Historically, the maritime industry has played a pivotal role in the economic development of regions and even countries. However, after the trends of globalization and containerization profit margins diminished and that simultaneously increased the focus on costs. Nowadays, ports have become ‘pawns in the game’ and shipping lines have to provide value-added activities to regain a bit of these lost margins.
However, the general assumption still remains that shippers have to minimize generalized shipping costs to earn a profit. Shipping costs consist of three components: capital costs, voyage costs & operational costs. The latter can be reduced by up to 50% by travelling under ‘flags of convenience’, which simply entails registering your vessel in a country where the rules regarding personnel are the least strict.
Drone ships
A new option is a strong or complete elimination of the required personnel on a ship. IT plays an important role in this development. Rolls-Royce rolled out the first initiative with crewless ships – often called drone ships – in 2014 and according to the Head of Innovation, Oskar Levander, the results are promising: ‘We will see a remote controlled ship in commercial use by the end of the decade (2020).’ He even spoke of a similar disruptive effect in the maritime industry that Uber, Spotify and Airbnb achieved in their respective industries.
Benefits
Cost reduction of crew expenses (up to 40%) is not the only potential benefit of drone ships. By eliminating crew-related infrastructure ships could reduce their fuel consumption by 20%, which ultimately also benefits the environment. Furthermore, additional cargo can be stored on a ship when the crew size shrinks. Drone ships could also potentially enhance safety, because the majority of accidents are the result of human mistakes, mostly due to tiredness of personnel.
Challenges
The potential safety benefit is also closely related to the biggest challenge of drone ships. At the moment, it is very unlikely that autonomous vessels can fully handle issues that can’t be very well predicted. The weather, obstacles and repairs are examples of these variables. Accidents with large container vessels have dramatic implications and a lot of testing is still required before this dream of Rolls-Royce can become reality. Moreover, regulatory issues have to be addressed, because nowadays there are strict rules regarding personnel and crew sizes in international maritime conventions.
Personally, I believe that the objective of Rolls-Royce to deliver a commercially viable drone ship by 2020 is far too optimistic. However, I do see some advantages in the long term. What is your opinion?
Sources
- Slack, B. (1993) ‘Pawns in the Game: Ports in a Global Transportation System’ Growth and Change, Vol. 24, 4, 579-588.
- Stopford, M. (2009) Maritime Economics 3rd New York: Routledge
- The Economist Intelligence Unit (2015) ‘A turning point: The potential role of ICT innovations in ports and logistics, a report for DP World’, November 2015
- Tovey, A. (2016) ‘Crewless ‘drone ships’ will be sailing the seas by 2020’ The Telegraph, 11 April 2016
Hey Jesse, thank you for the post. I am glad that someone decided to touch upon the maritime industry and its potential disruptive technologies. The current uses of drone technology are extremely interesting to me. Lately I got to know that they are also used for internal tank inspections, with the main goal of eliminating safety issues (http://www.thecyberhawk.com/2015/11/cyberhawk-completes-roav-internal-tank-inspection-world-first-maersk-oil/).
In terms of drone ships, I believe it is also useful to mention the human risk factors that would be reduced in case of piracy attacks. Last year, there were 246 reported incidents, 108 of which happened just in Indonesia (http://www.hellenicshippingnews.com/wp-content/uploads/2016/02/2015-Annual-IMB-Piracy-Report-ABRIDGED.pdf). Fortunately these values are declining every year, but nevertheless they should be further tackled by the IMO and other authorities.
Lastly, I want to share the news on a trash-eating water drone which is about to be deployed in the Port of Rotterdam (http://www.businessinsider.com/rotterdam-aquasmartxl-trash-eating-drone-2016-9). It is definitely great to see more and more applications for these unmanned vehicles.
Thanks Jesse for sharing this blog, I think drone ships are equivalent to self-driving cars and this is a disruptive change in the maritime industry. Drones are the future and can help to diminish the cost for shipping companies. You’ve mentioned the safety challenge and I think this will be solved only by a lot of testing. But i think the staffing regulation will also be a big challenge to overcome, because a lot of employees will be fired when the drone ships are implemented. This will be very hard because there is a great influence of unions in the maritime industry and they will obstruct the implementation of drone ships. There is a staff shortage in the maritime industry but the people who are already working on the ships aren’t happy about it. Furthermore, staff is needed to solve problems when the drone ships are broken. Concluding, I think the drone ships are the future but I think the implementation at the end of the decade will be to soon. The challenges according safety, regulations and staff will be to big to overcome in just 3 years.