There is currently a lot of debate around the world about shipbuilding and building up navies. There is a need to build more ships, ostensibly the grey-coloured variety, but there are also politicians simplifying the whole issue by saying, “We’ll pump more money into it than ever before!”
If it were only that simple…
Take the Trump administration’s current position, for example. The administration’s goal of a shipbuilding boom is a part of the “make America great again” policy agenda. The President signed an executive order in April last year to bolster the shipbuilding industry. Since then, there has been a lot of debate over whether is possible.
The key ingredients are steel, labour, and, of course, a shipyard. For steel, there needs to be a significant increase in producing marine grade, class-approved steel. Looking at 2024 data, the US produced roughly 80 million tonnes, compared to China’s one billion tonnes, which is more than 12 times the amount.
You can’t build ships without steel, so a massive investment is required to build more steel foundries, and that is not a five-minute job.
And then of course, there’s the labour: not just the labour to produce the steel, but the all-important shipbuilding. There are skills that have been lost to other industries, and in some cases gone completely or were never there at all. The skills required to build ships on scale takes up to a generation to learn or relearn.
With the current absence of shipyards in the US, where are these skills coming from? And then, of course, the inefficiency of the shipyards in terms of production and cost effectiveness has not helped matters. The Jones Act and heavily unionised shipyards have stifled any means of production efficiency and gains in new production methods. US-built ships have a reputation for being overpriced and extremely late in delivery – at best.
For example, in the late 1980s, the US Navy ordered two new fleet oilers, which two different shipbuilding companies failed to complete. After five years and US$450 million spent, the two unfinished hulls were placed in lay-up and never completed.
Today, the picture is no better. The navy set a goal of producing two submarines per year with the project completed by 2028. However, in June 2024, the program’s rate of production was at about 60 per cent of its annual goal, putting it years behind schedule. And the Columbia-class submarine program is also delayed and could end up costing taxpayers hundreds of millions of dollars in additional construction costs for the first submarine alone.
A 'proven design' really means, 'the same mess again, please.'
So the argument then turns to other countries that were getting subsidies from their governments, which in turn would artificially lower foreign building costs, giving them an advantage. Consequently, US shipbuilders began to loudly complain about the unfairness of foreign subsidies in the hopes that the government would reinstate a more generous subsidy program.
However, much to their dismay, then-President Bill Clinton was instead able to secure an agreement with OECD countries to jointly remove shipbuilding subsidies and level the playing field.
This led to the US shipbuilders (who still had government subsidies in the form of generous mortgage financing programs) quickly deciding that subsidies “weren’t so bad after all,” and immediately pivoted to campaigning against the agreement. In the end, the agreement went forward without the US. So, back to square one!
However, even if, against all odds, these issues were overcome, and in a time scale that would be simply Hollywoodesque and unprecedented in history – beyond that of the “liberty ships” program of World War II – there remains the issue of design.
Those that write the statement of requirements (SOR) for these newbuilds always have the immortal words “proven hull form.” What this simply means is they want a hull or a design that has been built and proven. This is compounded by an SOR requiring an overly complex design (because we can), which leads to outsourced design capabilities (beyond the yard’s ability), and concurrent design-build processes.
In other words, the US Navy creates high-level requirements for complex, multi-role ships, and it outsources the design of these ships to third-party contractors, which is beyond their ability to deliver in terms of cost and time.
However, as noted, this strategy will backfire. As design work is completed, changes to ships under construction are often required, resulting in costly and time-consuming rework and significant delays.
The finished design – if eventually completed – is then a hodge podge of corrections and mitigation to fit a budget and deadline that was not meant to be. So, when the vessels are eventually delivered, they are flawed right out of the box before they even begin operations.
So, a "proven design" really means, "the same mess again, please," and zero progress in new and current methods and/or findings from research. The design is just a rehash of an “old” design that is outdated and unsuitable for the multi-role capacity it was even originally designed to satisfy.
Ergo, since there is very little, if any, room for evolution, or modified or new thinking in terms of design, in the SORs that are issued, the status quo continues.
This accountancy management practice of outsourcing design work creates barriers between those setting requirements and those creating designs
The US is not alone in this endeavour. In the 1950s, more than 50 per cent of the entire world’s merchant fleet were designed and built in the UK. Today, it is a mere fraction of one per cent. This is similar to the current state of the US, which is less than 0.2 per cent, compared to China’s 75 per cent.
The UK, like the US, lost its own ability to design in-house, thus leading to a lack of interrogation and/or reviewing of designs. The UK’s British Admiralty/BSRA became part of the Ministry of Defence and then became QniteQ and then BMT, and so on, each time diluting the original purpose of the institution that designed warships, the expertise slowly transferring into other sectors.
This is no different with the NAVSEA in the US. Outsourcing generally does not equate to cheaper and more efficient in shipbuilding, and that has been proven!
This accountancy management practice of outsourcing design work creates barriers between those setting requirements and those creating designs as well as the shipyards required to build the designs in the first place providing a “fixed” price.
Thus, any modifications during the detail design phase, or changing requirements, to modify the design during the build become even more difficult, and the capability for such reviews and consideration are no longer in-house, resulting in spiralling costs.
If we now look at the situation in Ukraine through this lens of incalcitrance and the “proven hull” mind-set, a very different picture emerges. The axiom of “necessity is the mother of invention” shouts loud and clear from the rooftops.
There are many valuable lessons to be learned from the existing war and the changing face of warfare in Ukraine. Notably large and overly complex design requirements are discarded to the rubbish bin. Drones and small, nimble, highly manoeuvrable flexible platforms have become the weapons of choice and, more importantly, can be designed and built in a time frame shorter than any naval command’s set of meetings to merely discuss their SOR concept.
The UK’s First Sea Lord’s speech last year put it best: “If we cannot strip back our own bureaucracies, we will not be able to move fast enough. The pace of the threat, the pace of the technological change, demands a different approach from us.”
What he said.