WASHINGTON — Hanwha Defense USA (HDUSA) has been selected by TOTE Services to build the first Medium Landing Ship (LSM) for the U.S. Navy and Marine Corps under a $269 million contract announced on October 30, 2026. The agreement covers one vessel and includes options for three additional ships.
The contract marks Hanwha Defense USA’s first U.S. Navy shipbuilding award since its parent company acquired Philly Shipyard in Philadelphia, Pennsylvania, in 2024. Construction is scheduled to begin in the fourth quarter of 2027, with delivery expected in 2030.
Contract and Construction Schedule
TOTE Services selected HDUSA through a competitive bidding process launched in July 2026, citing its competitive pricing and acceptance of subcontract terms. TOTE manages the program under the Navy’s $2.2 billion Vessel Construction Manager (VCM) contract, overseeing shipyard selection, construction contracts and vessel delivery.
The VCM model is intended to improve cost and schedule management and expand the U.S. shipbuilding industrial base. TOTE President Jeff Dixon said the approach has accelerated the process from request for proposals to contract award.
Hanwha Philly Shipyard has already built and delivered four National Security Multi-Mission Vessels (NSMVs) under the VCM model with TOTE Services. A fifth vessel is expected in 2027. Hanwha personnel have been working at the Philadelphia yard since early 2026 to prepare it for naval construction.
Medium Landing Ship Fleet
The U.S. Navy plans to acquire 35 Medium Landing Ships, with an initial group of up to eight vessels supported under the VCM contract.
The LSM, also known as the McClung class, is designed to support Marine Corps expeditionary operations, particularly in the Indo-Pacific. The vessels will transport Marines, vehicles and supplies between coastal locations and island chains.
The ships will have a shallow-draft design, allowing them to operate close to shorelines without depending on deep-water ports. Based on a concept developed by Dutch shipbuilder Damen, the vessels are planned to be approximately 100 meters (328 feet) long and capable of carrying around 250 Marines or 500 to 800 tons of cargo.
Shipyard Investment and U.S. Shipbuilding
The contract aligns with the U.S.-South Korea Make America Shipbuilding Great Again (MASGA) partnership, which aims to support the American shipbuilding industry.
Hanwha plans to invest up to $5 billion in Philly Shipyard, with the goal of increasing its capacity to build up to 20 ships annually. HDUSA has also announced plans to acquire a controlling 60 percent stake in the shipyard, currently held by its affiliate, Hanwha Systems.
Hanwha Defense USA President and CEO Michael Coulter said the company has focused on workforce and technology upgrades since acquiring the shipyard in 2024 to prepare it for U.S. Navy and federal projects.
The Navy had previously directed Bollinger Shipyards to build the initial LSM and awarded long-lead material work for four additional vessels to Fincantieri Marinette Marine. TOTE Services said discussions with both shipyards remain productive and that they are expected to play meaningful roles in the program.
The selection of Hanwha Defense USA expands the number of U.S. shipyards involved in the early stages of the LSM program and builds on the company’s existing experience in government vessel construction.
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