The ‘now’ of autonomous transport

Shelley Chapelski with the assistance of and extra material from DNV GL

Vancouver (Anders Mikkelsen)

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Speakers

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Janet Grove Managing Partner

Vancouver

Building on her experience and knowledge

from years spent in corporate development

and legal roles within industry, Janet Grove

helps clients in the technology and health

sciences sectors – IT, health sciences,

telecommunications and clean-tech. She is

sought out for her expertise and business

approach to structuring and negotiating both

merger and acquisition transactions and

complex commercial relationships to develop,

commercialize and acquire technology. This

includes assisting with a variety of research

and development, supply and licensing

arrangements and developing and advising

on novel programs and collaborations

involving technology.

Shelley Chapelski Partner

Vancouver

Shelley Chapelski helps lead a team of

experienced shipping lawyers in Vancouver

and Montréal. Her practice encompasses

both transactional and litigation aspects of

maritime law, including maritime contracts,

torts, liability claims, creditor's remedies and

marine insurance matters. She has been

recognized by her clients and colleagues as

one of the leading Maritime lawyers in

Canada. Shelley's clients include commercial

vessel owners and operators, P&I Clubs and

marine insurers, ports and terminals and

maritime service providers.

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Agenda

• Current Autonomous Projects

• Innovation vs Disruption

• Drivers

• Outcomes

• Challenges

• Crystal Ball

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Source: https://www.youtube.com/watch?v=5VBD7hVRhx0

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WORLD’S TRADE CARRIED BY SEA

90%

keeping one half the world fed

&

the other half the world warm

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AUTOMATION – Already exists

“Automated” – uses a specific and predefined method to execute

certain functions without a human controlling it

• dynamic positioning systems

• route planning software

• fuel efficiency analysis

• AIS – automatic identification system

• VDRs – voyage data recorders recording the vessel’s navigational commands and bridge communications

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Terminology

• remote controlled – vessel is navigated from a 24/7 shore based operations centre relying on automated processes

• autonomous – vessel uses automated processes to reach determinations and then implements actions without human intervention

• unmanned – no crew on board the vessel. It is either remote controlled or autonomous, or a combination of both

• MASS - Maritime Autonomous Surface Ship (IMO definition)

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Is the technology available?

YARA BIRKELAND, the first commercial cargo vessel will enter service in 2019 for manned

remote operation. The targets are unmanned remote operation during late 2019 and

autonomous operations in 2020. DNV GL is also supporting three other autonomous or

unmanned pilot projects and development of a shore side control room prototype.

2017-2020

Maersk, while not interested in unmanned ships, is equipping some of its ships with

AI powered situational awareness programming developed by Sea Machines

Robotics. Rolls-Royce are driving a number of projects and currently predict a remote

control unmanned vessel operating in coastal waters by 2025.

2018-2025

A remote control unmanned ocean-going vessel by 2030. 2030

Autonomous ocean-going vessel by 2035. 2035

Sign

ific

ant

Mo

me

ntu

m

Autonomous-related technologies have gathered significant momentum in

recent years and it will continue

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WHY AUTONOMOUS SHIPS?

Innovation comes from within industry.

Disruption comes from outside.

Frank Coles, The Maritime Executive 2017-08-13

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WHY AUTONOMOUS SHIPS?

Innovation is incremental.

Disruption rips up the present model

and starts again from scratch.

Frank Coles, The Maritime Executive 2017-08-13

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Who are the innovators?

• Ship owners and operators who feel besieged by the

regulators to produce improvements affecting the safety of

seafarers and protection of the environment.

• Marine industry service providers who assist ship operators

with means to reduce costs and maintain (achieve?)

profitability. They include Classification Societies, Marine

Engineering firms, Naval Architects, some Flag States

amongst others.

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PORT XL promoting innovation

• Accelerator partly sponsored by the Port of Rotterdam

dedicated to helping start-ups with solutions aimed to the port,

maritime and logistics sectors.

• Port XL takes an equity interest in exchange for $$ investment

and business advice.

• Supported start-ups include automated drone water cleaner,

picking up floating litter in the port, a floating inspection

drone, autonomous buoy and an automated mechanical twist

lock and a variety of freight and port software solutions.

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DNV GL promoting innovation

• Acting as a catalyst to encourage owners to make wise

decisions

• YARA BIRKELAND based on DNV GL pilot project “ReVolt”

• AAWA – Advanced Autonomous Waterborne Applications

Initiative

• AUTOSEA project

• SIMAROS project

• ROMAS project (On Shore Electronic Control Room )

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Who are the disruptors?

• Cargo interests who want to control price, convenience and

speed of delivery

• Cargo interests who want to reduce logistics costs and

minimize warehousing time

• Dreamers

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Why are they disrupting?

“Moving goods around the globe is extraordinarily process

intensive. Mountains of data are shared, numerous contracts are

signed and executed, and monies are transferred between

different participants. The volume and complexity of these

transactions grow exponentially as supply chains become longer

and more diverse – that often leads to data duplication and

reconciliation issues.”

Mike Davies, Chief Underwriting Officer Marine Asia Pacific XL Catlin

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Why are they disrupting?

“…. major manufacturers have the scale to arrange and

negotiate good rates for shipments directly. Everyone else has to

engage the services of a freight forwarder….The customer-

service aspect of freight forwarding … has long resisted

automation; there's no easy way to replicate relationships with

shipping companies and port officials. But that doesn't change

the fact that freight forwarding is opaque and highly inefficient….

Amazon and its ilk will want a technologically advanced, highly

efficient ship, built for purpose and preferably unmanned or

autonomous.”

Adam Minter, Bloomberg View 14-02-2017

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Drivers for innovation

SAFETY OF CREW

SAFETY OF EQUIPMENT

& CARGO

COST EFFICIENCIES

SMALLER CARBON

FOOTPRINT

MANAGING PIRACY?

MEETING GROWTH

PROJECTIONS

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Will early adopters be rewarded?

• Untried and unproven technology

• Expensive prototype construction

• Ports and logistics chains will not be well established to take

advantage of efficiencies

• Uncertain regulatory environment (Class, Flag, ColRegs,

domestic and international legal regimes)

• Untested liability regime

• Will financiers be confident enough to finance the ships?

• How will the insurers respond to the challenge?

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Will early adopters be rewarded? (cont’d)

• Building brand profile (i.e. Yara)

• Establishing reputation for being technologically savvy and

attracting market share as a result

• Influencing the developing standards and applications

• Benefiting from “Big Data” and analytics

• Lessons learned through the effort to implement

autonomy should greatly benefit existing operations.

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Improving safety

In shipping, more than 80%, and up to 96%, of accidents are attributed to human error.

Human error is less of a problem in commercial aviation because of autopilot and other automated systems. "There are all these systems in place to make sure the human error is removed — but on boats, it's not.’”

Phil Bourque, director of BD, Sea Machines Robotics in MNBC MACH 8-11-2017

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Opportunities for human error in practices

training

faulty or unenforced

company procedures

misunderstanding environmental

factors

relying on short cuts

inadequate communication

fatigue/capacity overload

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Opportunities for human error in applications

manufacture of hull, equipment & machinery

installation

setting of tolerances

responding to alarms

maintenance

repair

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Cost efficiencies for operators

A fully autonomous ship might cost 20 percent less to operate than a conventional crewed ship. Without the need for crew quarters, a conventional bridge, lifeboats, and other familiar features, ships can be lighter and more compact and thus less expensive to operate — although they may be more expensive to build.

Oskar Levander, SVP Concepts & Innovation, Rolls Royce

Yara Birkeland has a price tag estimated at $25 million. That's about three times as much as standard container ships of similar size.

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Liability regime & insurance

• Shift from P&I exposures to product liability insurance claims

against for coders, system provider & installers, software

designers.

• Will liability under applicable product liability laws be more

onerous than under maritime laws governing manned ships?

• Will Class and other inspectors/verifiers face more liability as

they take a more active role in developing and enforcing

standards?

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Will seaborne trade continue to grow?

Iron ore is predicted to

peak in 2025 and coal even sooner (almost 20%

of seaborne tonnage)

Regionalization of

economic activities driven by robotics &

3D printer

technologies.

Oil will peak as

reliance on renewable energy

grows

Seaborne trade volumes have grown on average by 3% per year from 1980 to

2017 reaching 10.6 billion tons. Will that continue for the next 40 years?

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Consequences?

INCREASE IN LIABILITY

EXPOSURES UNTIL TECH IS PROVEN

XX

SAFETY OF CREW, BUT ONLY ONCE

UNMANNED X

SHIFT OF LIABILITIES

FROM SHIP TO TECH

PROVIDERS XX

INCREASED CAPITAL

COSTS MAY EXCEED

SAVINGS XX

SMALLER CARBON

FOOTPRINT (if alternate fuel

used)

IS GROWTH PROJECTION ACCURATE??

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Challenges

Much of the focus has been

on the collision avoidance

abilities of an unmanned or

autonomous vessel.

There are well documented

concerns on an unmanned

vessel’s ability to berth, the

role of the pilot and the

security of shore control

stations (both physical and

cyber).

These are not

insurmountable and

technological solutions are

inevitable.

Is the Technology available?

Autonomous decision making likely will be a combination

of rule-based actions and artificial intelligence (AI). AI

systems are not presently capable of the complex

decision making required to control all functions and

operations necessary for the safe completion of a voyage.

How will human ethics be imbedded to chose between

two undesirous results?

Decision Making Ability

The data exchange between ship and shore for remote

controlled and autonomous vessels will be massive. The

current bandwidth capabilities are not sufficient to cope

with large scale operations. Providers are working to

meet these expected demands.

Reliable Satellite Data Links

Very low maintenance equipment and systems will be

needed for unmanned vessels and this precludes diesel

engines. Battery technology may be the future but it is not

yet sufficient to meet the power demands of a commercial

ocean-going cargo vessel.

Power Generation and

Propulsion

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Challenges (cont’d)

• Data has no value until the

ship operator determines

how to capture and use it.

Analysis of data is necessary

to support optimisation tools

to increase revenue or

control costs. It is needed to

establish and verify predictive

maintenance, design life and

replacement programs.

• Products are being offeried to

improve the ability to log data

and get it from and to ships.

More innovation will be

developed to collect and use

Big Data (even if the data is

only from one ship).

Is Big Data available? Investment by ship owners must be matched by shore

side infrastructure to facilitate powering battery powered

ships or other green fuel technology. Berths will have to

invest in mooring techniques which do not require

manually handled lines between ship and shore. Shore

side cranes will have to be capable of removing cargo

from unmanned ships.

Shore Side Investment

Who will own or establish the technology platforms? Will

the US, Russia and China cooperate to establish

standardized technology for international use? Will

countries go on their own or agree to cooperate?

Ownership of Software

To efficiently and effectively operate a fleet of vessels,

they must be true sister ships in more than just hull

design. They should operate virtually identically. Their

equipment and machinery need be virtually the same so

that maintenance and repair work can be quickly and

effectively conducted while at sea or in port. Shore side

support follow.

Sister ships at Sea and Shore

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Challenges (cont’d)

IMO is tackling the topic of

unmanned ships in the

STCW, SOLAS, COLREGS,

& MARPOL, but the process

will take time.

In the meantime, Flag States

can provide exemptions

within national waters and

make bi-lateral agreements

with other states.

Are the Regulations available?

The aviation industry has recorded that as planes turn

into autonomous machines, their captains suffer from

“Skill Fade” . While the first generation of shore side

masters will come from ships, the subsequent ones may

not have any real sea time in order to assist them in

understanding the dynamic weather, ocean and location

conditions being encountered by the ship.

Skill Fade

The scope and degree of regulatory changes required to

support autonomous shipping are immense but not

insurmountable. The biggest challenge will come from

inconsistent standards between nations as the

technology advances.

Regulatory changes

Crew will no longer be on vessels painting the hull and

checking and oiling the machinery. The equipment and

machinery on board must be of extremely high quality

which can go a long time between attendance, especially

the rotating machinery. Maintenance and replacement

must be very predictive in nature to minimize disruptive

events..

Maintenance of Machinery

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DNV GL Objective of Rule Development

Autonomous ships must be

as safe or safer than

manned, traditional ships.

Rules are needed for sensor

capabilities, decision

algorithms, shore-shore

communication, machinery

design & maintenance,

onshore control centres,

cyber security, design and

verification of the

functionality.

What Rules are Needed? In the instance of a failure, what are the redundancies?

What are the options to stop and stay in position, move to

a safe location, drop anchor, drift, wait for a support

vessel. encountered by the ship or regain remote control?

Fail to Safe condition

Manufacturers and other entities shall follow a robust

design and validation process based on a systems-

engineering approach with the goal of designing the

vessel free of reasonable safety risks.

Verification

Defining, testing and validating a fall back minimal risk

condition in cases of autonomy system failure or failure in

a human operator’s response when transitioning from

automated to manual control.

Minimal Risk Condition

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HYPER LOOPS – Yet another Disruptor?

• low-pressure system that runs inside a tube, with a capsule

that hovers inside this tube, using magnetic force to retain its

position.

• little to no resistance.

• supposed to be very energy efficient.

• more likely to be used to cargo as it is less sensitive to

vibrations and safety issues

• inland transportation purposes (for now).

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Global context – 20 years out

?? GREENING OF THE INDUSTRY

CONTRACTION OF IRON ORE AND

COAL CARGOES

3 D PRINTING REDUCING TRADE OF

GOODS

“VERTICAL INTEGRATION

" IN SUPPLY CHAIN

CYBER CONNECTIVITY & SECURITY

CRYPTO CURRENCIES

& BLOCKCHAIN

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Possible Order of Implementation

Liner routes:

Containers

& Bulk

Bulk Oil & Gas?

Project Cargo and

Remote

Routes or

Ports

Cruise Ships, Pax

Vessels on

irregular

routes

Short Sea (domestic

or bilateral)

both Cargo

& Pax

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Questions

& answers

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Contact Shelley Chapelski

Partner, Norton Rose Fulbright

shelley.chapelski@nortonrosefulbright.com

Janet Grove

Managing Partner, Vancouver, Norton Rose Fulbright

janet.grove@nortonrosefulbright.com

With many thanks to the assistance of DNV GL Vancouver (Anders Mikkelsen)