Ship Repair and Maintenance Services Market Size, Share & COVID-19 Impact Analysis, By Vessel Type (Commercial Vessel, Naval Vessel), By Commercial Vessel (Fishing Vessel, Container Ship, Passenger Ships & Ferry, Others), By Naval Vessel (Aircraft Carriers, Submarine, Frigates, Czxorvettes, Others), By Service (General Service, Engine Parts, Dockage, Electric Works, Others), By Dock Type (Graving Dock, Floating Dock, Others), By End-user (Government & Defense, Commercial), and Regional Forecast, 2022-2029

The global ship repair and maintenance services market size was valued at USD 33.60 billion in 2021. The market is projected to grow from USD 34.60 billion in 2022 to USD 45.70 billion by 2029, exhibiting a CAGR of 4.10% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with ship repair and maintenance services experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global ship repair and maintenance services market exhibited a decline of -4.90% in 2020 as compared to 2019.

Ship repair and maintenance services can be planned maintenance or unplanned maintenance. Ship repair and maintenance is a crucial part of vessel operations in which the principal elements of vessels that want to be maintained are the engine, electric system, amongst others, the usage of preservation applications. Maintenance applications are installed to preserve the vessel in the right working circumstance at any time. For this, the ship is taken to a place called a repair dock, where services such as rust removal, old paint removal, and cleaning are performed. There are various types of repair docks such as dry docks, floating docks, shiplift, slipaway, and others. In addition, there are four types of maintenance, predictive maintenance, corrective maintenance, risk-based maintenance, and condition-based maintenance.  

Moreover, a ship needs maintenance to keep it running well and efficiently. This can be done as part of an inspection or as planned maintenance. Inspections are carried out on a regular basis, but regular maintenance should be carried out according to the ship's log indicating how often certain items require inspection and/or maintenance. This includes regular inspections (to check for damage), lube change intervals, and major overhauls (if all equipment is disassembled and reassembled).

COVID-19 IMPACT 

COVID-19 Pandemic Hampered the Market Due to Decrease in Maritime Trade Activities

Since the COVID-19 outbreak in December 2019, the disease has spread across the globe, with the World Health Organization (WHO) declaring it a pandemic. The global impacts of COVID-19 have had a significant impact on the global market in 2020 and 2021.

Furthermore, UNCTAD estimates global merchandise trade to have fallen by 5% in the first quarter of 2020 and expects a deeper contraction of 27% in the second quarter. For the full year, UNCTAD expects a drop of 20%.

The World Bank further noted that merchandise trade appeared to have bottomed out in April, falling nearly 20% year on year after a 10% decline in March. The trade contraction caused by COVID-19 is deeper than the one observed during the financial crisis of 2008-2009.

Moreover, the first quarter of 2020 was marked by widespread lockdowns, travel restrictions, fast-rising unemployment, government rescue packages, and oil and stock market crashes.

Additionally, the COVID-19 pandemic enforced travel bans, which included the use of ships, and luxury cruises, which led to a decline in the market growth of ship repair and maintenance.

LATEST TRENDS

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Growing Demand for Robot Utilization in Ship Repair and Maintenance Services to Enable Green Shipping to Spur Market Opportunities 

With the increase in robotics in various industry sectors and increasing awareness of green shipping, technologies that help in higher fuel efficiency and reductions of carbon dioxide emissions are in great demand. Hull roughness management using hull cleaning robots can play a vital role in this regard.

Robots are used extensively for the inspection of ship parts such as hulls. The Robotic Hull Bio-inspired Underwater Grooming Tool (Hull BUG) is a small self-driving vehicle that weighs 30-40 kg.

It uses four wheels and is mounted on the underside of the hull using a vacuum device that creates a vortex between the BOW and the hull. It crawls on the hull surface and performs frequent grooming (light cleaning of dirty films). Sensors provide obstacle avoidance, path cleaning, and navigation functions.

With a fluorometer, the robot detects biofilms and uses a rotating brush or jet of water to scrape off the soiled film. Moreover, with the increase in the use of robots, it is estimated that, if these robots are put into practice, there can be 5% improvement in fuel efficiency through proactive grooming, translating into savings of USD 15 billion annually for the shipping industry worldwide and reduction in 1 billion tons of greenhouse gases emitted by the fleet.

DRIVING FACTORS

Growing Demand for New and Advanced Ships in Maritime Industry to Boost Market Growth

Technology plays an integral role in determining naval power, and it is clear that modernization is the way forward for nations to establish and maintain maritime control.

Modernization in shipping is not limited to giant frigates and stealth submarines. From small boats, infrastructure, logistics, and operations to ports and service centers, it covers all relevant areas. Modernization means completely changing the basic approach to shipbuilding, right down to the basics.

Modernization and advancement in ships are related to both commercial and naval vessels. Furthermore, among the many factors affecting the need to modernize naval power, forthcoming threats from countries with their own political challenges are of particular importance.

The sea providing free access to all nations of the world makes it imperative that we have always had an operational and capable military force that threatens the social integrity of our civilization. The runaway of these activities at sea causes many lives and property losses and damages the economy.

Increase in Sea Trade Activities and Satisfactory Rules Related to Maritime Trade Drives the Market Growth

Special advantages of international trade, sea transport, ship transport, around 90% of the world's import & export products, and the rising average age of ships are expected to drive the global ship repair and maintenance services market growth. For example, in 2020, the average age of all the ships in the merchant fleet was over 20 years. Furthermore, general cargo ships were the oldest type of vessels, with an average age of around 26 years, the world’s cargo ships which accounted for 65% of the entire fleet were older than 14 years, in contrast with over 18% of bulk carriers.

As a result, the increasing average age of ships presents a significant opportunity for the global market.

Additionally, several national governments have taken steps to support the shipping industry. For example, shipyards are eligible for various tax credits for routine ship repair and maintenance services. It is one of the major drivers of the global market.

For instance, in June 2021, the Indian Central Board of Indirect Taxes and Customs (CBIC) notified a reduction in the Goods and Services Tax (GST) rate applicable to ship repairing services offered in India as part of the tax relief approved by the GST Council.

RESTRAINING FACTORS

High Maintenance Cost and Rise in Inflation Rates to Hamper the Ship Repair and Maintenance Services Market Growth 

Costs associated with vessel maintenance and repair are around 10%, but can reach 20-30% of total operating costs (OPEX) for older vessels. These costs are related to the age of the ship but are often also related to unscheduled repairs, missing spare parts, and lack of qualified technicians.

All of these problems can be mitigated by creating and following a maintenance schedule, not only when the vessel is in service but also during the design phase. Maintenance work in ship operations can only be successful if the ship, master, and crew are prepared and coordinated.

Furthermore, according to Drewry’s estimations, the average daily operating costs on 46 different types of vessels and sizes increased by 2.2% in 2019, in comparison to underlying increases of 1.1% and 0.7%, respectively, in the previous two years.

Most of the increase in operating expenses in 2021 was attributed to marine insurance costs, which increased by 4.3%, slightly higher than the 4% recorded in 2020. This is due to the tightening of Hull & Machinery (H&M) and Protection & Indemnity (P&I) premiums in 2020, which will continue through 2021. However, in-store and repair & maintenance (R&M) spending decreased as some COVID-19-related costs decreased and downtime for ship maintenance was limited throughout the year.

SEGMENTATION

By Vessel Type Analysis

Naval Vessel Segment Dominated in 2021 Owing to High Investment to Modernize Naval Fleet by Government

By vessel type, the market is bifurcated into commercial vessel and naval vessel. The naval vessel segment dominated the market in 2021. Increasing demand for technologically advanced and modern naval ships due to cross-border tension drives the market growth.

• In August 2022, the U.S. Navy awarded a contract worth USD 108 million to BAE Systems to repair the guided-missile destroyer, USS Ross. The process is anticipated to take more than 500 days.

The commercial vessel segment will witness significant growth during the forecast period owing to increase in marine fleet age. Moreover, the COVID-19 pandemic led to a significant amount of backlog for scheduled repairs.

• In April 2022, Harland & Wolff awarded a dry-dock contract for two cruise ships from P&O Cruises and Cunard. The project is anticipated to take 33 days in total.

By Commercial Vessel Analysis

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Container Ship to Grow at Highest CAGR Due to Wide Usage in E-Commerce During the Forecast Period

Based on commercial vessel, the market is segmented into fishing vessel, container ship, passenger ship & ferry, and others. The container ship segment is expected to become dominant in the market due to its wide range of applications in the e-commerce sector. Additionally, global sea freight was severely disrupted by the COVID-19 pandemic and is recovering with improvement in ship repair & maintenance orders for container ships. The fishing vessel segment is estimated to be the second largest segment during the forecast period. The growth in the segment is owing to the aging fleet of fishing vessels and low cost of repair and maintenance work compared to other types of ship.

By Naval Vessel Analysis

Aircraft Carrier Segment to Grow at Highest CAGR Due to Rise in Demand for Modernization During the Forecast Period

Based on naval vessel, the market is segmented into aircraft carriers, submarine, frigates, corvettes, and others. The aircraft carriers segment is expected to become dominant in the market due to increase in focus by naval forces for upgrading and modernization projects.

• For instance, in August 2021, Huntington Ingalls Industries (HII) was awarded a contract to support the U.S. Navy fleet ship, including aircraft carriers and west coast surface ship. The contract value is USD 273 million and is estimated to be for five years.

By Service Analysis

General Service Segment to Grow at the Highest CAGR Due to Low Cost Associated with Repair Work

Based on service, the market is segmented into general service, engine parts, dockage, electric work, and others. The general service segment consists of services such as painting, coating, general inspection, and others. The segment is projected to dominate the market owing to a large number of contracts for such services due to the low cost associated with the same.

The engine parts segment is projected to be the second largest during the forecast period. The growth is due to the increase in engine maintenance post-COVID-19 pandemic. In April 2021, Wartsila signed a long-term contract to perform optimal engine maintenance of five LNG carriers owned and operated by Greece-based Minerva Gas.

By Dock Type Analysis

Graving Dock Segment to Dominate Market Due to Wide Application in Repair and Maintenance Work

Based on dock type, the market is segmented into graving dock, floating dock, and others. The graving dock segment is anticipated to dominate the market during the forecast period. Graving dock is considered the most common form of dry docking for ship repair and maintenance services. Moreover, the rise in backlog during the pandemic has surged the usage of graving dock.

By End-user Analysis

Government & Defense Segment to Dominate the Market Due to Increase in Investment in Ship Repair and Maintenance Services

Based on end-user, the market is segmented into government & defense and commercial. The government & defense segment is anticipated to dominate the market during the forecast period. The growth in the segment is owing to favorable investments by naval and government bodies for the modernization and upgrade of the naval fleet.

REGIONAL INSIGHTS

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The global region is studied across North America, Europe, Northern Europe, Asia Pacific, South East Asia, and the Middle East.

North America is anticipated to show a significant rise in the market during the forecast period. North America has the highest ship repair and maintenance services market share and is considered to be an important region for ship trade. Additionally, the region has a growing need to increase operational efficiency while reducing environmental impact. Additionally, the ruling U.S. government is increasing defense funding due to increased demand for naval vessels and the threat of enemy interference in coastal areas. It may also increase the demand for industrial-related energy vessels and some other civilian vessels.

During the forecast period, the European market is predicted to grow significantly. The market in Europe is driven by recent developments in frigates and offshore patrol vessels for their lethality, speed, and maneuverability. Incidents such as the entry of illegal immigrants and rising drug trafficking in countries such as Italy, Spain, and Albania have increased the demand for naval vessel development in the region. Furthermore, other factors, such as the implementation of the United Nations Convention on the Law of the Sea (UNCLOS) III norms, necessitate the need for exclusive economic zone patrols of up to 200 miles across borders, followed by low-cost naval forces. The presence of key shipbuilding industries such as United Shipbuilding Corporation, Damen Ship repair Rotterdam (DSR), and others boost the market growth.

The Northern Europe region is anticipated to witness significant growth during the forecast period. Northern Europe is the fourth largest cruise market, with traffic up by 4.4% year-on-year, according to the cruise industry news annual report. Furthermore, Turku Repair Yard Ltd, the largest repair shipyard in Northern Europe in Southwest Finland, is acquiring new customers from beyond the Baltic Sea while expanding its service segments for existing customers.

Asia Pacific is expected to showcase the highest CAGR during the forecast period in the market. The growth in the region is owing to the growing investment by key players in the expansion of ship repair facilities as well as ship-building capabilities. Furthermore, the presence of key shipping industries, such as Cochin Shipyard, Goa Shipyard, Mazagon Dock Shipbuilders Ltd, Garden Reach Shipbuilders, and Engineers Limited, Hyundai Mipo Dockyard, Dae Sun Shipbuilding Engineering, China Shipbuilding Industry Corporation, and others, boosts the market growth.

The South East Asia region is projected to grow significantly during the forecast period. The growth of the market is attributed to the increased seaborne trade in the region. Moreover, the growth of container trade in Southeast Asia indicates a favorable trading environment for shippers and exporters in the region. Malaysia, Vietnam, and Singapore have emerged as strong competitors for the world's container shipping companies looking to diversify their cargo trade routes from linear routes to more diverse routes.

The Middle East market is expected to witness moderate growth during the forecast period. The region is anticipated to grow owing to the increase in shipbuilding activities and dry dock capacity in the region. For instance, for many years, Dubai dry-docks, operated by Drydocks World Dubai (DWD) and ASRY in Bahrain were the only two locations in the Middle East really suitable for large tanker repair and maintenance work. Recently, there has been an addition of two new yards capable of handling VLCCs. Such developments in the region led to growth in the market.

KEY INDUSTRY PLAYERS

Increasing Capacity for Ship Repair and Maintenance Services Owing to the Surge in Demand to Drive Market Growth

The competitive landscape of the market shows the dominance of select players such as Sembcorp Marine Ltd, Cochin Shipyard Ltd, BAE Systems, Mazagon Dock Shipbuilders Ltd, and others. These companies focus on the expansion of ship repair and maintenance services capabilities owing to the increase in demand post-COVID-19 and the backlogs that occurred due to the pandemic. Moreover, the key players are expanding the dry docks to accommodate more ships for repair and maintenance work. For instance, in August 2022, Cochin Shipyard Limited planned to expand the dry dock spread over 15 acres on its campus by 2024 owing to the increase in contracts for ship refit works.

LIST OF KEY COMPANIES PROFILED:

• Sembcorp Marine Ltd (Singapore)


• Cochin Shipyard Limited (India)


• Austal (Australia)


• Chantiers de l'Atlantique (France)


• Detyens Shipyards (U.S.)


• Mazagon Dock Shipbuilders Ltd (India)


• Garden Reach Shipbuilders and Engineers Limited (India)


• Damen Shipyards Group (Netherlands)


• BAE Systems (U.S.)


• Goa Shipyard Ltd (India)

KEY INDUSTRY DEVELOPMENTS:

• October 2022 - The U.S. Navy has down-selected 14 companies to repair, maintain, and modernize non-nuclear amphibious and surface combatant ships in Norfolk, Virginia as part of two indefinite-delivery/indefinite-quantity multiple award contracts.


• September 2022 - Vigor Marine, a shipbuilding and repair company based in Portland, Oregon has been awarded a USD 31 million fixed-price contract to complete USS John Paul Jones (DDG 53) 2C1 in drydock. The contract contains options that, if exercised, will increase the cumulative value of the contract to USD 131 million. Work will be conducted in Seattle (77%) and Everett, WA (23%) and is expected to be completed by February 2024.


• August 2022 – The U.S. Navy awarded a contract to L&T Shipyard at Kattupalli, Chennai for the ship repair work of the U.S. Navy Ship (USNS) Charles Drew.


• December 2021 - The U.S. Navy has awarded four five-year contracts worth USD 1.74 billion combined to procure maintenance, repair, and modernization services for non-nuclear surface combatant and amphibious ships. The multiple-award, indefinite-delivery/indefinite-quantity contracts covering lots 1 through 4 include scheduled docking and undocking, continuous and emergent maintenance support for amphibious and surface combatant ships in San Diego.


• August 2021 – The U.S. Navy awarded multiple contracts worth USD 2.76 billion to maintain its East Coast-based Littoral Combat Ships. BAE Systems and Fincantieri Marine Systems North America were awarded a contract worth USD 1.3 billion for LCS maintenance.

REPORT COVERAGE

An Infographic Representation of Ship Repair and Maintenance Services Market

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The report provides detailed information on the market and focuses on aspects such as vessel type, service, dock type, end-user, and key players. Additionally, the research report provides information on ship repair and maintenance services trends, competitive landscape, market competition, product pricing, and market conditions with an emphasis on developments of industry keys. In addition to the factors mentioned above, it includes several factors that have been contributing to the global market sizing in recent years.

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