Ulla Lainio
Commercial Counselor, M.Sc. EngineeringBusiness Finland
Washington DC, USA
ulla.lainio@businessfinland.fi
It is lunch break. Shipyard workers rush in and out through the gate to their cars for a quick bite and to scroll their mobiles. Then they go from there promptly back to work to get the ships built.
American shipyards face historically strongest order books on newbuilds, refits and ship repair work. Shipyards specializing on demanding large projects have vessels to build for the next ten years and beyond, challenging the current building capacities. There are more vessels to be built than ever.
The shipyards focus very much on a certain vessel type and ship series. Simultaneously, highly diversified subcontracting networks exist in the country.
Between the World War II and the end of the cold war, United States enjoyed extensive shipbuilding capacity. There were more than twenty capable shipyards in the country. US possessed the world’s strongest naval fleet whereas the newborn Russia, on the ruins of the Soviet Union, was not able to maintain their existing fleet or build new capacity.
Today, the largest concentration, about 75 %, of maritime activity and shipyards in North America sits in Norfolk, Virginia. Norfolk is the worlds’ largest naval base and home and service port to several of the U.S. aircraft carries.
Some shipyards in the US build Jones Act compliant smaller passenger ships and river cruise vessels for American owners. American shipyards don’t build RoPax (roll-on/roll-off passenger) ferries or cruise ships, as these vessel types are being built in Europe and Asia.
United States has ambitious goals to install 30 GW new offshore wind capacity by 2030. Servicing the offshore wind farms will require ca 150 service ships and some installation vessels. The first US installation ship is under construction in Texas. Some US shipyards have commenced building service ships for European offshore wind farm operators, and several have announced readiness to participate the effort. When the fleet is there, it will serve under the Jones Act on the US waters. According to the Jones Act, the vessels operating between the US ports must be built by the US shipyards. The stringent requirement to build in the US using US manufactured ship systems adds challenges to shipbuilding. The US suppliers and domestic supply chains are encouraged in their growth efforts to feed the needs of the shipyards.
United States is aiming to lift the shipyards’ work efficiency to a new level. The target is a fundamental change. Due to stringent labor market, there is a growing interest towards automation, robotics, and new ways of working. The American shipyards, like nearly all the shipbuilding nations, face deficit of welders, outfitters, and skilled project managers. The Americans invest in new 3D printing, AI, cyber and data analytics capabilities. A research center in Virginia carries out studies on parts and components used in ships that could be produced by 3D printing. The industry is ready to take into use 3D printed pumps, valves, and other wearing parts.
In Virginia, Louisiana, and Mississippi the shipyards try to attract workforce with monetary bonuses and they post recruitment signs outside the gates. At one of the largest shipyards, you can walk in to apply a job in a recruitment center and register with a machine, like vising a health care center. The parking lots are packed. Still, new work force is much needed. Repair yards have several ships under work or waiting. In the port of Virginia, there is constant moving of containers packed with equipment, by trucks and rail.
The American shipbuilders are seeking new partners and vendors. First, they look across the United States, outside the borders of their home state. Secondly, they look at the ally countries in Europe, where both large industry and SME’s manufacture the much-needed systems and equipment. The public and private sector, defense, research, and start-ups have started to collaborate to boost shipbuilding capabilities, in a new manner. The new collaboration opens opportunities for the shipbuilding equipment manufacturers, marine, ship systems, ship design and software industry as well as for marine researchers.
Being European and successfully entering the US market, one should be prepared to invest in resources, establish presence in the US and have a long-term plan. The clients in the US expect superior service, both before, during and after the delivery and the service delivery package should be clearly communicated. US is a relationship and network driven economy where the people inside the networks make recommendations and close deals. Sales transactions occur inside these networks. European companies who have succeeded building up US business have employed locals in leadership positions and in the customer interface. Americans preferably do business with other Americans.
United States is the world’s largest and a strong domestic economy with lots of choice and offering and a very different service culture compared to Europe. Simultaneously, the pull is strong, exceeding the domestic supply chain’s capacity to deliver. The window of opportunity is open for collaboration.