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Unmanned surface vehicles (USVs) have been deployed over the past decade. Current USV platforms are generally of small size with low payload capacity and short endurance times. To improve effectiveness there is a trend to deploy multiple USVs as a formation fleet. This paper presents a novel computer based algorithm that solves the problem of USV formation path planning. The algorithm is based upon the fast marching (FM) method and has been specifically designed for operation in dynamic environments using the novel constrained FM method. The constrained FM method is able to model the dynamic behaviour of moving ships with efficient computation time. The algorithm has been evaluated using a range of tests applied to a simulated area and has been proved to work effectively in a complex navigation environment.