What Are Ship Design Costs, Naval Architect Rates & Company Service Pricing?

What are ship design costs, naval architect rates, and company service pricing? A custom ship is slightly more expensive than its equivalent in production. The price of the latter already covers the cost of hardware installed, construction materials, labor, design, and some marketing. The purchase price is based on a vessel’s dimension and displacement (weight). An increased length or displacement typically results in heightened design complexity.

However, there are many cases where a smaller design commands a higher price due to its lightweight structure. A lighter ship requires more sophisticated engineering than a heavier variant of the same model. Quality, time, and budget are significant factors that affect the cost of a custom ship design. As a general rule to save money, you should prioritize two and sacrifice the other:

• Quality and budget: to get a high-quality design at a lower budget, the naval architect may treat the job as a side project. They will work on your project when they have time for it.
• Time and budget: if you have a low budget but want to have the design ready as soon as possible, the naval architect will do the project quickly, and the quality suffers.

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The ideal option is to prioritize quality and time. To produce a high-quality design quickly, you need a large budget. The naval architectural professional who handles the job may need to work extra hours and hire more consultants to finish the design earlier than expected. The naval architect will take the time to configure the ship, choose the proper materials, and pick the equipment. 

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Naval architect cost and rates

A naval architect earns an average of $106,159 per year or $54.44 per hour in the United States. The hourly rate for a consultant is higher than a full-time employee and is approximately $90 – $100 for a custom ship design. The naval architectural design company must also collaborate with (or hire) consultants, such as electrical and structural engineers, to ensure the ship meets safety standards and works as intended. Each consultant costs around $50 to $80 per hour.

A naval architect can finish a custom ship design in about 100 hours. If their rate is $100 per hour, the final design cost will be $10,000, a pretty average rate for reasonable quality. At the higher end, a naval architect can easily justify a rate of $120 per hour and design time of 150 hours – for a total cost of $18,000 – or even longer when the design is complex. A naval architect has overhead expenses apart from consultant fees, and a custom design also has no limit. If you have the money, you can request an elegant exterior, luxury interior, and top-range propulsion system.

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Ideally, determine the amount you are willing to spend beforehand and request quotes from several marine engineering designers. Compare what each designer can provide regarding your custom ship’s budget, details, specifications, and timeframe. There can be a considerable gap between the most expensive and the most affordable. Making a decision based on price alone is never a good idea. Instead, choose a naval architect who provides the details you need within a suitable timeframe meeting the budget constraint.

The first payment is for the initial consultancy, followed by a recurrent payout for every deliverable. The last bill arrives after the final design documents are ready. One of the most significant differences between high and low prices is the level and amount of detail drawn in the design document. Quality design should include details for the engineered structure and construction plans. There are also complete ship specifications, including hydrostatic and center of gravity, and a comprehensive list of hardware/equipment to be installed.

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A contractor or builder needs all the information to construct a safe, efficient, and functional ship that floats. Minimum details often lead to manufacturing difficulties and expensive design revisions during construction. The design fee for a state-of-the-art ship, for example, a specialized model used at racing competitions or cruise lines, can cost over a hundred thousand. Most of the budget is used for computer modeling, simulation, and prototype engineering services.

Custom ship design contract clauses

Clients should be aware that a naval architect’s custom ship design contract does not include clauses to guarantee the vessel will work. Adding the clause to mention such a guarantee explicitly is not an option either. The naval architect may instead say something to the effect of “experimental design” in a clause. If any unfortunate incident happens during the use or construction of the ship, the naval architect will not be liable. Generally, the client and the architect agree not to file a lawsuit against each other.

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The main reason for the lack of guarantee is errors & omissions (E&O) insurance coverage is not readily available within the profession. Insurance companies want to avoid insuring a naval architect whose work involves engineering and drawing an original ship design because retrieving a sunken ship for examination is challenging. Insurers will not cover an architect for an irretrievable object or risk insuring an untested ship design. E&O insurance is available only to large design firms, as self-employed architects cannot afford the premiums. The design rates should cover an E&O insurance bill, which costs at least $500,000. 

How it works

A naval architect leads the technical process, and the client oversees the project. If you fund the project, the final design decision should rest in your hands. Throughout the design process, you and the architect collaborate to determine the best possible design within your budget. When the design is finalized, it’s time to seek bids from various contractors or builders. Once the selected builder (shipwright) enters the scene, you draft and sign another contract. While the name of the naval architect might be mentioned, the professional has no direct link in the client-builder agreement.

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However, the architect and builder inevitably confer during the project. The builder needs the drawings and design documents, whereas the architect performs a supervisory role. The cost of overseeing the project is separate from the design fee and will require another contract if it’s outside the original contract. A client can hire a third-party marine surveyor or project manager, but the architect’s role remains the same.

Evolution of ship design

Nearly all ships built before the 2000s were single-point designs, meaning the architects developed the hull shape and picked the engine capacity for one specific purpose. The vessel would be constructed for the condition specified in the design contract. After 2008, versatility and efficiency became significant guidelines in an architect’s approach. Newer ships are intended to be multipurpose vessels with up to nine modes of operation. During the preliminary design phase, the client and architect work together to determine the ship’s operational profile.

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The architect estimates how often the vessel will be used and at what speed. The architect draws the best possible configuration based on the functional profile and estimate. If efficiency and versatility are the focus, the final design will perform efficiently in different voyages under various sea conditions and load capacities. The newly implemented Carbon Intensity Indicator (CII) also requires new ships to meet high-efficiency standards, which will become more restrictive in the coming years.

As a client, consider an alternative low-emission propulsion system to meet CII requirements. Being low-emission only may not be enough in the next decade, so an energy-efficient engine (such as wind-assisted power) can be the next best option. Custom ship design is complex, and having a naval architect on-site, assisted by a project manager, to work with the builder minimizes mistakes and the possibility of expensive maintenance in the long run.

How Cad Crowd can help

Working with experienced naval architects and marine engineers is another great way to design universally usable products. Cad Crowd is ready to connect you with the the professionals you need to bring your idea to life. Contact us today for a free quote.