Hanwha Philly Shipyard has secured a $269 million contract to build a Medium Landing Ship (LSM) for the U.S. Navy and Marine Corps, marking an important step for the South Korean company in U.S. naval shipbuilding.
TOTE Services announced on Friday that it has chosen Hanwha Defense USA (HDUSA) as the first shipbuilder for its $2.2 billion Vessel Construction Manager (VCM) contract related to the LSM program. This contract involves the construction of one ship at the Philadelphia shipyard, with an option for three more vessels.
Construction is expected to start in the fourth quarter of 2027, with the first vessel planned for delivery in 2030.
The selection followed a competitive bidding process that began in July, shortly after Hanwha revealed its plan to bring the Philadelphia shipyard under the control of its U.S. defense subsidiary.
“Since acquiring Philly Shipyard in 2024, Hanwha has invested heavily in its workforce and technology to prepare for building ships for the U.S. Navy and federal clients,” said HDUSA President and CEO Michael Coulter.
This contract is Hanwha Defense USA's first award for U.S. Navy shipbuilding and represents a significant move in transforming the former commercial shipyard to serve both military and commercial customers.
TOTE Services selected Hanwha due to its competitive pricing and acceptance of subcontract terms. The company is also in talks with Bollinger Shipyards and Fincantieri Marinette Marine to possibly assist in building the LSM fleet.
“This award demonstrates how quickly the VCM model can move from request for proposal to contract,” said TOTE Services President Jeff Dixon. “Through a competitive process, we secured beneficial terms for the government while allowing construction to start in late 2027.”
The aim of the LSM program is to equip the Marine Corps with smaller amphibious ships to transport people, equipment, and supplies between islands and coastal areas, especially in the Indo-Pacific region. The Navy and Marine Corps plan to build a fleet of 35 vessels, with TOTE's initial contract covering up to eight ships.
This award also builds on the existing relationship between TOTE Services and the Philadelphia shipyard.
In a separate VCM agreement with the U.S. Maritime Administration, TOTE has managed the construction of the National Security Multi-Mission Vessel (NSMV) program at Philly Shipyard, where four out of five training ships have already been delivered.
“Hanwha Philly Shipyard has successfully built and delivered four NSMV vessels under the VCM model with TOTE Services, and we will use that experience to deliver the LSM to the U.S. Navy and Marine Corps,” said Tim Glinatsis, senior vice president of program management at HDUSA.
This announcement comes amid a broader restructuring of Hanwha's U.S. shipbuilding operations.
As reported by gCaptain, Hanwha Defense USA revealed this week that it is acquiring a controlling stake in Hanwha Philly Shipyard, transitioning the facility to defense-focused ownership as they expand their U.S. naval shipbuilding business.
Hanwha bought the shipyard in December 2024 and has been investing in workforce development, infrastructure, and technology to support naval construction growth.
This shift has raised questions about the balance of military versus commercial shipbuilding at one of the key Jones Act shipyards in the U.S.
When asked if Hanwha would maintain and grow its commercial Jones Act shipbuilding capacity as the yard shifts to defense-led ownership, a company spokesperson said they are “well positioned to compete and build for both commercial and naval demands as a dual-use facility.”
The contract announcement on Friday is a clear indication of Hanwha's strategy to establish a presence in Navy ship construction while positioning the Philadelphia facility for more government and commercial contracts.