Shipbuilding in the rest of the world

Updated 5 Sep 2019

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Although it is normally Asian and European yards between them that have the lion’s share of world shipbuilding, there are many other places where building takes place. In most of these, production is limited to fishing vessels and small ship types for domestic operators, but there are exceptions.

Sometimes counted as European, although here put with the rest of the world, Turkey has a large shipbuilding sector that was until recently one of the top ten nations. The largest nations in this grouping are the US and Brazil, both of which were quite prolific in offshore-related ship construction and both of which have seen activity drop as a result of the fall in crude oil prices.

There are other nations also building ships of different types; Argentina is due to deliver three tankers and an offshore ship this year, Australia has a successful sector specialising in aluminium ships – notably fast catamaran ferries – and Azerbaijan builds offshore ships and small tankers. Canada, Chile, Ecuador, Egypt, Iran and the UAE are also building small vessels that are either offshore- or passenger-related.


Twenty years ago, it was hard to imagine that, just about the same amount of time before, Brazil was for a short time the world’s number one shipbuilder. Brazil’s production over the past decade has again soared as exploitation of the country’s oil and gas reserves began but has stalled over the last few years as corruption and scandal have engulfed the government and the majority state-owned oil giant Petrobras.

The renaissance of Brazil’s shipyards has been almost entirely due to the country’s requirement since 2003 that ships built to service the offshore industry must include a very high level of local content. As well as local involvement, many companies from elsewhere also invested in the yards building offshore vessels. Norwegian involvement was particularly high, with Vard being one of the major investors.

As the world oil price fell and the problems at Petrobras grew, contracts for new vessels were delayed and cancelled. The output of yards varied from simple crew and platform supply vessels to sophisticated drilling ships, FPSOs and crude oil tankers of Aframax and Suezmax sizes.

Between 2015 and 2017, Brazilian yards produced 67 vessels for a total 1.8Mdwt and last year 11 ships for 645,556dwt. The forward orderbook at the end of March appears initially healthy at 45 ships for 2.1Mdwt but with the main yards in financial restructuring and several of the customers also in poor financial state, the likelihood of many of the contracts being completed is very low.


Through the first decade of the 21st century, Turkey had built a solid reputation as a builder of small chemical and product tankers. The yards involved often built ships speculatively and, in some cases, even operated their newbuildings for a short time before selling them.

Turkey’s proximity to Europe and its ability to produce quality ships and hulls at relatively low cost has made it attractive for European owners and builders. This has become even more so as Eastern European yards are becoming less competitive as EU rules on subsidies take their toll. Turkish yards may not be subsidised but they do receive encouragement from the state and, last year, five private yards at the government’s behest announced plans to start building engines in Turkey.

The crash of 2008 saw orders for small tankers begin to dry up pushing Turkey’s production figures down. There are still regular orders for this type of ship but not in the numbers that were reached near the peak.

Very soon after 2008, the yards diversified into building hulls and complete ships for the offshore sector with Norwegian owners and builders being particularly active customers. The seeds sown in that period have burgeoned and as Norwegian yards also cut back on offshore ships, the focus has switched to passenger vessels. The work is spread across many builders in Turkey although perhaps the most notable vessels are the two hybrid cruise-ferries being built for Havila Kystruten at the Tersan yard.

Another Norwegian ferry operator – Fjord1 – has already taken delivery of three battery hybrid ferries and has nine more on order, spread between three builders, Cemre, Sefine and Tersan. These and other orders helped Turkey to notch up orders for 30 battery or hybrid ships in the last six months of 2018.

In the three years from 2015, Turkish yards produced 98 ships for 300,352dwt and in 2018 delivered 24 ships for 78,097dwt. The forward orderbook stretches out two years to February 2021 and comprises 67 vessels for 250,269dwt.


Next year will see the centenary of the 1920 Merchant Marine Act – better known as the Jones Act – which requires goods transported between US ports to be carried on ships built, crewed and owned by US bodies. It might be thought that the presence of such an act would have ensured US shipbuilding was highly active and successful.

To a point it is, but in modern times US shipyards have had a hard time in attracting many orders. Partly this is because many US shipowners operate under open registers and build ships engaged in foreign trade in the main yards in Asia. Production in US yards is limited to a small number of cargo vessels and tankers used for cabotage trades and dominated by offshore vessels to support the local oil and gas fields.

Some of the ships are quite sophisticated and, partly because the US is surrounded completely by ECAs, many of the offshore vessels and some of the container and cargo ships are powered by dual-fuel engines capable of running on LNG. The Isla Bella, a 3,100teu container ship built for Tote Maritime by Nassco in 2015, was the world’s first LNG-powered container ship. Last year, the 3,620teu Daniel K Inouye, also capable of running on LNG, was built at the Philly Shipyard for Matson Navigation as the first in the owner’s Aloha Class and became the largest ever container ship to fly the US flag.

Tote took delivery of Perle Del Caribe, a sister of Isla Bella, in 2016 and Matson received Kaimana Hila as its second Aloha class ship at the end of March 2019. Matson has two smaller 2,750teu dual-fuelled ships under construction at Nassco. The first of these is due for delivery at the end of this year and the second in 2020.

Another US-flag operator with LNG-fuelled container ships under construction is Pasha Hawaii. It has two 2,525teu ships on order at the Keppel AmFELS yard that will be fitted with MAN ME-GI engines and plans to run the ships on LNG from the outset. They are due for delivery in Q3 2020.

There is a growing realisation in the US that its shipbuilding industry is not in the best of health and last year a bi-partisan act – the Energizing American Shipbuilding Act of 2018 – was introduced into the senate which if eventually passed would see some of the growing US exports of LNG and crude oil transported on US-built and flagged vessels. The aim is to build at least 50 tankers and LNG carriers and create thousands of jobs in US shipyards by 2040. The US mid-term elections meant that the bill was not progressed but its sponsors said in March 2019 that they plan to reintroduce it this year.

Over the period 2015-2107, US yards delivered 106 vessels for 1.3mdwt and 22 ships for 210,731dwt in 2018. The order book comprises 32 vessels for 461,312dwt.

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