Automation and digitization in shipping

Insurers should be cautious when approaching new risks such as autonomous, unmanned vessels, warns Henry Cunnington, Associate, Clyde & Co LLP, IUMI Professional Partner in the June newsletter from the International Uniine of Marine Insurance (IUMI)

Cunnington noted that the shipping industry had recently seen a large number of exciting and futuristic proposals for automated and digital innovations, with the intention of increasing efficiency, reducing costs, saving time and promoting safety at sea. “The increasing numbers of automation and digitisation solutions should lead to a corresponding increase in standardisation and regulation. However, this will take some time to achieve, and insurers should therefore be cautious when approaching these new risks”, Cunnington wrote.

Testing of small unmanned ships is underway in the Norwegian fjords, managed by DNV GL, but there were multiple similar proposals from other manufacturers which are yet to be studied, said Cunnington

Although these new technologies would require skilled specialist technicians to operate them, whether working remotely or as additional crew, it currently remained unclear whether there would be sufficient numbers of trained operators for this as-yet undefined equipment.

“Inevitably, this raises the possibility – if only temporarily – of individual vessels being improperly crewed and maintained”, Cunnington warned, adding that concerns had also been raised that remote operators of, and suppliers of equipment for, autonomous ships may not fall within the limitation regime in the London Convention.

An apparent lack of clarity and standardization in the future of shipping should not cause alarm bells to ring, said Cunnington, noting that this was inevitable in the early stages of innovation. “However, the marine insurance industry should keep an eye on the variety of solutions proposed and ensure that it appreciates the risks involved as the technologies develop. The usability of many solutions has not yet crystallized and, while that should not prevent investment in the future for shipping, stakeholders should nevertheless proceed with both eyes open”, he concluded.