How do some countries get to be good at making cruise ships?

While everyone else on board was enjoying Champagne and beautifully presented 12-day-old food, I was thinking about engineering and economics…

Building a cruise ship is like building a city: power generation, fresh water generation, sewage treatment, residential and commercial real estate, etc. There are competitive shipyards in only a handful of countries and they aren’t always the countries that one associates with being the most efficient at building cities.

http://www.cruisemapper.com/wiki/757-cruise-ship-building-construction-design shows that Germany is at the top of the list for construction and refitting. But then Italy, not typically associated with efficiency or speed, is also cranking out ships for Carnival. The French are able to squeeze some shipbuilding time in during their 35-hour work weeks. All of the Scandinavian countries have great maritime traditions, but only Finland is successful in building cruise ships.

Our particular ship, the Crystal Symphony, was built in Finland in 1995 and is currently being renovated in Hamburg (one month of work, 24 hours per day). However, the Wikipedia page for this ship shows that the U.S. is able to compete at least in minor refitting projects, the Crystal Symphony having been refitted in Norfolk back in 2006 and in Boston(!) in 2009 (maybe things aren’t as dire as suggested in U.S. versus German infrastructure spending and results).

For the bread-and-butter commercial ships, such as container ships and tankers, it may be that government subsidies are partly responsible for where they are made. See “Decline in U.S. Shipbuilding Industry: A Cautionary Tale of Foreign Subsidies Destroying U.S. Jobs” by Aaron Klein, an Obama Administration U.S. Treasury bureaucrat:

America had a long and storied commercial shipbuilding industry. After the Second World War, American shipbuilding was at its peak, leading the world. As one news story noted in 1985, “Thirty years ago, U.S. shipyards built most of the world’s fleets.”

Today, America ranks nineteenth in the world for commercial shipbuilding, accounting for approximately 0.35 percent of global new construction. Put another way, only one-third of one-percent of new commercial shipbuilding occurs in the United States, despite the fact that we are the world’s largest economy. What happened?

The author goes on to chronicle subsidies by South Korean, Japan, and China. But these countries aren’t competitive in building new cruise ships.

And if government subsidies are the main story, why aren’t Americans able to compete in supplying engines and other components? Are the engines and drive systems made in Switzerland, England, or Finland because those countries are subsidizing companies that make components for ships?

Related:

  • “China’s Subsidized Shipbuilding”: “A simple price gap analysis shows that Chinese ships cost 7.3 percent less than rivals’ ships. Controlling for quality differences, they should be around 3 to 5 percent cheaper, which leaves a 4 percent gap”

11 Comments »

  1. superMike

    October 11, 2017 @ 1:10 pm

    1

    I was under the impression that, on a typical cruise, at least some of the fresh food was loaded every port day. Is this not the case?

  2. lion

    October 11, 2017 @ 1:36 pm

    2

    European ship building starts with the IMF printing money. They’re all getting slaughtered by Koreans. They’re better off letting it go to the Koreans & focused on making powerpoint presentations about what self driving cars will do, someday..

  3. philg

    October 11, 2017 @ 8:13 pm

    3

    superMike: I thought so too, but learned otherwise on both Royal Caribbean and Crystal.

  4. superMike

    October 11, 2017 @ 9:33 pm

    4

    Good to know! Steaks: yes, “fresh” fish: no, apparently!

  5. Jim

    October 11, 2017 @ 9:54 pm

    5

    superMike: Cruise ships do indeed load fresh stores onto their vessels at most ports of call. They also pump out waste and take on fresh water, and refuel. I work at the Port of Los Angeles (San Pedro), which has a ship 4-7 days a week. The Longshoreman load stores pretty much all day.

    They may use plenty of frozen food but they are constantly restocking it. The exception, of course, is when ships “tender” instead of stopping dock side.

    Could be, Phil, that the countries you visited have prohibitive costs preventing this.

    For the record, Royal Caribbean is a pretty low-end cruise line…along with Carnival & Princess. I suggest you take a look at the new Viking Ocean cruise ships…built in Italy.

  6. philg

    October 12, 2017 @ 12:56 am

    6

    For Royal I was told that the #1 priority is avoiding food poisoning. Therefore they have a limited number of approved vendors. Both Royal and Crystal said that they buy more food mid-cruise only if they mis-plan and run out.

  7. philg

    October 12, 2017 @ 12:58 am

  8. Senorpablo

    October 12, 2017 @ 1:53 am

    8

    Certainly shipbuilding requires tremendous engineering. Didn’t you once say that all the best engineers in the US work in defense, whereas in Japan there is more engineering talent available for the auto industry? Large US companies have a history of resting on their laurels and short term thinking. I expect the shipbuilders are no different than steel mills, GE, Chevy, Ford, etc. and simply became less competitive. Union labor may also have played a role.

  9. the other Donald

    October 12, 2017 @ 10:28 am

    9

    There is a great deal of artisanal craftsmanship in fitting out a cruise ship. I’m surprised they don’t build them in commodity yards and move them to Europe for finishing, sorta like the private jet delivery shops.

  10. Neal

    October 12, 2017 @ 12:14 pm

    10

    Isn’t the cruise ship building boom a relatively recent thing? Perhaps something in the environment three or four decades ago enabled the capability to survive in Europe but not the US, thus enabling the Europeans to catch this new wave when it hit.

  11. superMike

    October 13, 2017 @ 12:51 pm

    11

    I remember being amazed by seeing this. they actually make ships kind of like flat-pack furniture now, so it’s not the old labor-heavy thing it used to be. https://www.youtube.com/watch?v=_lmSI-_gAig

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