Modern Shipyard Trends and Challenges

Building and maintaining ships has always played an important role in our nation’s economy. Today, with more than $17 billion in government funding¹ to port infrastructure and waterways around the country, there is significant renewed interest and investment in the American shipbuilding market.

To reap the rewards of anticipated market growth, however, shipyard owners and operators must successfully mitigate existing and emerging risks. In addition to evergreen exposures – such as fire, accidents, injuries and weather – recent stressors including economic volatility, supply chain disruptions and skilled labor shortages are presenting new challenges.

In this article, we’ll discuss some obstacles modern shipyards may encounter in trying to keep pace with the latest industry trends, as well as actions that owners, executives and safety managers can take to help mitigate the associated risks.

Meeting growing demand for eco-friendly ships

While shipbuilders have historically remained at the forefront of transportation technology, many vessels still run on traditional fossil fuels. In fact, on the global scale, marine transport continues to account for a high number of pollutants – some sources estimate even more than that of airplanes.⁴

Increasing use of alternative fuels to reduce carbon emissions has been a goal across the industry for some time. Motivated by government mandates, public demand, cost-saving incentives and investor pressure, shipyard owners are gaining momentum in their efforts to modernize, which include building new and retrofitting old vessels to run on cleaner-burning alternative fuels like liquefied natural gas (LNG) or by electric propulsion using lithium ion (Li-ion) batteries.

Ultimately, the goal is to reduce carbon emissions in a way that meets current needs and prepares ships for the future with fuel optionality. In other words, vessels could be built or retrofitted to run on two or three alternative types of fuel.⁶ Current skilled labor shortages and limited shipyard capacity, however, remain a barrier to getting this kind of specialized work done in a timely manner.

Incorporating new technologies

The drive to improve operational efficiency and safety has increasingly led to ships and shipyards being fitted with digital devices, smart sensors and cloud connectivity.

As shipyards adopt new ways of powering ship manufacturing, maintenance and operations, stakeholders must effectively manage the associated risks – and should evaluate and deploy new technologies only after careful consideration for:

• People. What hazards might the technology pose to human health and safety, and what training and measures can be taken to minimize them?
• Compliance. Does use of the technology comply with current regulatory requirements? And what steps need to be taken to ensure that its use remains compliant?
• Data. What data should be collected and how will it be kept secure as it’s analyzed, stored and shared throughout the organization?
• Security. How might the technology be exploited by bad actors and what measures can be taken to prevent that from happening?

Finding and retaining talent in a challenging labor market

From engineering and design to welding and rigging, every facet of shipbuilding and repair work requires specialized skills that remain in short supply. While there are both public and private resources flowing into the industry, the lack of skilled labor continues to present great challenges.

As manufacturing and modernization efforts ramp up, the problem is expected to get worse, with widening experience gaps and skilled labor shortages that can lead to:

• Delays in vessel construction and repairs.
• Defects and damage due to inexperienced workers.
• Higher incidence of job site accidents.
• Increased costs and downtime resulting from losses.

As soon as 2028, the shipbuilding and repair industry is projected to lose: