A sometimes overlooked aspect of the dramatic growth in world trade and offshoring has been the huge demand for cargo ships, which have left the world’s ship builders struggling to keep pace with demand. In response, the largest ship builders, almost all of them in Asia, have made major changes to production processes, including new inland construction facilities, that are helping to add capacity and reduce cycle times.

Large cargo vessels are typically built in “dry docks” –  basically empty bowls next to the sea, which can be filled with water when a ship is complete to allow it to get to the ocean.  But for many ship builders, capacity at their existing dry dock facilities is booked for several years. In addition, limitations in the cranes that can be used and other constraints have meant a lot more of the final assembly work was done in the dry docks themselves than might be ideal.

One potential answer was to build ships further inland – if they could figure out a way to get the huge vessels out to sea. Now, a number of companies, such as the world’s largest ship builder, South Korea’s Hyundai Heavy Industries, have developed approaches to solve that problem.

A Wall Street Journal report said that Hyundai engineers solved this logistics challenge by developing a process where the finished boats pushed by air and then lifted on to river barges and taken to sea. In another case, another Korean company, STX Shipbuilding, developed a land-based pulley track that moved the boats from an inland assembly facility to a river barge.

Building inland also removes some of the dry dock assembly constraints. Just like airplane manufacturers, the ship builders were already moving to an outsourced model, in which major components are built by sub-contractors, and the ship builder performs final assembly. The inland facilities allow larger sections to be built outside the construction facility, reducing the final assembly effort in some cases from 10 weeks to 4 weeks as less welding and other tasks are required.

The Wall Street Journal notes that customers of the cargo ships were concerned that vessels would be damaged by bending too much during the transfer process from the inland facilities to the sea. The original estimates that the bend would be well within existing tolerances and not damage the ships have proven accurate.

Regardless, ship demand for now continues to soar, with most ship builders sold out of current capacity for 3-4 years. As a result, the prices ocean carriers pay for ships have risen by about 50% since 2003.