Frigates are set to be the fastest growing segment in global naval vessels by 2029, according to a new study from GlobalData. The small, agile warships could replace larger vessels such as cruisers and even destroyers as these can provide multi-tasking capabilities, which could offer major advantages for navies worldwide. The value of the frigates sector will grow at a compound annual growth rate of 4.39% to reach $12.67 billion by 2029.
While the term “frigate” has been used since the 17th century and was meant to describe any warship built for speed and maneuverability, in the modern era these vessels have primarily performed as escort. From the 1950s to the 1970s guided missile frigates filled an anti-aircraft warfare role, and since 1975’s ship reclassification, the large American frigates were redesignated as guided missile cruisers or destroyers; while ocean escorts were reclassified as frigates.
GlobalData’s report noted that the U.S. Navy released a force-structure goal in 2016 that called for achieving and maintaining a fleet of 355 ships of certain types and numbers, while that number was reiterated in the 2019 shipbuilding plan and the target is expected to be achieved by 2034. The proposed force structure includes 55 frigates, comprising 35 Littoral Combat Ships (LCSs) and 20 guided-missile frigates (FFG(X)s).
This past June, the U.S. Navy also released its Request for Proposals (RFP) for the Detail Design and Construction (DD&C) contract for up to 10 ships in FFG(X) program and plans to award the contract in 2020. Several companies are competing in this bid. The First FFG(X) will be procured in FY 2020, the next 18 at a rate of two per year in FY 2021-FY 2029, and the 20th in 2030.
Future Force Structure and Its Impact on the U.S. Defense Industry
GlobalData’s report also noted the U.S. Navy has traditionally maintained the largest fleet of naval vessels fitted with high-end naval equipment since the end of the Cold War. However, the U.S. Navy has been getting smaller over the last six decades, recently falling below 280 total ships. According to the Report to Congress on the Annual Long-Range Plan for Construction of Naval Vessels for FY 2020, over this period, 14 defense-related new construction shipyards have closed, three have left the defense industry, and one new shipyard has opened.
“In order to reverse this trend, in December 2016, the U.S. Navy released a force-structure goal that calls for achieving and maintaining a fleet of 355 ships of various categories including Littoral Combat Ships, Gerald R. Ford-class aircraft carriers, Flight-III variants of Arleigh Burke-class destroyers, and Flight II variants of San Antonio-class LPD, Columbia-class SSBN and Virginia Class SSGN,” explained Nurettin Sevi, maritime analyst, at GlobalData.
“This expansion plan is likely to cost around $25 billion a year through 2049 and will ensure the procurement of eight to 13 ships every year,” Sevi told ClearanceJobs. “The U.S. Navy plans to procure 320 new ships and decommission 258 ships between 2020 and 2049 taking the total ship count to 326 ships by the end of 2023. In the long run, the US Navy intends to field a 355 ship Battle Force beyond 2034.”
The Navy is expected to release a new Force Structure Plan in the forthcoming months.
“According to the navy officials, the Force Structure Assessment (FSA), likely to be based on no less than 355 ships, will focus on smaller surface combatants and be reflective of a more distributed architecture that includes a reduced proportion of large surface combatants (i.e., cruisers and destroyers), an increased proportion of small surface combatants (i.e., frigates and LCSs), and a newly created third tier of unmanned surface vehicles (USVs),” added Sevi.
“In addition to that, the procurement programs undertaken by the U.S. Coast Guard including the building and deployment of National Security Cutters, Sentinel-class Fast Response Cutters, Heritage-class Offshore Patrol Cutter and Polar Security Cutter is also contributing towards the growth of naval vessels market in the country,” noted Sevi.
According to the GlobalData’s latest two sector reports, the U.S. market for naval surface vessels and submarines in 2019 is valued at $25.3 billion and is projected to register a CAGR of 2.61%, to reach $34.7 billion in 2029, with a cumulative expenditure of $306.5 billion during 2019-2029.
Smaller is Better
The move away from capital ships isn’t entirely surprising, given that the last battleships were stricken from the U.S. Naval Vessel Register in the early 2000s. The last time battleships even fired their guns in anger was in a supporting role during the Gulf War in 1991.
“Over the last 15 years, we see a trend of navies gravitating towards smaller, modular vessels that can be re-configured for a variety of missions, such as corvettes and offshore patrol vessels (OPVs), instead of larger purpose-built combatants,” said Ridzwan Rahmat, principal naval journalist, Jane’s by IHS Markit.
“Smaller vessels are relatively cheaper to operate and require fewer resources in terms of manpower,” Rahmat told ClearanceJobs. “The miniaturization of technologies like radars, and sonars has also largely enabled this gravitation.”
This is why smaller craft such as frigates are doing a job that was once the domain of capital warships.
“Multi-role combatants are taking on a more important role in navies, most of them are frigate size combatants,” said Scott Clark, global program director for defence at the UK-based offices of Frost & Sullivan. “Most navies will have these size ships,” Clark told ClearanceJobs.
There is also a role for frigates, especially in areas where sustained presence is required, added Rahmat.
“In disputed maritime areas such as the South China Sea, services such as the Indonesian Navy still rely on larger frigates to project their presence for up to 30 days at a time,” explained Rahmat. “These frigates are also able to withstand more punishing sea conditions, where wave heights can go beyond 4 meters. These are conditions where smaller vessels may not necessarily survive.”
But that doesn’t mean that navies will completely embrace smaller warships.
“Aircraft carriers and underwater warfare are increasingly becoming important, particularly in the Pacific theatre,” added Clark. “Not many navies have a cruiser class anymore, though some of the destroyers today have displacements that would typically be classed as cruisers.”
Building the Fleet of Tomorrow
The move to smaller warships could be good news for U.S. contractors.
“In order to build and maintain the U.S. Navy’s future battle force, the U.S. Navy contracts with number of private shipbuilding companies including Huntington Ingalls Industries, General Dynamics, Austal USA, Vigor Industrial, Fincantieri USA, Gulf Island Shipyards LLC, Lockheed Martin and BAE systems,” said Sevi. “In context of unmanned vehicles production, Boeing, Leidos, General Dynamics and Kongsberg (Hydroid) are leading companies.”
According to the US Maritime Administration report, there are currently 124 shipyards in the United States, spread across 26 states, which are classified as active shipbuilders. In addition, there are more than 200 shipyards engaged in ship repairs or capable of building ships but not actively engaged in shipbuilding as of 2015.
“The plan could require hiring tens of thousands of skilled shipyard workers and training of employees to be hired,” said Sevi who noted a 2017 report from Reuters that the two largest U.S. shipbuilders, General Dynamics Corp and Huntington Ingalls Industries Inc, planned to hire 6,000 workers to meet orders for the U.S. Navy’s aggressive force structure plan. “The Navy’s Force Structure Plan is expected to boost the domestic shipbuilding and repairing industry, and enable them to invest in increasing their capacities.”