Construction Delays in Shipbuilding: Causes, Consequences & Smart Solutions

My name is Davide Ramponi, I am 20 years old and currently training as a shipping agent in Hamburg. In my blog, I take you with me on my journey into the exciting world of shipping. I share my knowledge, my experiences, and my progress on the way to becoming an expert in the field of Sale and Purchase – the trade with ships.

One of the most exciting moments for any shipowner is seeing a newbuild vessel take shape in the shipyard. A project that has taken months—or even years—to design, finance and plan finally begins to materialise. But as anyone in the industry knows, this phase often comes with its own set of headaches.

Delays during the construction phase are among the most common—and costly—problems in shipbuilding. They can cause ripple effects that impact cash flow, charter commitments, operational timelines and even market positioning.

In this post, I want to explore the main causes of delays, explain how brokers and shipowners can actively prevent or mitigate them, and discuss how contractual penalties are used to keep projects on track. If you’re involved in the planning or execution of a newbuild project, this is a topic you can’t afford to ignore.

Why Do Construction Delays Happen?

Shipbuilding is a complex, collaborative process involving many moving parts—both literally and figuratively. It requires coordination between engineers, suppliers, classification societies, subcontractors, and technical inspectors. With so many players involved, it’s no surprise that delays are common. But what exactly causes them?

1. Labour Shortages and Resource Constraints

One of the most persistent issues in recent years has been the lack of skilled labour in many shipbuilding regions.

🔹 What’s happening?

• Global demand for ships has risen sharply, especially in sectors like LNG and container shipping.

• Meanwhile, many shipyards are struggling to hire and retain qualified workers, particularly welders, pipefitters, and electricians.

• Labour disruptions—such as strikes or high turnover—can bring progress to a halt.

🔹 Impact:

• Delays in key construction milestones like keel laying, block assembly, or outfitting.

• Inconsistent work quality leading to rework, which further delays delivery.

2. Supply Chain Disruptions

If labour issues are the heart of the problem, supply chain delays are the backbone.

🔹 Root causes:

• Shortages of key components such as engines, gearboxes, navigation systems, or steel.

• Transport delays due to port congestion, customs issues, or geopolitical instability.

• Single-source suppliers failing to deliver on time.

🔹 Real-world example:

After COVID-19, many shipyards reported long lead times for main engines—some extending beyond 12 months. Even if the hull is ready, a missing engine can halt everything.

🔹 Knock-on effect:

Delays in one component often cascade through the entire build schedule, pushing back commissioning, sea trials, and handover.

3. Late Design Changes and Technical Modifications

One of the **most underestimated causes of delay** comes from within: the shipowner’s own changing requirements.

🔹 Why this happens:

• Charterers ask for last-minute spec changes.

• New regulations (e.g., environmental standards) require technical redesigns.

• Owners decide to future-proof the vessel with additional tech—after the contract is signed.

🔹 The challenge:

Even small changes can require redesign, re-approval, and re-engineering, which adds weeks—or even months—to the timeline.

How Brokers and Shipowners Can Counteract Delays

Delays are not always avoidable, but their impact can be reduced with the right strategies. Here’s how shipowners—and brokers—can take proactive steps to keep projects on schedule.

1. Strong Project Planning and Realistic Timelines

Don’t rush into ambitious deadlines just to win a charter or show off on a press release.

✅ Best practices:

• Include buffer time in the delivery schedule.

• Understand the yard’s capacity and other ongoing projects.

• Clarify resource availability before contract signing.

💡 Tip: A broker with inside knowledge of the shipyard’s workload can provide valuable insights here.

2. Lock In Suppliers Early and Diversify

If a delay is likely, it’s better to know now than six months down the line.

✅ What to do:

• Secure slots for major components (engines, propulsion systems, electronics) early in the project.

• Where possible, use multiple suppliers or work with shipyards that have diversified their procurement channels.

💡 Tip: Some brokers and technical consultants offer supplier audit services—a wise investment for high-value newbuilds.

3. Clear and Finalised Specifications from Day One

Late design changes are costly—not only in money but in time.

✅ Solution:

• Work with an experienced naval architect and technical team to finalise the vessel design before signing the SBC (Shipbuilding Contract).

• Ensure that all charterer requirements and IMO compliance targets are included from the start.

• Avoid vague or open-ended specifications that leave room for interpretation.

💡 Tip: Some contracts allow for “option clauses,” giving shipowners flexibility without forcing a redesign if specs change.

4. Close Monitoring During the Build Process

This is where brokers, project managers, and inspectors really add value.

✅ Monitoring tools:

• Progress reports with photos and milestone sign-offs.

• On-site inspections at key stages (e.g., steel cutting, launching, sea trials).

• Third-party verification of compliance and quality standards.

💡 Tip: A hands-on broker can act as a communication bridge between shipyard and owner, preventing misunderstandings that cause delays.

Contractual Penalties: A Double-Edged Sword

To keep shipyards accountable, most shipbuilding contracts include penalty clauses for late delivery. These are typically structured as liquidated damages, paid per day or week of delay.

How They Work

• The penalty rate is usually pre-agreed, often capped at 5–10% of the contract value.

• Some contracts include grace periods before penalties apply.

• Penalties can also apply to performance shortfalls (e.g., speed or fuel consumption).

Pros:

• Encourage shipyards to stick to the timeline.

• Provide financial compensation for the shipowner’s losses.

Cons:

• In high-pressure situations, shipyards may rush the job, resulting in quality issues.

• Legal disputes can arise if delay causes are contested (e.g., force majeure).

💡 Tip: Penalties are only effective if the contract clearly defines what counts as a delay, how damages are calculated, and what exceptions apply.

Conclusion: Stay Ahead of Delays, Don’t React to Them

Delays in shipbuilding aren’t rare—but they don’t have to derail your entire project. With proper planning, firm contracts, and active communication, you can keep your timeline under control—even when the unexpected happens.

🔹 Labour shortages, supply chain issues, and design changes are the most common delay triggers.

🔹 Brokers and shipowners can proactively counteract delays through realistic timelines, supplier coordination, and early spec finalisation.

🔹 Contractual penalties are useful—but only if they’re clear, fair, and legally sound.

Have you experienced construction delays in your own projects? How did you manage or avoid them? Share your stories in the comments—I look forward to the exchange! ⚓🛠️