The United Shipbuilding Corporation (USC) of Russia has developed a comprehensive long-term strategy to transition the country’s civilian shipbuilding industry from a system that is primarily based on individual projects to one that is increasingly reliant on serial production. The plan is being implemented in response to the multiple challenges of replacing an aging commercial fleet and ensuring that domestically constructed vessels are economically viable for operators in Russia.
Mikhail Afonyutin, director of USC’s Department of Sales and Contracting for Civil Shipbuilding, presented the strategy at the “Shipbuilding — Strategy 2026” conference in St. Petersburg on July 23. The conference concentrated on Russia’s shipbuilding strategy through 2036, import substitution of marine equipment, preferential leasing, and measures designed to ensure predictable assignments for domestic shipyards.
Russia Needs Ships, But Orders Are Falling
The most striking number presented by USC concerns the sharp decline in new contracts.
Only 36 civilian vessels were contracted at Russian shipyards in 2025, the lowest figure recorded in a decade. In contrast, Russian yards received contracts for an average of approximately 126 civilian vessels annually between 2016 and 2025, with a total value of approximately 318 billion rubles.
This contraction is occurring despite enormous projected demand.
Russia’s baseline shipbuilding strategy anticipates the construction of over 1,600 civilian vessels and marine equipment by 2036. The requirement is partly driven by the age of the existing fleet. A substantial number of vessels that are presently in operation in Russia were built in the 1970s and 1980s and will gradually necessitate replacement.
Therefore, Afonyutin contended that Russia does not actually experience a shortage of ship demand. The challenge is to transform theoretical demand into projects that are technically mature, commercially viable, and prepared for financing.
In other words, knowing that hundreds of ships will eventually need replacement does not automatically create shipbuilding contracts.
The Challenge of Financing
One of the biggest obstacles is the cost of money.
Construction schedules for ships can extend over several years, rendering them expensive industrial assets. During that period, material prices, interest rates and financing conditions can change considerably, exposing shipowners and shipyards to risks that are difficult to predict when a contract is first signed.
Calculations for vessel leasing were used by USC to clarify the issue. USC estimates that an acceptable financing rate would be approximately 4.5–4.6% annually, assuming a 25-year lease, shipowner operating expenditures of approximately $3,100 per day, and an exchange rate of 80 rubles to the dollar.
The monthly leasing payments may increase by several million rubles if the rate increases to 7.6%. The operator must then either find a method to reduce the vessel’s acquisition price or generate substantially more revenue from it.
That financial equation helps explain why identified fleet requirements have not automatically translated into orders.
Serial Production Could Change the Economics
One solution to this issue, according to USC, is to promote greater standardization.
Rather than primarily designing and building vessels as individual projects, Russian shipyards could increasingly employ standardised platforms, common equipment, and repeatable production processes. This approach has been exemplified by USC’s “Platform No. 1” concept.
Shipyards may potentially allocate engineering and development expenses among multiple vessels through serial construction. Supply chains can be structured to accommodate larger production runs, workers become accustomed to repeatable processes, and equipment manufacturers are afforded increased visibility into future demand.
The same philosophy is reflected in the broader Russian shipbuilding strategy. By 2036, the government plans to increase the percentage of serially produced vessels from approximately 30% to 50% of the domestic shipbuilding output. The target is expected to increase to 80% by 2050.
In addition, Russia seeks to increase the proportion of domestically manufactured vessels in its civilian fleet to 61% by 2036 and 64% by 2050.
That signifies a huge industrial transformation. Shipyards would become more akin to production systems that are designed around families of vessels, rather than facilities that are routinely reorganized for one-time projects.
Import Substitution Remains a Critical Challenge
Nevertheless, the mere standardization of hulls will not resolve all issues.
Afonyutin identified regulatory requirements that are not consistently in alignment with the preparedness of Russian marine equipment manufacturers. Extensive networks of engines, propulsion systems, navigation equipment, automation, electronics, pumps, and other specialized components are essential for modern vessels.
The entire construction program may be postponed if a domestic component that is mandated by regulation is unavailable, insufficiently mature, or substantially more expensive.
The challenge, therefore, is not limited to shipyards. Corresponding serial production is necessary throughout the marine equipment supply chain to facilitate serial shipbuilding.
This makes predictable orders particularly important. The likelihood of equipment manufacturers investing in production capacity is increased when they expect that their products will be required by dozens of similar ships over the course of several years.
Strategic Routes Will Drive Demand
The government has already designated several vessel categories that will be the subject of special attention.
Among these are ships that operate in the North-South transport corridor and the Northern Sea Route, as well as large-capacity tankers, gas carriers, bulk carriers, icebreakers, support vessels, fishery vessels, and passenger ships.
The number of vessels operating on the Northern Sea Route is expected to reach 51 by 2036 and potentially 135 by 2050 under the broader strategy.
Nevertheless, there are various methods for determining Russia’s future ship requirements. The current prospective plan, as stated by Deputy Industry and Trade Minister Albert Karimov in July 2026, identified a demand for approximately 1,300 new civilian vessels through 2035.
The figure in question was characterized as approximate and includes both existing contracts and prospective requirements. In contrast, the broader strategic baseline, which extends through 2036, exceeds 1,600 vessels and marine units.
From Ship Requirements to an Industrial Pipeline
USC’s presentation therefore highlights a distinction that could determine whether Russia’s shipbuilding targets are achievable.
A country may determine that it requires 1,600 vessels; however, shipyards are incapable of building vessels solely based on demand projections. Finance, an approved design, an operator, a supply chain capable of delivering the required equipment, and an economically viable business case are all required for each vessel.
In essence, USC’s strategy is an effort to integrate these components into a predictable industrial pipeline.
Shipyards may receive extended production runs rather than irregular individual contracts if Russia can aggregate demand around standard vessel platforms and provide financing at rates that operators can sustain. This, in turn, could encourage investment in equipment fabrication, automation, and increased production capacity.
The central issue for USC is no longer whether Russia requires new ships. Is it possible to transform theoretical demand into a genuine decade-long shipbuilding program by converting that enormous replacement requirement into financed, standardized, and continuously produced vessels?