For some time, business had been good for shipbuilders. They were either constructing scores of new vessels or repairing old ones. However, since the industry fell into crisis, they are finding themselves with less and less to do. The market is consolidating. Shipyards are closing or having to restructure to cut costs. The latter involves outsourcing various tasks that would have previously been part of their core business—planning projects and designing and commissioning ships, for example.
Calling out for experts
One reason shipyards are outsourcing assignments is to reduce costs. Another is that they can rely on external specialists to deliver goods and services on time and to the correct specifications. Examples of these specialists include Wärtsila, a manufacturer of propulsion solutions, and service providers like Goltens and Machine Support. These industry experts serve numerous customers at a time—and so must work highly efficiently. A further motive for subcontracting is the lack of experienced, skilled engineers on the market. Shipyards outsource to compensate for this shortage.
What does this mean for the industry? In the future, shipyards will move away from shipbuilding in the traditional sense, no longer offering one-stop shipping solutions. Their work will mainly involve integrating “foreign” systems into vessels—i.e. incorporating single components and subsystems.
What does the future hold?
These are uncertain times. To keep up with the pace of change, shipbuilding companies need to continue to reduce expenditure through outsourcing. This brings another advantage in that external specialists often work more flexibly and efficiently than a shipyard’s own team.
In the long term, the outsourcing trend will continue to gain traction. Just how much will be subcontracted depends on the kind of vessel: cruise liners, ferries, or standardized cargo ships. Suppliers stand to gain. Especially those that specialize in service. Eventually, they will own the market share currently belonging to shipyards. Both parties will be forced to rethink their core business and consider how they are going to leverage it going forward. We will delve deeper into what lies ahead for shipowners and ship suppliers in the fourth part of our “Maritime Trends” series.
What is the situation for shipowners?
Shipowners are also following the outsourcing trend. How much they subcontract depends on the size of the company and how established it is in services and dry-docking.