Shipbuilding & Repairing
Companies in this industry build and repair barges, cargo ships, naval vessels, and passenger ships, as well as platforms used for oil and gas drilling and production. Major companies include the shipbuilding division of General Dynamics and Huntington Ingalls (both based in the US), along with China Shipbuilding Industry Corporation and China State Shipbuilding Corporation (China); Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries, and Samsung Heavy Industries (all of South Korea); and Mitsubishi Heavy Industries (Japan).
Asian countries dominate the global shipbuilding industry, with South Korea, China, and Japan producing the vast majority of bulk carriers, containerships, oil tankers, and general cargo ships. Military vessels are a major product of the US shipbuilding industry.
The US shipbuilding and repair industry includes about 700 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion.
Competitive Landscape
Demand for military shipbuilding is largely determined by military budgets. Commercial shipbuilding demand is determined by international and domestic trade, the health of the global economy, and rate of fleet replacement due to age or obsolescence. Small companies usually specialize in building and repair of small commercial vessels. Large companies tend to offer a wide range of building and repair services for both commercial and military vessels, and enjoy economies of scale in purchasing, design, and manufacturing. The US industry is highly concentrated: the largest 50 companies account for about 90% of revenue.
In the US, most companies in the industry are involved in repair; only a handful of active shipbuilders manufacture large military and commercial vessels. US-made military vessels are sold to the US government and its allies. US builders of commercial vessels primarily serves the domestic, or Jones Act, market. (The Merchant Marine Act of 1920, or Jones Act, restricts the carriage of goods or passengers between US ports to vessels built in the US; it also limits foreign repair work on US-flagged vessels.) Due to factors including relatively high US labor costs, Jones Act restrictions, and a highly competitive global shipbuilding market, US imports and exports of ships are negligible.
Products, Operations & Technology
Revenue is generated by designing and constructing new ships including military vessels (about 50% of industry revenue), ship modification (more than 30%),
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