Pace of technological change has insurance implications: Standard Club

The pace of technological change in the shipping industry had accelerated exponentially in the last two years, Standard Club Deputy Underwriter Callum O’Brien observed In the latest Standard Club Technology Bulletin.

In order to monitor these changes and consider the implications for its membership, The Standard Club decided to establish a Technology Working Group, made up of representatives from across the company, including claims handlers, underwriters, loss prevention experts and IT directors from the Club’s London, Athens and Singapore offices.

A recently published technology bulletin highlighted some of the Club’s main areas of research to date.

Autonomous ships inspired the first area of research for the Technology Working Group. O’Brien said that it was “arguably one of the most divisive topics on the future of shipping”.

The term ‘autonomous ship’ was mainly used to depict a self sailing crewless vessel, but there were various degrees of autonomy. O’Brien said that it was important to distinguish between these levels of autonomy.

Lloyd’s Register defines seven levels of autonomy which Standard Club has grouped as follows:

        Manned ship – traditional crewed vessel with a human operator making decisions

        Remote ship – controlled by a human operator ashore

        Automated ship – running pre programmed software and can only operate within the scope of the algorithm

        Fully autonomous ship – operating system can calculate consequences and risks, and make decisions by itself.

O’Brien said that we were likely to see a steady transition from manned through the intermediate stages to fully autonomous ships while the technology was tested and algorithms were improved through machine learning.

Standard Club thought the most likely initial applications for an autonomous ship would be in simple inland or coastal liner trades – mainly bulk carrier, passenger or RoRo ships.

A good example would be a RoRo ferry operating across a Norwegian fjord. The waters were relatively calm and traffic free and the route was simple.

To use the most publicised example, the Yara Birkeland (an inland electric container ship) was expected start trading remotely in 2020 and fully autonomously by 2022, with the shipbuilding contract just recently signed.

O\Brien said that the timeframe would vary hugely, depending on the type of trade, trading pattern and, crucially, the level of autonomy being referred to.

Autonomous ships could claim to eliminate human error, reduce crewing costs, increase the safety of life, and allow for more efficient use of space in ship design and efficient use of fuel.

A three-year research project by MUNIN (Maritime Unmanned Navigation through Intelligence in Networks) predicted a saving of over $7m over a 25-year period per autonomous vessel in fuel consumption, crew supplies and salaries.

However, despite the operational savings, there would be a large capital expenditure in initially investing in the technology, especially in the early stages of its development.

This would be not just for the ship itself, but also the setting up of onshore operations to monitor fleet movements. There might also be incompatibilities between the current marine infrastructure and an unmanned vessel. Further, the lack of crew would make maintenance of moving parts “incredibly difficult” on long voyages, which meant that breakdowns could result in significant delays.

O’Brien concluded that, in Standard Club’s opinion, there was no viable economic benefit for a completely autonomous ocean-going ship in the immediate future. “Despite a belief in the technology, there will always be value in a human presence on board overseeing operations, the safety of the ship and the safety of the cargo”, he wrote.

However, there would definitely be an application with small inland and coastal craft.

http://www.standard and knowledge/news/2018/09/technology bulletin september 2018.aspx