The shipbuilding landscape is undergoing major shifts as the labour-intensive industry faces a severe labour shortage and shipping switches to vessels that can run on carbon-neutral fuels.

The solution? Shipbuilders should embrace digitalisation and transform themselves into “smart”, or “future”, shipyards. Or at least that is the plan of the world’s largest shipbuilding group Hyundai Heavy Industries Group (HHI Group).

The South Korean giant is to invest more than KRW 320bn ($225m) in transforming its Ulsan-based facility into a smart yard by 2030 and is looking to work with big data provider Palantir Technologies to drive the digital journey.

The rationale behind the investment to become a “future shipyard” — or Future of Shipyard — is to allow the company to stay ahead of rivals both at home and overseas, and to break its dependence on local unionised labour that has been pushing for higher wages.

HHI Group said other manufacturing industries have long converted to smart plants to increase production efficiency. But it has been difficult for shipyards to make the switch due to the level of unstructured work and the high number of skilled employees needed for critical jobs, such as welding.

However, with intelligent technology, data and robotics, the yard is now able to apply these new digital tools and put its plans into action.

Under the multimillion-dollar investment, HHI’s logistics system would be upgraded with a virtual shipyard that would provide visual information on the yard’s status and greenhouse gas emissions; reduce worksite accidents and risk factors and minimise human intervention from the design to delivery.

HHI believes that when the smart yard is in operation it will enjoy a productivity hike of 30%, while vessel construction times will be slashed by 30%.

However, a smart shipyard is not enough for HHI. The yard is also moving towards building autonomous vessels through its self-navigating technology subsidiary Avikus, according to HHI chief operating officer and senior executive vice president SY Park.

In June, Avikus together with SK Shipping completed the autonomous navigation of an LNG carrier, the 180,000-cbm Prism Courage (built 2021). The vessel was installed with Avikus’ autonomous system, HiNas 2.0, which meant the navigation of the ship was controlled by the system but there were seafarers on board to monitor its progress.

The gas carrier departed from the Gulf of Mexico’s southern coast and arrived at the Boryeong LNG terminal in South Korea after 33 days — travelling about 20,000 km (12,400 miles). The Prism Courage’s voyage recorded an improvement in fuel efficiency of about 7%, while GHG emissions were cut by about 5%.

The right team

The achievement has led domestic companies SK Shipping and Sinokor Merchant Marine to order 23 of newbuildings at HHI — container ships and LNG carriers — to be installed with Avikus’ autonomous navigation system.

HHI is also stepping up its research and development division as it believes having the right team in place to come up with concepts and basic vessel designs is critical for shipbuilding.

The company is moving some 5,000 R&D employees and 80 members of its ship sales team to Pangyo in Gyeonggi Province — dubbed South Korea’s Silicon Valley — in a bid to attract fresh talent.

Park said the new office will also encourage young talent to join the industry who do not want to work in the “countryside” where shipyards are located.

HHI Group is working on several types of alternative fuel ships. At September’s Gastec event in Milan, it inked several memorandum of understanding with global institutions and companies in relation to ammonia carriers fuelled by ammonia, LNG-hydrogen tri-fuel engines for liquefied hydrogen carriers, liquified CO2 carriers among others.

Last month, HHI signed an agreement with energy major Shell, HyAxiom, Doosan Fuel Cell and DNV to test the use of a 600-KW high-efficiency solid oxide fuel cell (SOFC) for power on a 174,000-cbm LNG carrier from 2025.

HHI will build, design and install SOFC placements, and integrate the ship system.

Palantir Technologies co-founder and chairman Peter Thiel (left) met with Chung Ki-sun, chief executive at HD Hyundai — a holding company of HHI Group — to finalise their planned joint venture by the end of 2022. Photo: HHI