Shipyards Capitalize on Emerging Opportunities After Challenging Year

"Everybody has a plan until they get punched in the mouth," opined philosopher and pugilist Mike Tyson. Coronavirus, supply chain woes, workforce turnover, international conflict – you name it, and the last two years have had it. 

Every business reeled, of course, but the maritime industry, which ties together the economic, defense, commercial and energy interests of nations, was particularly hard-hit with consequential effects on shipbuilding.

The havoc has also forced the development and application of new technologies and approaches to activities the industry had performed for decades. While market disruptions have resulted in many shipyards dissolving, others have treated these same conditions as a catalyst for initiating the changes necessary for them to rise to the unique challenges of the modern industry.

Environmental Image

The introspection occasioned by recent events has led to a number of realizations, not the least of which is the increasing awareness of the far-reaching, collective impact of the maritime industry. Despite being the primary mode of transportation for virtually everything, and the most fuel-efficient and cost-effective method per ton-mile as well, the industry has remained a virtual unknown to the wider public, which seems only aware of the emissions from individual vessels when compared to other forms of transportation.

Shipyards likewise must wrestle with this reality from a production perspective. “Shipbuilding is a high-energy consumption business, and to be good stewards of the environment we have to reduce our own overall impact,” says Craig Perciavalle, Vice President & General Manager at Fincantieri Bay Shipbuilding in Wisconsin. To do this, Bay Shipbuilding and others have prioritized sustainability as an imperative, joining initiatives such as “Green Marine,” the largest voluntary environmental certification program in the North American shipbuilding industry.

Gasper D’Anna, President of Texas’ John Bludworth Shipyard, notes that “Shipyards enable commercial vessels to transport goods and products as efficiently as they do today.” That efficiency translates to less fuel, and less fuel means fewer emissions. These shipyards are fully aware that the construction sector is the more public-facing side of the industry and, as a result, has a more visible role in demonstrating its environmental responsibilities. 

Supply Chain Challenges

The supply chain chaos left in the COVID wake has compounded these issues, elevating the maritime sector in the public consciousness and exposing the enormous challenges the industry must overcome – a gauntlet readily accepted by yards of all sizes. 

“Constant increases in the prices of materials and difficulties in logistics all result in delivery delays,” says Cristhian Mar, Business Development Manager for Astivik Shipyard in Colombia. Undeterred, Mar’s Astivik colleague, Vice President Jaime Sanchez, has this to say, “It’s exciting to see how the industry has evolved worldwide. The hardships we have faced have simultaneously driven us to become more competitive and cost-efficient.”

This optimism reflects an understanding of the consequences of failure. Supply chain disruptions require local sourcing for materials that were once imported, driving shifts in manufacturing and distribution. Such challenges push innovation and development across industry boundaries and require shipyards to consider their influence on not just the environment but regional economies and national security as well. 

Given the momentous projects they undertake, it’s understandable that shipyards find change difficult and often a challenge. Strategies must be forward-facing: advanced for the current market but planned in such a way as to be right on time when launched into commercial use. “Shipbuilding is complex and takes the focused dedication of a strong team,” says Fincantieri Bay Shipbuilding’s Perciavalle, echoing an industry-wide sentiment. “We work very hard to keep everyone focused on the end objective.”

To establish this “end objective” requires clear goals. While delivering a finished vessel is obviously the primary purpose of any shipyard, builders with an eye toward longevity also make it a point to know what the industry needs, what the crew that will operate their vessels needs, as well as the needs of regional and global-level stakeholders. It’s this clarity that provides certainty for the future.

For John Bludworth Shipyard, this clarity of purpose includes sustaining legislation that supports the larger regional shipping industry. “U.S. shipbuilding is a multibillion-dollar industry that supports several hundred thousand jobs,” states D’Anna, “The Jones Act not only supports one of our nation’s economic engines but also helps sustain national security and the nation’s navigable waterways.” Perciavalle agrees: “We have to continue to support the Jones Act and what it means to our industry as well as its greater economic and national security impact.”

New Markets

With their increased awareness of supply chain and logistics and their ripple effects, shipyards are likewise more cognizant of new markets and opportunities. Unique ventures in the form of alternative fuels and emerging sectors offer prospects for newbuild initiatives. “Demand within any specific market is constantly changing,” says Perciavalle, “we have to be agile and change our focus accordingly to provide our best chances for success.” 

With declining demand for petroleum and chemical ATBs, for example, Fincantieri has entered the LNG space, having delivered its first LNG bunker barge with two more under construction. It’s likewise pursuing wind farm market opportunities as well as diverse state and federal programs.

Damen Shipyards has likewise been leaning forward – toward the emerging offshore renewable energy sector, new fuel technology and a cradle-to-grave-type approach to customer care. The company’s Antalya yard in Turkey recently delivered three new hybrid Fast Crew Supplier vessels into the wind sector. Additionally, it offers a long-term package in what Damen calls its “ship as a service” program – lifelong service and repair and the option for modifications as the industry evolves or client requirements shift.

While seeking new business, shipyards never lose sight of their traditional markets, recognizing that their established sector remains competitive even in the midst of transition. Astivik is poised to take advantage of the reviving regional petroleum sector, which Mar sees as an opportunity to revisit the OSV market. Similarly, during a recent tour of Fincantieri Bay Shipbuilding, we caught sight of the Mark Barker, the first U.S.-flagged, self-unloading Great Lakes freighter built since the early 1980s.

Skilled Worker Shortage

The responsibilities that modern shipbuilders must take on are complex and include endeavors that have, in some instances, never been attempted before. Although rooted in centuries of tradition, shipbuilders are rethinking conventional approaches to address the unique environment of the modern industry. 

Leaning on new technologies, yards are exploring innovative methods and mechanics. Automation and robotics, progressive 3D modeling, and virtual reality are all applications that promise more effective and efficient processes.

New tools are a fantastic help, but to keep up shipbuilders, engineers, welders and every trade must continue to learn. And while shipyards will keep using skilled workers to employ the most effective and efficient technology available, they’re lamenting the global shortage of a willing workforce. 

Fincantieri Bay Shipbuilding currently has openings in all skilled trades positions, as well as in support functions like engineering, planning and program management. Bludworth’s D’Anna is equally concerned: “One of the biggest challenges the greater maritime industry faces is finding people. Skilled trades in the industry can lead to a rewarding career, but there is very little desire for, or emphasis placed on, learning trades such as carpentry, welding, electrical and pipe-fitting.” All such positions are in high demand across the industry and pay solid wages.

Unsung Hero

Although virtually unknown by the general public, the maritime sector continues to be labeled as an environmental villain despite having been, in reality, an unsung hero for decades. As D’Anna points out, “Waterborne transportation has been and continues to be the lowest cost, most fuel-efficient, environmentally sound and safest mode of transportation in the world.” 

Shipyards like Bludworth, Fincantieri Bay Shipbuilding, Damen and others support that trend, not just in the vessels that they produce but also in the technology and tools they employ in their production. As the methods and technology evolve, the shipbuilding sector’s national spirit and global perspective remain unshakable. So does the sector’s optimistic outlook. 

Astivik’s Sanchez states confidently that Astivik and its peers across the globe have been and will continue to be optimistic. “The shipyard industry is known as one of the oldest, most open and highly competitive markets in the world, surviving spikes and downturns in the economy over the centuries. We will remain positive and working towards the development of not just our company and sector but the maritime industry as a whole.” – MarEx