Commercial shipbuilding - why not in the UK?

But what about construction of vessels for construction and support of offshore wind turbines and other marine renewables? Marine Renewables use a lot of technology originally developed for oil/gas and defence applications, such as underwater equipment.

Did the Norwegians only make tankers? Bulk carriers, container vessels, and ferries will always be in demand.
The noggies made loads of offshore support ships. For which there is now a limited market. That's why they're screwed.
 
Although this is not shipbuilding news, let alone commercial, it does support my point and producing and selling equipment and systems for maritime use.

And THIS is what happens when it goes wrong. If you don't have the right people it gets painful very quickly.
 

ericferret

War Hero
The noggies made loads of offshore support ships. For which there is now a limited market. That's why they're screwed.
Why the Norwegians will never be screwed as oppposed to other oil rich countries who pissed it up the wall.

Norwegian sovereign wealth fund.
It has over US$1 trillion in assets, including 1.4% of global stocks and shares, making it the world's largest sovereign wealth fund. In May 2018 it was worth about $195,000 per Norwegian citizen. It also holds portfolios of real estate and fixed-income investments.
Total assets: 10,000,000,000,000 NOK (25 Oct...

Owner: government of Norway
 
Yes. It's a sovereign wealth fund. Those funds stay stable and solvent by investment in businesses that are viable. Not by propping up insolvent businesses. Which is why they're nowhere near noggie shipyards.

Look up Kleven Werft. Their recent collapse and subsequent purchase by Green group and proposed diversification into demolition. It's a common pattern that rarely - if ever - works.
 

Yokel

LE
Could commercial shipbuilding be considered strategically important for the West? Oil tankers, bulk carriers, container ships and a few other types are the backbone of the Western economy, unlike Russia and China who both have huge land masses and landed borders.

Has the Trump administration done anything to encourage shipbuilding in American yards?
 

endure

GCM
Could commercial shipbuilding be considered strategically important for the West? Oil tankers, bulk carriers, container ships and a few other types are the backbone of the Western economy, unlike Russia and China who both have huge land masses and landed borders.

Has the Trump administration done anything to encourage shipbuilding in American yards?
What yards? The Jones Act has seen most of them shut down. Protectionism isn't all it's cracked up to be.

 
Could commercial shipbuilding be considered strategically important for the West? Oil tankers, bulk carriers, container ships and a few other types are the backbone of the Western economy, unlike Russia and China who both have huge land masses and landed borders.

Has the Trump administration done anything to encourage shipbuilding in American yards?
What @endure said.

What people always forget about commercial ships is that they are bought and paid for by private companies - not governments. The reason those private companies buy ships is not to transport commodities by sea, it's to make money by doing so. Commodities tend to have a market-based freight rate - ie the consumer will pay up to X $/te or Y$/container. That's the rate and your revenue - you make your money by maximising the profit you make by reducing the cost of providing transport (ie the gap between the market freight rate and the capital and operating costs of your ship to deliver it).

Freight rates are generally in the toilet at the minute. Partly through economic slump - which is unlikely to improve post C-19, particularly if we all decide to initiate a big move to re-shore things - and partly through a significant over-capacity in shipping. Shipping companies are sending 10 year old 8000teu boxships for scrap because they can't make money with them and want to get some cash back. The low oil price is helping with shipping fuel costs, but conversely, it's killing the offshore shipbuilding and shipowning market, because $40/bbl oil removes offshore extraction as an economically viable business, particularly as most of the relatively benign locations have been worked. Is that going to change any time soon? Probably not, given C19, Greta and OPEC.

The cruise industry is in freefall, because their market demographic tends to be vulnerable to C19 and people have rather carelessly bandied terms like plague ship around. That also means that those yards that specialise in cruise ships (eg Fincantieri, Meyer Werft) suddenly have order books that look a lot less secure than they did a year ago. Which means they'll have to consider moving into other forms of shipbuilding to survive - if they can.

All of this means that the demand side of the shipping market is moribund and unlikely to recover significantly any time soon and that the supply side has significant over-capacity. So you have a market where anyone daft enough to want to buy a new ship is going to have to go for the cheapest and most efficient ones they can find - and because they're private companies, they will do precisely that. Given that the Chinese, Japanese and RoK tend to have the most efficient (Japan/Rok) and/or lowest cost (PRC) yards and build about 85%+ of the worlds ships right now, that's unlikely to change any time soon.

Which incidentally is why those people who think the national shipbuilding strategy is going to mean a renaissance in shipbuilding in the UK need some lessons in basic economics.
 

Yokel

LE
What @endure said.

What people always forget about commercial ships is that they are bought and paid for by private companies - not governments. The reason those private companies buy ships is not to transport commodities by sea, it's to make money by doing so. Commodities tend to have a market-based freight rate - ie the consumer will pay up to X $/te or Y$/container. That's the rate and your revenue - you make your money by maximising the profit you make by reducing the cost of providing transport (ie the gap between the market freight rate and the capital and operating costs of your ship to deliver it).

Freight rates are generally in the toilet at the minute. Partly through economic slump - which is unlikely to improve post C-19, particularly if we all decide to initiate a big move to re-shore things - and partly through a significant over-capacity in shipping. Shipping companies are sending 10 year old 8000teu boxships for scrap because they can't make money with them and want to get some cash back. The low oil price is helping with shipping fuel costs, but conversely, it's killing the offshore shipbuilding and shipowning market, because $40/bbl oil removes offshore extraction as an economically viable business, particularly as most of the relatively benign locations have been worked. Is that going to change any time soon? Probably not, given C19, Greta and OPEC.

The cruise industry is in freefall, because their market demographic tends to be vulnerable to C19 and people have rather carelessly bandied terms like plague ship around. That also means that those yards that specialise in cruise ships (eg Fincantieri, Meyer Werft) suddenly have order books that look a lot less secure than they did a year ago. Which means they'll have to consider moving into other forms of shipbuilding to survive - if they can.

All of this means that the demand side of the shipping market is moribund and unlikely to recover significantly any time soon and that the supply side has significant over-capacity. So you have a market where anyone daft enough to want to buy a new ship is going to have to go for the cheapest and most efficient ones they can find - and because they're private companies, they will do precisely that. Given that the Chinese, Japanese and RoK tend to have the most efficient (Japan/Rok) and/or lowest cost (PRC) yards and build about 85%+ of the worlds ships right now, that's unlikely to change any time soon.

Which incidentally is why those people who think the national shipbuilding strategy is going to mean a renaissance in shipbuilding in the UK need some lessons in basic economics.
How viable will relying on South Korean and Japanese yards be in the event of Kim Wrong Un and his sister deciding to go ballistic, and Beijing deciding to flex its muscles by stopping deliveries of vessels of customers with politics different from theirs?

We live in interesting times.
 

endure

GCM
How viable will relying on South Korean and Japanese yards be in the event of Kim Wrong Un and his sister deciding to go ballistic, and Beijing deciding to flex its muscles by stopping deliveries of vessels of customers with politics different from theirs?

We live in interesting times.

Why would Beijing stop delivery of Chinese built ships to customers? After all as the world's largest purveyor of tat there's got to be a way for them to deliver it ;-)
 
How viable will relying on South Korean and Japanese yards be in the event of Kim Wrong Un and his sister deciding to go ballistic, and Beijing deciding to flex its muscles by stopping deliveries of vessels of customers with politics different from theirs?
That's called a market judgement for private firms, which they are quite capable of making. Given our own governments can't find the cash to properly fund the navy, surely you don't suppose that they're going to try and involve themselves in something they're even less qualified to do?

Should that nice Mr Xi decide that his country and its industries are going to stop accepting cash from the worlds shipowners (a major supply side adjustment), then the market will react accordingly. But it ain't going to do so over imagined fears of a mental tubster and his DF sister, when there's huge overcapacity, constrained demand and shortage of liquidity (cash).
 

Yokel

LE
Why would Beijing stop delivery of Chinese built ships to customers? After all as the world's largest purveyor of tat there's got to be a way for them to deliver it ;-)
Flexing their muscles in support of political objectives and their allies/client states? There is no separation between the political interests of the Communist leadership and the actions of the state, and all companies and individuals are subordinate to them.

That's called a market judgement for private firms, which they are quite capable of making. Given our own governments can't find the cash to properly fund the navy, surely you don't suppose that they're going to try and involve themselves in something they're even less qualified to do?

Should that nice Mr Xi decide that his country and its industries are going to stop accepting cash from the worlds shipowners (a major supply side adjustment), then the market will react accordingly. But it ain't going to do so over imagined fears of a metal tubster and his DF sister, when there's huge overcapacity, constrained demand and shortage of liquidity (cash).
Err...

Just in time can easily mean just too late.
 
Flexing their muscles in support of political objectives and their allies/client states? There is no separation between the political interests of the Communist leadership and the actions of the state, and all companies and individuals are subordinate to them.
Really? I had no idea whatsoever. I thought Huawei was some sort of fluffy philanthropist company. F8ck me - every day's a schoolday etc etc.

The single biggest fear of the PRC is that the masses become restless. Which is why their surveillance system is what it is, to predict, suppress and prevent dissent. Trouble is the wellbeing of their economy - and therefore the masses - is their ability to sell stuff to the world and use the cash generated to buy both raw materials to make more stuff and improve standard of living. If that influx of cash stops - for example through either public or government imposed boycotts of Chinese goods, or more bizarrely in an act of self-inflicted harm by refusing to sell people stuff - what do you think is going to happen? Will the populace be happy with the CPC, or slightly brassed off, particularly if they're unemployed and can't afford to feed their families? There are quite a few people in China, numbered in the billion last time I looked, which might just pose a teensy weensy little crowd control problem.

Err...

Just in time can easily mean just too late.
Which - for an industry owned and run by shareholders - is a private, market decision, based on risk assessment, not for Government. Or are you some sort of socialist, hankering for the return of nationalisation?
 

giatttt

Old-Salt
And THIS is what happens when it goes wrong. If you don't have the right people it gets painful very quickly.
The yard didn't want to build the ships and the customer did not want that design, too big and with a hybrid drive that could only be used for short sections of each journey negating the imaginary savings. A feat of such complete incompetence that it made many historical occupants of main building look like geniuses.

IIRC the hulls now have a negative value.
 
The yard didn't want to build the ships and the customer did not want that design, too big and with a hybrid drive that could only be used for short sections of each journey negating the imaginary savings. A feat of such complete incompetence that it made many historical occupants of main building look like geniuses.

IIRC the hulls now have a negative value.
She's a genius, wee Jimmy K. No-one could have seen that coming. Oh, wait.....
 

endure

GCM
Which - for an industry owned and run by shareholders - is a private, market decision, based on risk assessment, not for Government. Or are you some sort of socialist, hankering for the return of nationalisation?
You're fighting a bit of a losing battle there. Most people seem to think that the merch is some sort of extension of the RN to be used in times of trouble (see the Falklands) rather that a private for profit industry that has nothing whatever to do with the government.
 
We used to be world leaders in supplying tat.
Still are.

Celebrity Big Brother.
Britain's got Morons
I'm a non-entity, get me out of here.
Strictly Come Dancing.
EastEnders
Anything with Rangash Romulan

the list is - literally - endless.
 

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