In the world, there are about 72.000 ships which are perishable in the environment of irresistible combination of salt water and the classification survey. On the other hand, there is the seaborne cargo of approximately 3.000 million tons which are obliged to be carried by this perishable fleet that consists of about 600 million DWT"^. However, from the technical and commercial points of view, the environment in which shipbuilding survives is subject to change according to market conditions, technology, world economic growth and so on.
As has been known, the world shipbuilding industry has witnessed extensive developments within the last decade. These developments have covered changes in regional shipbuilding capacity and changing market conditions.
In some countries, substantial capacity reductions have been realized, but in others the capacity has been significantly expanded. Being heavily dependant on freight rates influenced by depression in the oil and bulk market, the orderbook for newbuildings of bulk carriers and tankers at the beginning of last decade was affected. As a
Stopford, R.M. "A New Life for Shipbuilding in the 1990s?", The 4th International ShipbuiIding&Ocean
Engineering Conference, p.46, Helsinki, 7-lOth Sept.1986 45
result the world shipbuilding industry had no little chance to build dry and liquid bulk vessels which are traditionally main supporters of the shipbuilding industry*^. As being parallel with the recovering freight rates in dry and liquid bulk markets, the placing of orders have started. The future optimistic trend in the freight market was in favour of the placing contracts for newbuildings in late 1980s. Despite the complex situation of fluctuating market conditions in the cases of dry and liquid vessels, certain types of ships such as container ships and gas carriers have continued to provoke the high level of newbuilding interests.
There may be an answer to that why governments are very much interested in the shipbuilding industry. It lies, inter alia, on the nature of industry itself. From the economic development view point, this nature can be explained by governments' decisions which put the shipbuilding policy into the national development strategies on the way through industrialization. In short, the shipbuilding industry is one of the heavy industries that national development can totally rely on it. On the other hand, ancillary industries are very much attracted by the shipbuilding industry. Owing to the fact that the shipbuilding industry is labour intensive assembly works, numerous products which are manufactured by electric- electronic industry, machinery and equipment industry, chemical industry and steel industry are utilized to build ships. Therefore, the shipbuilding industry can be considered as a force which promotes all related industries within an economy. - •
“ Ocean Shipping Consultants "World Shipbuilding and Newbuilding Prices to 2000", p.9, Surrey, 1989
The changes in the shipbuilding environment under the government influences throughout the last two decades have been in capacity, productivity, newbuilding prices and shifting of the international division of labour. After emergence of Japan in the early 1960s as a leading power which produces 50% of world shipbuilding output at present, the shipbuilding market first shocked by the 1973 oil crisis* and as a consequence stagnation in world economic growth. Until the first oil crisis in 1973, advanced technology was inserted into the production which included the construction of series-built vessels in the shipbuilding industry. Hence, productivity increased in shipyards. The world output reached 21 million GRT in 1970*^. Despite the heavy* shock from the oil crisis, the output rose substantially to 34 million GRT in 1975 because of early placements’ of newbuildings before 1973. During this period, economies of scale helped the
shipowners to enlarge the- ships in size especially in bulk trades. Additionally, the growing availability of government financial support encouraged the commercial finance institutions to lend and the shipowners to order. Moreover, because of cheap government loans, many yards
t *
expanded their existing capacity by building new facilities. Apart from this expansion of activities, new shipyards were erected with optimism for the long run in the shipbuilding market.
In the late 1970s, the results derived from extensive investment in the shipbuilding industry appeared as overcapacity in certain shipping markets such as the tanker market. In spite of the existing recession and surplus tonnage, government originated support continued
^ Drewry Shipping Consultants "World Shipbuilding Market Prospects to 2000", p.l3, London, 1988
to be more competitive in the market. As a result of these proceedings, the shipbuilding industry continued to shift to the far eastern dynamic Asian countries. Loosing countries were those from Western Europe by reducing the shipbuilding capacity by 20% from 22.9 M CGRT in 1977 to 18.4 M CGRT in 1980'^. Due to a decline in world trade in 1981, shipbuilding was confronted with pressure driving the newbuilding prices to their lowest recorded level®. Namely, since 1980, there have been changes in three major shipbuilding regions. They were Japan, Western Europe and newly industrialized far eastern countries. After fluctuations in the capacity of its shipbuilding industry, recently, Japan has decided to keep its capacity constant without any increase around 5 M CGRT/year'’’. Western Europe has been under the serious restructuring program which reduced the labour, force from 192.000 in 1980 to 144.000 in 1984^*^. In fact, as a result, the Republic of Korea has been gradually taking over the share of Western Europe. This share was almost 50.000 shipbuilding jobs which were being shifted to far eastern countries. Table 7 is showing shipbuilding employment in major regions (countries)
Drewry Shipping Consultants "World Shipbuilding Market Conditions to 2000", p.l5, London, 1988
® Stopford, R.M. and Barton, J.R. "Economic Problems of Shipbuilding and the State", Maritime Policy Management, p.38, Vol.l3 No.1, 1986
CGRT: Compensated Gross Register Ton which is intended to reflect the work effort involved in producing one cubic meter of enclosed ship's space and, thus, constitutes an approximation.
Stopford, R.M. and Barton, J.R. "Economic Problems of shipbuilding and the State",Maritime Policy
Management, p.39, Vol.l3 No.1, 1986
during the 1980s’-^.
3.3.- TECHNO-ECONOMIC DEVELOPMENTS IN SHIPBUILDING