBO designed the three options in this report so that the Navy could pursue one, two, or all of them at the same time. By design, CBO limited the capacity of some options, notably Option 2, so that a sufficient number of missile containers would be available in case the Navy chose to implement all three options. Under those constraints, Option 1 would provide the largest increases in the numbers of missile cells and missile-carrying warships (see Figure 4).

The cost to add missile launchers is approximately the same under all three options: $2.6 million to $2.8 million per missile cell per year. The cost of adding ships, however, varies. The average annual cost for each ship added to the fleet is highest—$45 million—under Option 2 (see Figure 5). That cost is lowest under Option 1 because most of the additional missile-carrying ships under that option would be in the fleet regardless; their marginal cost is only the cost of adding missile cells to those ships. It should be noted that costs for missile cells and ships per year would decline the longer the ships served in the fleet. The upfront costs of purchasing the ships and missile systems and the costs of installing those systems would be spread over more operating years, thus reducing the annual cost.

An important caveat to this analysis is that Option 2’s scalability could have a pronounced effect on the costs per missile cell each year. For example, if the used merchant ships were equipped with 32 missile cells—twice the number as under CBO’s option—the average cost per additional missile cell per year would fall by one-third (see Figure 6). The cost per additional ship in that example would be slightly higher than under Option 2 because of the expense of buying and installing additional missile launchers, but the cost per missile cell would be significantly smaller because the fixed costs of buying the ships and installing the weapons would be spread over more missile launchers. Options 1 and 3 cannot be scaled in the same way as Option 2. Option 3 could be scaled differently by buying different used or new unmanned surface vessels but not by putting more missiles on those platforms.

Considerations About Ship Survivability

The survivability of the Navy’s ships—and thus the weaponry that they carry—would vary considerably under CBO’s options. The Navy assesses survivability along three dimensions: susceptibility (a ship’s ability to avoid being hit), vulnerability (a ship’s ability to withstand damage if it is hit), and recoverability (the ability of a ship and its crew to recover from or repair the damage and resume operations).

Each of those characteristics depends on different elements. For example, the ability of a ship to avoid being hit would hinge on the likelihood of an adversary’s force detecting it and on the ship’s ability to avoid the hit using various defensive systems and evasive maneuvering. A ship’s ability to withstand damage if hit depends on many elements of the ship’s construction, such as the degree of compartmentalization and the amount of redundancy in the ship’s critical systems. The ability to recover from damage would depend on such things as the availability and training of the crew in damage control and perhaps on whether damaged components could be replaced on the ship. Moreover, those concepts overlap. A ship that is built to better withstand damage might also recover more quickly and easily from any damage that it sustains. Among the Navy’s fleet of surface ships, aircraft carriers and destroyers have the highest survivability because they have robust defensive systems, are well constructed, and have large crews capable of engaging in damage control operations.

Under each option that CBO examined, the degree of ship survivability would differ. The amphibious ships under Option 1 would have lower survivability than aircraft carriers and destroyers. Even though the amphibious ships have some defensive systems, they do not have as much defensive capability as a destroyer, nor are they built with the same degree of ruggedness. And the logistics and support ships under Option 1 would have lower survivability than the amphibious ships because they do not have any defensive systems and are less robust than amphibious ships.

The used merchant ships under Option 2 would have no defensive systems and are even less ruggedly built than the Navy’s logistics ships. However, an adversary may not recognize a merchant ship operated by the Navy as one carrying weapons.11 On the one hand, if a lot of merchant traffic continued to operate in the area where military activity was occurring, commercial ships carrying weapons might blend in and, thus, be stealthy because they look like all the other ships. On the other hand, if all civilian merchant traffic left the area and the only ships remaining were operated by the Navy, they probably could be easily detected, targeted, and attacked by an adversary.

The only survivability virtue of the unmanned systems under Option 3—and it is an important virtue—is that they are relatively small and thus may be difficult to detect. If they were detected, then they, too, would probably be easily targeted and attacked. They would have virtually no ability to recover from damage if they suffered a serious hit from an enemy weapon. But no lives would be lost if such a vessel was destroyed.

Because all of the ships under each option would have communications links with other naval ships, a cyberattack on the fleet would be likely to affect them all, regardless of their other capabilities.

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1. 1. The Navy did not publish a shipbuilding plan for 2026, and the Navy’s 2027 plan was not available when this report was written.

2. 2. CBO used the Navy’s 2025 shipbuilding plan, modified to account for recent decisions to extend the service life of some ships, as its basis for comparison. Over the past 18 months, the Navy announced it would extend the service life of 17 destroyers, 3 cruisers, and 3 littoral combat ships. Those life extensions would keep about 1,500 VLS cells on destroyers in the fleet through 2030. Although the 3 cruisers would serve for an additional three to four years in the fleet, they would retire in 2030. See Congressional Budget Office, An Analysis of the Navy’s 2025 Shipbuilding Plan (January 2025), p. 12, www.cbo.gov/publication/60732; and Sam LaGrone, “Navy Won’t Decommission More Littoral Combat Ships, Officials Say,” USNI News (January 27, 2026), https://tinyurl.com/a9twf8u2.

3. 3. Department of the Navy, Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for Fiscal Year 2025 (March 2024), p. 3, https://tinyurl.com/mrwdcz35; and Secretary of the Navy John Phelan, “Remarks at 2026 West” (February 14, 2026), https://tinyurl.com/5an5zfxc.

4. 4. The Navy has also called this concept distributed lethality, a term that fell out of use for a number of years but may be coming back into common parlance.

5. 5. Ronald O’Rourke, Defense Primer: Navy Distributed Maritime Operations (DMO) Concept, Report IF12599, version 12 (Congressional Research Service, December 4, 2025), https://tinyurl.com/bdecwufj.

6. 6. The defense industry recently developed another option, which involves putting the AGM-158C long-range antiship missile (commonly refered to by its acronym, LRASM) into 20-foot shipping containers or a similarly sized launcher. The LRASM was developed as an antiship missile launched by aircraft, but it can be adapted for use by ground forces or surface ships. It takes up a similar amount of physical space on a ship as the OTH-WS but has approximately twice the range.

7. 7. This option was first proposed by R. Robinson Harris and others in “Converting Merchant Ships to Missile Ships for the Win,” U.S. Naval Institute Proceedings, vol. 145, no. 1 (January 2019), https://tinyurl.com/486aa2jb. Two authors of that article followed it up with additional analysis more recently. See T. X. Hammes and R. Robinson Harris, “Warship Weapons for Merchant Ship Platforms,” U.S. Naval Institute Proceedings, vol. 151, no. 2 (February 2025), https://tinyurl.com/3kmtrwvt.

8. 8. T. X. Hammes, We Can’t Buy Our Way Out: It’s Time to Think Differently, Issue Brief (Henry L. Stimson Center, November 2025), https://tinyurl.com/3pkv5rec.

9. 9. Congressional Budget Office, An Analysis of the Navy’s 2025 Shipbuilding Plan (January 2025), pp. 13–14, www.cbo.gov/publication/60732.

10. 10. Ibid.

11. 11. Under the laws of war, a warship may not pretend to be a civilian ship and thus claim protected status to attack an enemy. Doing so would constitute perfidy. The militarized merchant ships under Option 2 would not fall into that category because they would be identified as U.S. naval vessels and would not claim a protected status. Instead, they would, at best, be engaging in deception or concealment as a naval vessel, which is permissible.