The ship building industry has always been at the forefront of using Computer Aided Design (CAD) tools, for example mathematical surface modelling for the complex geometry of ship hulls. Today an entire ship complete with all internal details can be created in a three-dimensional Virtual Reality Environment (VRE). In this paper the authors describe some of the current issues facing designers regarding Human Factor Engineering (HFE) in ship design and explore the use of the ShipSpaceTM Virtual Reality collaboration toolset and how the tools are being further developed and tested for this purpose.