THE RISING COSTS OF SHIP CONSTRUCTION

The enormous increase in newbuilding prices during recent years has primarily been due to cost-push factors and has to a lesser extent been due to cyclical demand-pull influences. Such are the prices of new vessels, that a one percent escalation in costs could represent an additional cost of $1 million. The study examines trends in labour, steel and machinery prices in the major shipbuilding countries and estimates the direction and magnitude of such prices up to the end of the 1970's, in view of the variety of measures which shipbuilders are adopting/may adopt to combat and control costs. These measures include the development of new shipyard configuration, the construction of new yards in low labour cost countries, the increasing standarisation of machinery and vessel design and a decrease in the variety of vessel types. Other cost reducing measures may include the formation of large, perhaps multi-national shipbuilding groups and further vertical integration of the industry, to include main engine builders and ancillary suppliers. The future possible structure of the industry is assessed and the question is raised as to whether, because of increasing costs, the shipbuilding industry will by the early 1980's resemble that of the aircraft industry, with only one major shipbuilding country.

  • Corporate Authors:

    Drewry (HP) (Shipping Consultants) Limited

    Palladium House, 1-4 Argyll Street
    London W1V 1AD,   England 
  • Publication Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 00126048
  • Record Type: Publication
  • Source Agency: Drewry (HP) (Shipping Consultants) Limited
  • Report/Paper Numbers: NO. 29
  • Files: TRIS
  • Created Date: Oct 18 1975 12:00AM