Lesson 2; Demographic and Emerging Technology in the Maritime Industry

Course outcome:
This course, Trends, Issues, and Breakthrough in the Maritime Industry
(ELECTIVE 1), will thoroughly familiarize students with the mandatory
minimum requirements for knowledge, understanding, and proficiency in
Table A-II/1 and III/1 of the STCW 2010 Code for the function for both
Officers in Navigational Watch and Marine Engineering on ships 500 gross
tons or more and propelled by main propulsion engine on ships 500 gross
tons or more and propelled by main propulsion engine on ships 500 gross
tons or more and propelled by the main pro.
Learning outcome:
 At the end of the lesson the student should be able to :
1.Explain that the shipping industry adapts to low cyclical growth;
Introduction:
As a result, globalization tendencies are lauded or criticized as beneficial or
dangerous to global stability, the environment, peace, and long-term
prosperity. While it is outside the scope of this chapter to judge these
claims, it does look at maritime transportation as a globalization enabler. We
demonstrate how significant transportation (in general) and shipping (in
particular) have been and continue to be.
Learning outcome 2 Topics
Topic 1: Demographic and emerging technology in the maritime shipping
industry
 

  Learning objectives:
Marine vessels are a major source of air pollutants that have been linked to negative
environmental, health, and climate change effects.
 
Topic 1: Demographics and Emerging Technology in the Maritime Shipping industry
How do the goods of the world travel? Despite the proliferation of
technological advancements, an overwhelming 90 percent of everything we
consume still comes and goes on a ship, by sea. The maritime shipping
industry may be one of the oldest in the world, but the globalized economy
we enjoy would not exist without it.
 Here are some interesting facts and statistics about the worldwide maritime
industry:
 U.S. Economy - In 2014, U.S. coastal ports accounted for 26 percent of the
nation's $17.4 trillion economies.
Cargo  - Three and a half billion tons of cargo pass through Europe's 1,200 seaports each year.

Container Ships - The biggest container ships can hold 745 million

bananas in 15,000 containers. That's one for every European and North
American.
 East Coast Ports - The leading U.S. ports on the East Coast are located in
New York and New Jersey, accounting for 38 percent of North Atlantic
trade.  Exports - 60 percent of the nation's export-bound grain is
transported on inland waterways. Farmers depend on an efficient water
transport system to compete and win against foreign producers.
 Oceans and Lakes - Fourteen percent of U.S. counties that are adjacent to
the coast produce 45 percent of the nation's GDP, with close to three million
jobs (1 in 50) directly dependent on the resources of the oceans and Great
Lakes.
 West Coast Ports - The Port of Oakland occupies 19 miles of waterfront on
the eastern shore of the San Francisco Bay, with 665 acres devoted to
maritime activities.
 Maritime Workers - The average salary for a maritime worker can range
from $45,000 to $65,000     annually.
Worldwide - As you read this, there are at least 20 million containers
crossing the world.
 The shipping industry adapts to low cyclical growth
 A glance at global maritime trade: Shipping industry adapts to low cyclical
growth
Source: The Bulletin Panama
The impact of slow current economic growth in world trade has led the
maritime industry to adjust in response to economic, political, demographic,
and technological trends. This is revealed in a study by IHS entitled, “Trade
and the Maritime Industry, Global Trends 2016”.
 “Understanding these trends is the key to improving the performance of
capital investment and operational efficiency, and provides the foundation
for successful business strategies in the long term,” says the study, which
focuses on five elements:
 Prices of raw materials, mainly oil, coal, and iron ore;
The impact of the slowdown in China;
The lifting of sanctions on Iran;
The availability of data to design policies; and
The long-term impact of demographic
Since 2015, the maritime industry had begun to adjust to the slow growth
tending, at least temporarily, to use container ships of 8,000 or less TEUs
(twenty-foot container equivalents) reversing the trend towards mega-ships
of 18,000 TEUs and more. In an analysis published in November 2015,
Drewry Maritime Research (DMR) noted in this connection that “Large ships
can be the center of attention, but their application is relatively limited
because of port restrictions and the (low) demand indicate that they are only
useful on a few routes”. “As physical constraints (for example, the expansion
of the Panama Canal) the average vessel size on major routes are overcome
and will continue to increase, some faster than others, but it is a gradual
process and in the meantime ships of less than 8,000 TEUs will continue to
be required on routes with lower volume, intra-regional and domestic routes
that cannot accommodate large ships,” added DMR.
 

As in the recent study by IHS, this provides for lower prices of raw materials
for the next 5 to 10 years, a factor that will depress freight rates,
particularly of bulk cargo ships. The exception is the category of tankers,
whose rates will remain at a good level at least in the short term. The
slowdown in China has had serious implications for the global

maritime economy because of the impact it has had on supplier

countries for the decline in demand for raw materials. Consequently,
imports from the Asian giant will remain stable and at best, record a
slight increase.
Conversely, the low and unstable global economy has had the effect of
reducing exports from China.

On the positive side, the lifting of sanctions on Iran will have a positive
effect on maritime trade, as it will for the industry, from increased
access to databanks and technological advances. This element will
allow shippers greater visibility of market trends and prices, helping to
minimize the adverse impacts of economic cycles that have traditionally
plagued the industry.

Finally, IHS evaluated the effect of demographic trends in the next decade.
According to the consultant, the middle class in the emerging economies of
Asia, Africa, and Latin America has been growing, which will impact the
demand for imported products and manufactured goods. The classic case is
India, a country with high demand, whose economy will grow 7.9% in 2017,
compared with 7.3% in 2014.
 

In the demographic aspect, the maritime industry has a problem of a labor

force with a high rate of aging. The same applies to the crews of ships
because young people have lost interest in seafaring due to the perception
that technology is advancing at a slow pace in the maritime industry. This
poses a challenge to the shipyards to incorporate high-tech ships of the
future, in order to attract more young people to inject new blood into the
maritime industry.
 
Meanwhile, the picture is not clear for the time being for the shipping
industry. Freight rates will increase modestly over the next 18 months, while
the rating agency Moody predicted in June that the combined profits of the
industry for 2016 will decrease from 7% to 10%. The most affected
segments are the transport of bulk cargo and containers.
 

The shipping cycle in the international container market: which will be the
actual shipping cycle in the future of shipping, the traditional or a new
The economic cycle and the shipping cycle (the microeconomic side of both
businesses) play a crucial role in the future of ports and shipping, as it has
been in the past. Regarding the latter, the presence of the shipping (or
maritime) cycle along with the history of the shipping business for over 275
years.
 

For that, it is important to begin by discussing the shipping cycle. The latter
is understood as the interaction between supply and demand in the maritime
transport sector. Supply will lag behind when facing extremely dynamic
exogenous demand. In this situation, the industry needs to adapt the
shipping fleets (by 

expanding or 
contracting) to changes in demand. When there is low cumulative demand,
shipbuilding slows, and the number of vessels under detention (idle) or
marked for scrap rises. 
When cumulative demand increases —which can be caused by many 
factors, related mainly to changes in the world economy— supply is unable
to quickly match it, freight rates go up and shipbuilding resumes, ultimately
causing an oversupply which then pushes rates back down.
In other words, the shipping cycle is a combination of price incentives and
the typical inelasticity of supply within this market. The cycle operates due
to a lack of synchronization in ship production (changes in supply), in a
context of very dynamic and exogenous demand (that responds to changes
in production and trade). When prices (freight rates) are low, there is less
construction in the
maritime sector and increasing numbers of ships are scrapped. As demand
increases and more transport services are needed, the supply (in terms of
the number of ships and/or availability of effective transport capacity)
cannot be adjusted rapidly, freight rates rise and construction begins again,
which subsequently produces excess supply and a lowering of freight rates.
 

Fluctuations in the shipping cycle are closely linked to those of the business
cycle, where decreases or shrinkage in aggregate demand will mean lower
demand for transport services,
forcing shipping companies to build fewer ships and scrap some of those that
are not in use. Conversely, when aggregate demand increases during a cycle
of economic expansion, it cannot be met immediately because the shipping
companies are already managing existing demand. This phenomenon is
reflected in the rise of freight prices, which in turn restarts the shipbuilding
process in order to meet demand.

An economy in crisis causes the production, consumption, and,

consequently, the transport needs, to fall. Taking this time into account as
the beginning of the shipping cycle, freight rates, industry revenues, and
profits fall (step 1) and, consequently, there are no incentives to add
tonnage to the fleet (step 2). In turn, the demand for ships falls, more ships
are scrapped or idled. Freight rates remain low (step 3).
 

Steps 1 to 3 are the lower phase of the maritime cycle. At the moment that
economy starts to rise (step 4), the fleet grows very slowly, but demand
grows more rapidly (because of the inelasticity). Steps 5 to 10 are the
higher phase of the cycle: demand outstrips supply; tonnage is scarce;
freight rates rise while demand continues to exceed supply; orders for new
shipbuilding increase rapidly. In some time, excess in optimism appears the
orders may become too much. When transport demand begins to stabilize,
supply exceeds demand, and signs of excess supply appear (excess
tonnage). The next crisis will start the cycle again...
The side effects arising from processes linked to crises and peaks in the
business cycle are tightly connected to the decisions made by economic
agents, particularly in response to crisis periods. Stakeholders in the
maritime sector are affected by economic recessions, since as aggregate
demand weakens, so does the demand for goods transport, resulting in
consequences for companies’ profits. Along with this, the decisions made in
the optimistic phase of the cycle can cause imbalances in companies’
results.  In fact, in the economic recovery of 2010, shipping companies’
operating margins declined throughout 2011 before rising again, with small
fluctuations from one quarter to the next, although overall results have
remained poor. Companies’ fluctuating financial performance correlates
exactly to changes in the global trade of goods and the wider economy, and
specifically to the sustained overcapacity in the industry (a topic that is
currently being much
commented upon). This situation is clearly propelled by low freight rates. In
summary, during the 

last 34 quarters, the industry has had 21 negative or almost zero financial
results (average of positive operating margin: 4.8%, average of  

negative ones: -6.9%). The year 2010 was an exceptional year including
positive financial results and a big demand recovery. But since 2011 demand
declined yearly (with a slight rise in 2014), and freight rates sustained a
declining trend until the end of 2016. At the same time, all financial results
were volatile: 2010 was a critical cornerstone for the shipping cycle.
 

Following the traditional shipping cycle approach, after the crisis started in
mid- 2008, jointly with a drop in production, consumption, and transport
needs,
freight rates, industry revenues, and profits fall; in those circumstances,
shipbuilding should have been stopped. Then... what kind of incentives
propelled the decision to add tonnage to the fleet? In fact, initially, the
demand for shipbuilding fell and an increasing number of ships was scrapped
or left idle. Freight rates remained low, confirming that the shipping cycle
was in its lower phase. However, shipbuilding never stopped.
The above-mentioned situation constitutes a big failure on the traditional
shipping cycle. The behavior changes around shipbuilding, i.e. an increasing
number of shipbuilding orders submitted to shipyards when profits, demand,
and freight rates were falling, is enough to suspect that a core change took
place in the mechanism that kept the shipping cycle in motion for such a
long time. Under the ‘shipping cycle’ traditional approach, trade and
transport needs fall when a crisis occurs, and supply exceeds demand.
Consequently, freight rates, revenues, and financial margins drop, and
shipbuilding is halted. This is considered a natural reaction in front of low
revenues because there are no incentives to add tonnage to commercial
fleets. However, after the 2010 “spring”, bigger liner shipping companies
performed for the first time a “trilogy”: an increasing number of shipbuilding
orders for new vessels, bigger ships, and concentrated alliances. The trilogy
is a clear detour to the traditional shipping cycle approach.
 
Big ship chronicles: How overcapacity disrupted the industry?
Ocean cargo carriers are anxious for change. A series of market trends over the past decade has
led to a historic trough for many companies. Since 2015, the world’s most prominent carriers
have suffered from depressed freight rates, industry-wide overcapacity, and two years of
declining profits. It’s not because of a lack of demand, however. Quite the contrary, the need
for ocean transport is growing alongside world trade, sluggish, but still on the upswing.
Globalization is still in full swing, and a rising middle class is boosting demand for the transport
of a wider diversity of products, such as perishables.
 

The shipping industry’s current struggles, then, are self-imposed. It was due to a race to the
top; a desire to undercut competition; a prisoners’ dilemma that ended, even, in bankruptcy for
one major carrier. While low rates were beneficial for shippers, the instability and drop-in
service that came with them were not. Fortunately, in 2016, the industry began to self-correct.
Seven major
 mergers or acquisitions, one bankruptcy, and hundreds of scrapped ships later, the industry
forged a new world of shipping in 2017.
 
The recruitment and retention of women in the maritime industry
 

"Empowering Women in the Maritime Community" has been selected as the World Maritime
Day theme for 2019. This will provide an opportunity to raise awareness of the importance of
gender equality, in line with the United Nations' Sustainable Development Goals (SDGs), and to
highlight the important contribution of women all over the
world to the maritime sector.

The Council of the International Maritime Organization (IMO), meeting for its 120th session at
IMO Headquarters in London, endorsed the theme, following a proposal by IMO Secretary-
General Kitack Lim. “IMO has a strong commitment to helping achieve the Sustainable
Development Goals (SDGs) and continues to support the participation of women in both shore-
based and seagoing posts, in line with the goals outlined under SDG 5: 'Achieve gender equality
and empower all women and girls,” Mr. Lim said.

“IMO has a strong commitment to helping achieve the Sustainable Development Goals (SDGs)
and continues to support the participation of women in both shore-based and seagoing posts,
in line with the goals outlined under SDG 5: 'Achieve gender equality and empower all women
and girls,” Mr. Lim said.
 

“This theme will give IMO the opportunity to work with various maritime stakeholders towards
achieving the SDGs, particularly SDG 5, to foster an environment in which women are identified
and selected for career development opportunities in maritime administrations, ports, and
maritime training institutes and to encourage more conversation for gender equality in the
maritime space,” Mr. Lim
said.
While shipping has historically been a male-dominated industry, IMO has been making a
 concerted effort to help the industry move forward and help women achieve a representation
 
 that is in keeping with twenty-first-century expectations. This work has been focused on IMO's
gender and capacity-building program, which is now in its thirtieth year.
Back in 1988, few maritime training institutes opened their doors to female students. IMO was
in the vanguard of United Nations specialized agencies that
forged a global program known as the Integration of Women in the Maritime Sector. Carried
out over several phases, it put in place an institutional framework to incorporate a gender
dimension into IMO's policies and procedures, with resolutions adopted to ensure access to
maritime training and employment opportunities for women in the maritime sector.
 
“Today IMO's newly renamed, Women in Maritime program is going strong. Empowering
women fuels thriving economies across the world spurs growth and development, and benefits
all of us working in the global maritime community as we strive towards safe, secure, clean, and
sustainable shipping,” Mr. Lim said.
 

Female graduates of IMO’s global training institutes, the World Maritime

University (WMU), and the International Maritime Law Institute (IMLI) are
today working as maritime administrators and decision-makers. They have a
positive impact as role models in encouraging new female recruits. IMO also
supports the empowerment of women through gender-specific fellowships;
by facilitating access to high-level technical training for women in the
maritime sector in developing countries.
 
IMO has supported the creation of seven regional associations for women in
the maritime sector across Africa, Asia, the Caribbean, Latin America, the
Middle East, and the Pacific Islands. Access to these regional networks has
provided members with a platform to discuss gender issues; a golden thread
of worldwide maritime communication and improved implementation of IMO
instruments.
The selection of the theme, "Empowering Women in the Maritime
Community" will ensure a renewed focus on the IMO women in the maritime
program, and on achieving the goals of SDG 5, throughout 2019.
 
European Transport Workers Federation (ETF) and the European Community
Shipowners’ Associations (ECSA) have discussed possible solutions to increase women’s
participation in the shipping industry in Europe. Currently, only 2% of the seafaring
workforce available for the EU fleet consists of women, whilst gender
equality is being put at the heart of the EU’s fundamental values for
sustainable and inclusive growth. Discussions focused on maritime training
and career development for women, as well as the recruitment and retention
of women in the shipping industry.
Alongside representatives of both the ETF and the ECSA, participants came
from a wide range of stakeholders such as the European Commission, the
European Economic, and Social Council, the UK Merchant Navy Training
Board, national administrations from France and the UK, researchers from
the Paris Descartes University, and the Community of European Railway and
Infrastructure Companies (CER), who were there to share good practices
from other sectors.
 

“If we want strong, prosperous and socially sustainable maritime clusters in

Europe, gender diversity should be a leading principle as a means to attract
and retain new talent in the shipping industry,” Said Martin Dorsman,
Secretary-General of the ECSA, said. ECSA said that the meeting has proven
that social partners “are willing to work together on this issue and have
taken a first step towards finding concrete proposals for joint action.”
 Maritime world in 2030 will be almost unrecognizable owing to the rise of
emerging countries, new consumer classes, and resource demand
 Many global problems are impacting the shipping industry, from political
conflict to disruptive technology. But some shipping companies are thriving.
We talk to Lars Juul Jorgensen, CEO, and CCO of Dubai Navigation Corp.
Global Marine Trends, predicting what the shipping world would look like in
2030, said: “The marine world in 2030 will be almost unrecognizable owing
to the rise of emerging countries, new consumer classes, and resource
demand.”
 

The report argued that there would be greater competition 

from the developing world and challenges arising from the environment.
Different scenarios might shape the world, from increased growth and
cooperation to protectionism and shrinkage. Meanwhile, disruptive events
and technology look set to shake up the industry. What does the industry
look like from the inside? We spoke to Lars
Juul Jorgensen, CEO, and CCO of Dubai Navigation Corp, a fast-growing
shipping company founded in the Marshall Islands in 2017, about his
company, history, and the new regulatory environment. Located in Dubai,
the company bought a total of six ships within the first nine months of
operation, growing the fleet to eight within twenty-four months.
  IMO regulatory Environment
 New IMO 2020 regulations will come into effect on the 1st of January 2020.
They will be a game-changer for many shipping companies for both new and
old ships. In short, ships will have to change from using high-sulfur fuels
(3.5%) to low-sulfur fuels (0.5%), unless a ‘scrubber’ is fitted.
It is a change of direction that I welcome, and it will guide shipping onto a
path of improved environmental friendliness. This ethos can be applied
without significant adverse economic effects for producers or consumers.
 

However, the International Maritime Organization (IMO) has put these new
regulations in place but has in practical terms failed the Shipping industry
when applying these new regulations. The framework for the new fuel
regulations has not included the oil-majors/fuel producers.
 
The consequence is that the oil-majors have still not provided samples of
stable fuels that can be tested by engine makers, ship-owners, and other
related companies to prepare the ships and engines for using the new fuels
and ensure the safe running of all vessels. Ship-owners have therefore been
forced to invest and prepare for a wide range of fuels which including change
of lube-oils, upgrading of filters, and other engine parts. In other words, IMO
has changed this issue from being an Industry issue to a Ship-owner’s
problem. Owners have a very low level of certainty of what the future holds
in this respect.
 

The Dubai Navigation Corporation (DNC) is of the view that environmental

improvements benefit everyone. Which started their preparations in the first
quarter of 2019, allowing them well over six months to prepare
 

 their ships for the new regulations and to ensure the safe running of their
ships beyond 1st January 2020. Going forward, they wish to stand out as
being a prudently prepared ship-owner for this change.

The technical and crew-management of Shipping company DNC’s fleet of

ships is with two different third-party ship- management companies, which
embrace their core values and approach to running and maintaining their
ships – including the environment. This meaningful tri-partite dialogue
between their company, their ship-managers (who manage more than 300
vessels combined), and their suppliers is of strategic importance.
 

They have an efficient and economical model that works much better
compared to having a full in-house ship- management (in their case of eight
ships) which would not have sufficient or fast enough access to information
and experiences to make well-informed decisions on new issues, such as
IMO 2020. This structure allows them to be flexible, nimble, and economical.
It will enable them to increase and reduce their fleet size as the markets
move up and down without any time or economic restraints. This model
equally also enabled Shipping company DNC to ‘hit the ground running when
they started the company. But it’s also a vital company attribute going
forward.
 

The Dubai Navigation Corp’s future looks challenging but also exciting from
both a global economic and geopolitical point of view, which could also
create new opportunities in world shipping trade patterns. Short-term
developments include the outcome of the current Iran tensions, Brexit, USA-
China trade negotiations – these are just a few of the politically-driven
aspects that already partly influence shipping companies, depending on the
type of ship (container, tanker, or bulkers).
 Other issues – the GDP growth of G7 countries, new infrastructure projects
such as powerplant or steel-plant projects, and Oil prices – are impacting
shipping too. Dubai Navigation Corp’s plans are to continue their low-risk
investment approach and expand their fleet, despite the economic, political,
or regulatory challenges. their aim, within just a few years, is to have a fleet
of over 15 ships, with 15-20% of these newer than their current fleet.
A Positive Maritime World in 2030
 Shipping is turning the world’s 2030 agenda into action
 Bjørn Kjærand Haugland, EVP & Chief Sustainability Officer of DNV GL
presented the company's new report, named “Sustainable Development
Goals: Exploring Maritime Opportunities” for the Norwegian Shipowners’
Association (NSA), exploring the potential for the shipping industry to be a
part of and align with the United Nation's Sustainable Development Goals, in
line with global needs.
Mr. Haugland notes that the analysis outlines five opportunity areas:
 Act on the Paris Agreement
 Support strategies for the reduction of GHG emissions from international
shipping through the IMO
Develop and implement low-carbon solutions onboard ships
Develop international industry standards to scale up low-carbon solutions
Support the development of financial incentives to install low-carbon
solutions onboard ships
Work with stakeholders in the value chain to enable slow steaming
Understand risks and opportunities related to a changing climate and a low-
carbon economy
Facilitate the transition to an equitable and resilient low-carbon economy
Build sustainable communities and infrastructure
 Develop and implement zero-emission transport concepts in cities and other
populated coastal areas
Research and develop methods to measure and control particulate matter
(PM)
Develop transport solutions for moving goods by sea instead of on land
Support sustainable energy infrastructure
Alleviate pressure from land-based activities
Develop and implement solutions for producing and transporting clean
drinking water
 
Protect life in the oceans
 Develop and implement solutions for collecting plastic waste in the oceans
Prevent transfer of alien species across geographies
Use ships to collect ocean research data
Create a sustainable future for the ocean economy
 Facilitate resource harvesting in the ocean space, including food, minerals,
and energy
Create global governance for resource harvesting in the ocean space
 
Promote responsible practices
 
Ensure decent work, living wages, and responsible practices in the maritime
industry
Increase transparency and accountability
Combat corruption and bribery
Mr. Haugland cites that the maritime sector represents the world’s most
important transport infrastructure - transporting more than 80% of the
world's goods, so all the SDGs are relevant to this sector. The shipping
industry has the greatest potential to contribute to the goals of climate
action, affordable and clean energy, sustainable cities and communities, life
below water, good health and well-being, decent work and economic growth,
and life on land.
Maritime Transport Is ‘Backbone of Global Trade and the Global Economy’
Says Secretary-General in Message for International Day. Following is UN
Secretary-General Ban Ki-moon’s message on World Maritime Day, to be
observed on 29 September:
 Everybody in the world benefits from shipping, yet few people realize it. We
ship food, technology, medicines, and memories. As the world’s population
continues to grow, particularly in developing countries, low-cost and efficient
maritime transport has an essential role to play in the growth and
sustainable development. Shipping helps ensure that the benefits of trade
and commerce are more evenly spread. No country is entirely self-sufficient,
and every country relies on maritime trade to sell what it has and buy what
it needs. Much of what we use and consume in our everyday lives either has
been or will be transported by sea, in the form of raw materials,
components, or finished articles.
Maritime transport is the backbone of global trade and the global economy.
The jobs and livelihoods of billions of people in the developing world, and
standards of living in the industrialized and developed world, depend on
ships and shipping. The shipping industry has played an important part in
the dramatic improvements in global living standards that have taken
millions of people out of acute poverty in recent years. It will be just as
critical for the achievement of the 2030 Agenda for Sustainable
Development, the plan agreed by all global leaders last year for people,
peace, planet prosperity, and partnership. Yet the vast majority of people
are unaware of the key role played by the shipping industry, which is largely
hidden from view. This is a story that needs to be told. And that is why the
theme for World Maritime Day 2016 is “Shipping: indispensable to the
world.” The theme focuses on the critical link between shipping and the
everyday lives of people all over the planet. The International Maritime
Organization plays a vital role as the international regulatory body for an
industry that spans the globe. The importance of shipping in supporting and
sustaining today's global society makes it indispensable to the world and to
meet the challenge of the 2030 Agenda for Sustainable Development.
 

The Panama Canal’s expansion remains a symbol of the new era

PANAMA CITY – June 26, 2016 - It was a massive, widely anticipated event:
25,000 people from the heads of states to shipping executives had gathered
at the Panama Canal to celebrate the infrastructure event of the century.
“More than 100 years ago, the Panama Canal connected two oceans,” Jorge
Quijano, CEO of the Panama Canal Authority said at the event. “Today, we
connect the present and the future.”
 

The fanfare was worthy of the event. Panamanians and shippers around the
world had been waiting for the moment since at least 2006 when the project
was first announced. Now, shipments from Asia could travel directly to the
Americas’ East Coast, promising greater opportunities and savings for
shippers.
 “Today, we offer the world new shipping options and trade routes,” Quijano
said. In celebration, COSCO Shipping renamed its 9,472 TEU- sized
“Andronikos,” as “Panama,” and sent it from Greece to make the first inter-
oceanic voyage. The sailing showcased COSCO Shipping's global ambitions
with its Panamax-sized ship, as well as the Canal's ability to handle it. It was
a voyage symbolic of the changes the
shipping industry would behold over the next year, where events that
economists had anticipated for half a decade would finally come to pass.
 
PORTSMOUTH, VA – May 8, 2017 - Less than a year from the Panama
Canal’s announcement of the expansion, the big-ship era arrived on the U.S.
East Coast. This time, it dawned at the Port of Virginia with a call from the
COSCO Development a 13,092 TEU vessel whose journey began in China,
and another public celebration from stakeholders looking for greater import
opportunities. However, much had changed in the year that passed since the
Panama Canal’s expansion. Since at least 2006, it had become clear big
ships would become the norm. Larger ships mean fewer sailings, lowering
both fixed and variable costs. Meanwhile, as the effects of globalization rose
and the world recession subsided, carriers knew the need for cargo transport
would only increase.
 

Ports, carriers, and waterways that failed to acknowledge this would fall
behind. So, too, would carriers who did not adapt to the new seas. In turn,
and in the advent of the big-ship era, carriers devised a series of strategies
to build up their network and capacity while undercutting the competition. It
was an arms race for economies of scale, the opportunity to transport more
at lower marginal costs. Two tactics prevailed: order more big ships and
partner with other carriers to fill up those ships. Over time, this market
trend created an oligarchy within the industry. The industry only saw a 3%
increase in capacity, but the top six carriers now control 68.1% of the
industry’s market share. At the start of 2016, this same top-six group
controlled only 49.9%. This may sound like a success story, but it was truly
the effect of an economic storm that created a sink-or-swim environment for
carriers.
 
COPENHAGEN — May 11, 2017 - The mood on the earnings call was far
more optimistic than it had been a few months prior. Back in February, A.P.
Moller-Maersk's CEO Soren Skou had presided over a meeting to report the
company's second-straight year of losses — the first time that had
happened since World War II. The highlight, Maersk Line, the group's
shipping subsidiary, was not alone in its suffering. Poor financial conditions
led even the world’s then-sixth largest carrier to bankruptcy, driving the
world into a logistics frenzy and shipper confidence in the industry to all-time
lows.
 

"Seven carriers out of 16 or 17 so-called global carriers have or will

disappear," Skou said at the time, listing the various acquisitions that had
taken place over the last twelve months. Yet, he added that that was "a
positive development for the industry." A degree of consolidation, he said,
would help correct for the supply overcapacity that was responsible for low
rates. Today, it seems the worst has passed. "The container market is
clearly improving," Skou said in the May earnings call.
 
The first half of 2017 has seen steady volumes and even more steady rates.
Disruptions from new alliances, port strikes, or other one-off circumstances
continue, but they have yet to cripple the industry. In fact, some analysts
suggest the industry may recoup $5 billion in profits this year, or nearly the
same amount that was lost in 2016.
But a strong recovery means shippers should take note and prepare for a
sellers' market. After all, the shipping industry exists — like any other
market economy — in a boom-and-bust cycle. After a trough is a steady
recovery, and the low rates (and savings) enjoyed by shippers will slowly
disappear, too.
 
And after this trough, a look at capacity and market figures reveals the
global shipping industry reorganized into a sort of oligopoly. Perhaps that’s
the price to be paid for stability.
 
Emerging Technology in Maritime Industry
 
Mar 29, 2019 - AI is the new buzzword in the maritime sector. As
the shipping industry is under a big transformation at a global level, Artificial
Intelligence is already making things easier by seamlessly integrating new
shipping logistics and communication technology to evolve the business
model within the shipping industry.
 
INFORMATION TECHNOLOGY(IT), Big Data Analytics and Robotics in Maritime
Industry
INFORMATION TECHNOLOGY(IT) in Maritime Industry

Ships have undergone much advancement in terms of design, materials,

propulsion, and navigation systems. From the first ships that used muscle
and wind power, to modern-day vessels that have efficient fuel and electrical
systems;
from wooden ships to modern vessels made of steel and composite
materials; from using star maps and astrolabes to using GPS and
computerized maps, shipping has evolved by many leaps and bounds. 
 
In this interconnected world, virtually every industry has at least a basic
computer system and connectivity to a local network and to the Internet.
Modern ships may not have the same computer systems as those found in
passenger airplanes and automobiles; still, they use different kinds of
technologies that make life onboard easier, more comfortable, and more
manageable than ever before.
 

The impact of Information Technology (IT) on organizations that provide

services to the maritime sector is also brought under review with the aim of
identifying the criticality of IT as a strategic business tool in positioning the
organization for growth in the chosen marketplace, achieving reduction in
the cost of doing business as well as criticality for survival as an organization
is taken into consideration. Literature review and information gathering
constitute the bulk of data for this research. Surveys were used to collate
responses from industry practitioners. The responses were analyzed and
relevant details were ascertained. The results
 

 of the survey and studies conducted clearly established the fact that
Information Technology infrastructure is critical to the sustenance of the LNG
shipping industry. Ensuring the retention of seafarers who are key human
resources to a shipping organization is seen to heavily depend on the
provision of reliable IT infrastructure.
 

Modern ships contain much different equipment and machinery that run
round the clock. Systems such as the engine, fuel
delivery, electrical power, climate control, among others, need constant
monitoring. Temperature changes, 

revolutions per minute, fuel and oil flow rates, and other parameters need to
be observed, recorded, and analyzed. By using computers, the task of
record-keeping and analytics would be easier, which in turn improves
performance.
 Ships and their crews are dependent on different types of 
supplies. Among these are food, water, fuel, oil, spare parts, and many
others. By using computerized inventory management systems, records of
supply utilization can be analyzed, and the data can be used to make
utilization and resupply more efficient. Routine maintenance can also be
facilitated through systems that monitor
the daily usage of machinery and record maintenance dates and times. Such
systems help remind the maintenance crew which systems need preventive
maintenance, and which ones are due for replacement.
Navigation systems for modern ships use GPS, radar, sonar, and
computerized maps in conjunction with radio and satellite-based
communications systems. These systems help navigation officers find their
way and follow their routes even in the dark, inclement weather, or low
visibility. Cargo operations require timely processing of movements of cargo
to and from ships. Systems that monitor the weight and balancing of bulk
and liquid cargo are vital not just for quick and efficient transfers, but also
for the safety of shipping and port crew.
 

Training of shipping officers and crew are now aided by simulators powered
by computers. Different situations can be programmed into these simulators,
such as storms, fog, and port congestion, which are necessary for training
officers in handling such situations. Computer simulations can help maritime
students and
seasoned officers and crew learn more effectively than by verbal or
theoretical discussions alone.
 
Big Data Analytics in Maritime industry
 
Shipping is a heavily regulated industry and is responsible for around 3% of
global carbon emissions. Global trade is highly dependent on shipping which
covers around
 

90% of commercial demand. Now the industry is expected to navigate

through many twists and turns of different situations like upcoming
regulations, climate change, energy shortages, and technological
revolutions. Technological development is apparent across all marine sectors
due to the rapid development of sensor technology, IT, automation, and
robotics.
 

The industry must continue to develop at a rapid pace over the next decade
in order to be able to adapt to upcoming regulations and market pressure.
Ship intelligence will be the driving force shaping the future of the industry.
Ships generate a large volume of data from different sources and in different
formats. So big data has become the talk of the industry nowadays. Big data
analysis discovers correlations between
different measurable or unmeasurable parameters to determine hidden
patterns and trends. This analysis will have a significant impact on vessel
performance monitoring and provide performance prediction, real-time
transparency,
 and decision-making support to the ship operator. Big data will also bring
new opportunities and challenges for the maritime industry.
It will increase the capability of performance monitoring, remove human
error, and increase the interdependencies of components. 

However, the industry will have to face many challenges such as data
processing, reliability, and data security. Many regulations rely on ship data
including   the   new  
 EU   MRV   (Monitoring,
Reporting   and    Verification)    regulation    to
quantify the CO2 emissions for ships above 5000 gross tonnages. As a
result, ship operators will have to monitor and report the verified amount of
CO2 emitted by their vessels on voyages to, from, and between EU ports
and will also be required to provide information on energy efficiency
parameters. The MRV is a data-oriented regulation requiring ship operators
to capture and monitor the ship's emissions and
other related data and although it is a regional regulation at the moment
there is scope for the International Maritime Organization (IMO) to
implement it globally in the near future.
 

Robotics in the Maritime industry

 
 

Robotics: Reducing human interaction

One topic that stirs up much discussion is the use of robots. The report
predicts that by 2030 three new types of robots will be used in commercial
shipping: a learning robot; one that can handle an asset – dubbed a
practical robot; and a mini-robot, potentially used for inspections in harsh
environments, for example, to identify and record
 emissions
 and pollutants.
 
These robots are likely to be developed alongside sensors and remote-
control technologies. GMT 2030 states that robotic technologies will
"integrate assets
with other emerging technologies" such as big data and the Internet of
Things and will reduce human interaction with dangerous processes. There is
also a point to be made on recruitment in the industry. The report asserts
that the reduction of human interaction will be a growing trend in the future,
opening up more possibilities for robotics.
 
5 Innovative Robotic Technologies for the Maritime Industry:
 
Machines led us to the industrial revolution. The world we are living in is
very much different when compared to the time a few decades back. Though
there have been several drawbacks, the fact is that machines have made our
lives easier and better. In this new age, robots are adding a new dimension
to this modern world.
 

Industries around the world are now showing more interest in robotics
because it represents the key to future medicine, warfare, a better economy,
and well-being.
 Even the maritime industry is not untouched by robotization. With the
introduction
 of a variety of new robotic technologies, the day is not far when robots will
carry out several important jobs both at sea and onshore.
 
Let’s take a look at some of the robotic technologies of the shipping industry that have
made news lately
 
Fire Fighter Robots:
Shipboard Autonomous Fire Fighting Robot (SAFFiR), developed by Naval
Research Laboratory in collaboration with Virginia Tech and other US
universities, is an autonomous humanoid robot
capable of detecting and suppressing shipboard fires and working shoulder
to shoulder with human firefighters using advanced sensors. The idea is not
to replace humans in firefighting but to aid them in firefighting operations on
ships.
 

In the case of fire on ships, these robots would perform tasks such as
turning valves, picking up and dragging fire hoses, and putting water on fire.
This concept can make use of different fire suppression technologies
including PEAT grenade. The firefighting robot has a vision system to search
for survivors and can withstand heat up to 500 degrees Celsius. It is also
outfitted with multi-modal sensor technology for advanced navigation to
overcome
obstacles and stay upright even in pitching and rolling sea conditions. The
robots can respond to gestures and commands, and its sensor package
includes a camera and gas sensor. IR and UV cameras help it to see through
the smoke and detect the source of excess heat respectively.
 
Several demonstrations and experiments on SAFFiR have been conducted in
the past couple of months with an objective to enhance the firefighting
abilities of the US Navy. This service can also be used to tackle a fire in
commercial vessels and offshore platforms in the future.
 
Hull Cleaning Robots:
 
With increasing consciousness for green shipping, technologies that help in
higher fuel efficiency and reductions of carbon dioxide emissions are in great
demand. Hull roughness management using hull cleaning robots can play a
 vital role in this regard. The build-up of marine organisms on a ship’s hull
also called biofouling, reduces the ship’s speed by up to
 10%. To compensate for the drag, it is said that, a ship may have to use
about 40% more fuel. Sometimes, toxic coatings are applied to prevent
biofouling, but they pose threat to marine ecology. An innovative hull
cleaning robot namely “HullBUG” has been developed by Sea Robotics and
funded by the U.S. Navy Office of Naval Research (ONR) to tackle this issue.
 
The Robotic Hull Bio-inspired Underwater Grooming tool (Hull BUG), is a
small autonomous vehicle weighing 30 to 40 kg. It uses four wheels and
attaches itself to the underside of ships, using a negative pressure device
that creates a vortex between the BUG and the hull. It crawls on the hull
surface and performs frequent grooming (light cleaning of fouling films).
Sensors provide obstacle avoidance, path cleaning, and navigational
capabilities. A fluorometer lets the robot detect biofilm and then it uses
rotary brushes or waterjets to scrub the fouling film off.
 

The developer of the robot estimates that, if these robots are put into
practice, there can be a 5% improvement in fuel efficiency through proactive
grooming, translating into a savings of $15 billion annually for the shipping
industry worldwide and a reduction in 1 billion tons of greenhouse gases
emitted by the fleet. Similar efforts to develop hull cleaning robots is being
done by Keel crab. The product I-keel is a semi-automatic robot fitted with
ip68 high-resolution camera and can be guided by smartphone or tablet.
Keelcrab-one is an underwater robot, which can be controlled by a wired
remote control with a live video feed.
 
Robot Ship Inspectors
Traditionally, an inspection of huge cargo ships for cracks, corrosion or any
wear to ensure that they comply with rising safety standards is a time-
consuming task for surveyors. Moreover, they have to risk their own safety
to climb every nook and cranny of the vessel themselves. Ship Inspection
robots is a robotic technology that can help in this process and also save
time and money for owners, improving the accuracy and quality of these
important inspections.
 
A student team from ETH Zürich and ZHdK in conjunction with Alstom
Inspection Robotics has developed a lightweight and low-cost Ship
Inspecting Robot (SIR). Its prototype is capable of conducting a visual
inspection of ballast tanks and hard-to-reach parts in huge cargo vessels. Its
four magnetic wheels and overlapping wheelbase enable SIR to navigate the
I-beams and other awkward obstacles found inside ship ballast. These robots
can be controlled via a wireless transmitter with the live video feed and its
four infrared distance sensors help in detecting edges and obstacles.
 

Similarly, MINORS (Marine Inspection Robotic Assistant System) and INCAS

(Inspection Capabilities for Enhanced Ship Safety) are EU-funded projects
which aim to support the inspection process of large marine vessels by using
robotics systems.
 
Furthermore, SmartBot is working on a project namely ROBOSHIP which
aims to develop an intelligent multi-sensor robot system for inspection and
maintenance of the water ballast tanks in ships. Bluefin Robotics has also
designed HAUV (an underwater robot) for US Navy to autonomously perform
ship hull inspection and obtain 100% sonar coverage. It is now developing it
further to meet commercial challenges.
 

Anti-Piracy Robots:
 
Recon Scout throw both developed by Recon Robotics, is an anti-piracy robot
that will fight against maritime piracy. The dumbbell-sized robot can be fired
from the cannon within 5 seconds and can survive throws up to 120 feet. Its
magnetic wheels help it to crawl on the ship’s hull before it reaches the
deck. It can be controlled by a joystick from the nearby command center.
The robots can keep eye on piracy activities using its cameras that can see
even in darkness using an infrared camera. The developer aims to quickly
bring a marsupial robot deployment system that enables the robot to break
apart to eject smaller robots. The real-time inside information can help the
Navy team to assess the situation and act accordingly. Recently, the
developer has been given the contract to deliver Recon Scout XT throwable
micro-robot kits to assist US Navy.
 
Robotic Vessels:
 
Recently, Rolls-Royce put forth the designs of unmanned remote-controlled
cargo ships. Though some experts are doubting the idea to convert into
reality, the manufacturer claims to do so within a decade using modern
technologies. The world’s first remote-controlled unmanned cargo ship by
Rolls-Royce is a concept that revolves around a no-crew ship that can be
controlled from the shore. A research project called MUNIN –
Maritime Unmanned Navigation through Intelligence in Networks supported
by the European Commissions, aims at developing and testing this
autonomous ship concept. Read more about this concept here.
 

The vast power of robotics can be harnessed to make shipping faster, safer,
and efficient. With recent advancements in robotics operations such as hull
cleaning, hull survey and inspections can be done with the help of robots
instead of doing processes manually. Robotics combined with the above
technologies can revolutionize the shipping industry and reduce human
intervention to a minimum, thereby improving speed, safety, and efficiency.
 

The ultimate objective of all these technologies is to make the

shipping/maritime industry one of the most innovative, efficient, and
effective industries. Reducing human interaction and intervention to a
minimum will reduce the chances of accidents and incidents as 80% of the
incidents occur due to human error. But, till the time these technologies are
not prepared for all possible situations, an unmanned ship will remain a
dream.
Robotics: Reducing human interaction
 
One topic that stirs up much discussion is the use of robots. The report
predicts that by 2030 three new types of robots will be used in commercial
shipping: a learning robot; one that can handle an asset – dubbed a
practical robot; and a mini-robot, potentially used for inspections in harsh
environments, for example, to identify and record emissions and pollutants.
 
These robots are likely to be developed alongside sensors and remote-
control technologies. GMT 2030 states that robotic technologies will
"integrate assets with other emerging technologies" such as big data and the
Internet of Things and will reduce human interaction with dangerous
processes.
There is also a point to be made on recruitment in the industry. The report
asserts that the reduction of human interaction will be a growing trend in the
future, opening up more possibilities for robotics.
Robotic welding arms cut ship construction time and costs
South Korean shipbuilding companies Hyundai Heavy Industries and Daewoo
Shipbuilding & Marine Engineering are using robotic welding arms to reduce
welding times and cut construction costs.

Hyundai Heavy’s 670kg industrial robot, which resembles a robotic arm, can
curve and weld steel plates for the front and back of vessels and is
controlled using separate design software. The arm was designed and tested
in-house and

 is scheduled to begin operation next year. The arm will cut welding time by
two-thirds and save around $9.4m annually,  according to a company
spokesperson.
 

Daewoo Shipbuilding has been using five 16kg robotic arms since 2016 to
weld steel parts in the construction of ice-breaking natural gas carriers. The
arms, nicknamed ‘Caddy’, have saved the company $4.2m in construction
costs for
each vessel, and have prompted the development of an even smaller
welding robot weighing 14.5kg.
“In this current environment, it’s very important to cut costs wherever
possible,” Yuanta Securities Korea analyst Lee 
Jae-won told Bloomberg. “These automation efforts will begin to pay off
once 
orders start to show clearer signs of recovery, probably from the second half
of this year.”
Some Hyundai Heavy vessels require 200 people to build, unlike the car
manufacturing industry, where around 70% of tasks are completed by
machines. The shipbuilding industry has adopted automation more slowly
than other manufacturing industries due to variations in the specifications
and functions of individual ships.
 

“The shipbuilding industry is so fragments and the customers and very

fragmented,” said Rolls-Royce vice president of concepts and innovation for
the marine business Oskar Levander. “Every shipowner has their own
preference in what they want in a ship.”
 
Falling ship prices and increased demand have forced the industry to adapt.
A 10% fall in ship prices since 2014 has made employing large numbers of
staff unsustainable, and both Hyundai Heavy and Daewoo Shipbuilding have
received more contracts – 29 up from 21 and 21 up from four respectively –
this year than in the same period in 2017.
 

Drones
 Another leading revolution in the marine sphere is drone innovation.
Although the use of drones in the marine sector is not new the range of
applications for drones in the marine environment has expanded drastically
into exploration, environmental monitoring, and intervention which has
rapidly increased the value of the industry.
Deploying high definition and affordable camera-equipped drones enables
researchers and surveyors to capture more accurate evaluations of
infrastructures and reliable images/data in a safer and effective way.
Especially 

identifying substantial corrosion, significant deformation, fractures, damage,

or other structural deterioration can 
be concluded at a fraction of a time and cost-effectively.
 
Another key advantage of using drones for cargo tank inspection, risk of
damage to the coating is eliminated. Overall the usage of drones in the
maritime industry cuts cost, reduce the human risk factor, and saves
time beyond question. Many big shipping industries like DNV- GL, Lloyds
Register, Maersk, Walmart, Amazon, and DHL have transformed their
existing operations and logistics movements by embracing drone technology.
 
The Technologies that will transform Shipping Industry by 2030
 The Global Marine Technology Trends 2030 report, released in September,
aims to shine a light on the transformative aspect of 18 technologies on ship
design, naval power, and the use of ocean space by 2030. Lloyd’s Register
(LR), alongside QinetiQ and the University of Southampton, has created the
Global Marine Technology Trends 2030 (GMTT 2030) report to ask, ‘what’s
next?’ in the maritime industry. GMT 2030, which assessed 56 technologies
before focusing on 18 specific technologies, identifies two areas: those that
will transform ship design and building, and those that will impact safety,
commercial and operational performance.
"Shipping is likely to evolve quickly now," said LR marine director Tom
Boardley in September. "That evolution is likely to be uneven but while 2030
is not far away, we think that shipping is likely to have changed
significantly."
Nick Brown, brand and external relations manager at LR, says: "It’s hard to
say just one technology will transform the industry. Crucial is the interplay
and overlap between the technology areas. For example, sensors providing
data that can help transform ship operations. We can see how digital
technology and smartphones have helped transform how we live our lives
and disrupt business models. This transformation has yet to make a
significant impact on shipping."  Brown believes that the impact could be
seen earlier, or later, for that matter. "We need to be prepared to be
surprised," he says. "If you could bring someone back from the 1960s to
today, they might be surprised to see that 50 years on we are still driving
around in cars. They would be impressed that they don’t trust anymore and
at the levels of performance and comfort. But they would probably be truly
amazed by digital technology." The response from the industry has been
"overwhelmingly positive and supportive", says Brown, adding that people
are hungry for ideas about the future. So, with change upon us, how will the
industry evolve and what is the potential of some of these technologies?
 
Advanced Materials: The Nano Scale
 Changing the materials currently used forms a big part of the report. While
metals will remain the dominant force for ship structures, there will be an
opportunity to refine their characteristics through what is known as
microscale or Nano-scale manipulation.
 For example, implementing magnesium or calcium Nano-particles could
strengthen welds, while a new anti-corrosion coating will be used to better
protect vessels. There is also the chance for shipping companies to improve
sustainability and fuel economy by using advanced high-strength steel,
aluminum, glass fiber, and carbon-fiber composites. GMT 2030 also
mentions the possibility of self-repairing materials.
 

Big Data Analytics

 With more and more data being collected from sources such as
oceanographic data, maritime accident data, and personal information, one
question is: how can this be analyzed and used to improve ship operations?
The evolution of big data analytics creates the ability to use algorithms to
look at correlations between the different forms of data, with the report
claiming that "when the correlation is spotted, new algorithms will be
established and applied automatically".
 
Despite the advantages of more data and better analysis, the issue of
cybersecurity and data protection remains. Data will have to be kept secure
from malicious cyber-attacks.
Sensors: Wireless Monitoring
 A new generation of sensor technologies will remove the need for regular
visits to remote locations. Sensors will be able to collect data autonomously
and then relay this information in real-time. Capturing this data will allow
shipowners to improve overall maintenance cycles of vessels, including
condition monitoring and condition-based monitoring. For example, the
sensors will be able to notify shipowners when a piece of equipment requires
maintenance. A wireless network of sensors will need to be miniaturized and
have self-calibration characteristics, among others, the report points out.
However, as with big data analytics, cybersecurity will need to be at the top
of the agenda in the area of wireless technology.
 
Communications: The Connected Ship
 
The growth in communications – from Wi-Fi to 5G connectivity – will see the
birth of the ‘connected’ ship. This ship will allow operators to access live
audio as well as HD and 3D video from onboard recording devices and
remove the need for physical onboard surveys. In what is currently a hotly
debated topic, the report says that real-time decision-making in ship
management and autonomous operation will also be feasible. As well as this,
enhancements in communications from ship to shore could improve crew
welfare, according to the report.
 

Power and Propulsion: New technologies

 Power generation will change dramatically, with alternative fuels, energy-
saving devices, renewable energy, and hybrid power generation all
potentially playing their part. GMT 2030 describes the challenges as being
two-fold: environmental and commercial, including rising fuel costs and fleet
overcapacity. With climate change never off the agenda, GMTT 2030 says
that future governmental carbon policies could increase the use of
alternative fuels such as hydrogen fuel cells. Testing of these new
technologies – which could include diesel-electric and hybrid propulsion – will
most likely start in short-sea ships, tugs, offshore support vessels, yachts,
and inland waterway vessels.
Robotics: Reducing Human Interaction
 One topic that stirs up much discussion is the use of robots. The report
predicts that by 2030 three new types of robots will be used in commercial
shipping: a learning robot; one that can handle an asset – dubbed a
practical robot; and a mini-robot, potentially used for inspections in harsh
environments, for example, to identify and record emissions and pollutants.
 

These robots are likely to be developed alongside sensors and remote-

control technologies. GMT 2030 states that robotic technologies will
"integrate assets with other emerging technologies" such as big data and the
Internet of Things and will reduce human interaction with dangerous
processes. There is also a point to be made on recruitment
 
in the industry. The report asserts that the reduction of human interaction
will be a growing trend in the future, opening up more possibilities for
robotics.
 
Autonomous Systems
 Autonomous vehicles are appearing in many transport-related industries,
including the air and automotive sectors. Their use in the maritime sector
will continue to increase, says the report, to the point where autonomous
surface and underwater vessels are viewed as just another aspect of the
industry. These vehicles will greatly change the way in which those in the
industry explore, monitor, and interact with their environment. From a
commercial point of view, the vehicles will be cost-efficient and widely used
in deep ocean mining and oil and gas operations. There will be a mixture of
underwater, surface, and even air vehicles, all of which will be fitted with
marine renewable energy-harvesting devices, advanced propulsion systems,
and sensing and communication capabilities.
The Technomax Era
 The scenarios in GMTT 2030 – dubbed Technomax – are "about technology
uptake", says Brown. As an example, a Technomax LNG carrier will be built
from advanced materials such as graphene to make the vessel lighter, while
graphene sensors detect traces of pollutants and emissions. A Technomax
container ship in 2030 is envisioned to have on-board data analytics
machines, connected to onshore decision-support systems, which will
manage maintenance, navigation, and communications, enabling it to be a
‘smart’ ship.
 There is also talk of a bulk carrier using hybrid LNG marine diesel fuels
mixed with biofuels as its main drive for propulsion. "In GMTT 2030, the
scenarios are about the Technomax, rather than economic scenarios in the
future. It has not been about what the future will or could look like but
trying to understand the forces that will shape our futures," explains Brown.
With Brown admitting that the transformation could come sooner rather than
later, it is certainly an uncertain, yet exciting time for the industry. "It’s
going to be interesting to see," he concludes.
 

An Autonomous Ship in Maritime Industry

HOW WILL AUTONOMOUS SHIPPING AFFECT THE MARITIME INDUSTRY?
 The ever-increasing level of technology in the realm of artificial intelligence
is sweeping into the territory of autonomous shipping. The latest
beneficiaries of this technology include remotely-controlled vessels piloted
by human controllers onshore and autonomous ships. Developments with
telecommunications, electronic sensors, and computing technologies have
been moving into other autonomous transportation vehicles for some time
now, including planes, helicopters, planes, and trains. Ships are now
becoming an additional focus as they move toward more autonomous means
of transportation develops further.
 At The Krist Law Firm, P.C., we stand on the side of injured maritime
workers who have incurred suffering and loss as a result of an injury at sea.
With our experience and resources, we’re here to work

 on your behalf, for the compensation, you may be owed in the aftermath of
your injuries
TECHNOLOGICAL AMBITIONS FOR AUTONOMOUS SHIPPING
 
Rolls-Royce is one innovator working on the development of autonomous
technology in the maritime industry. The company has the vision to
introduce autonomously operated vessels into service over the next several
years. Specifically, the company hopes to release a remotely operated
autonomous local ship by 2020, a remotely operated autonomous ship
traveling in international waters by 2025, and fully autonomous unmanned
ships traversing the ocean by 2035.
 

Automated Ships and Kongsberg Maritime are following an ambitious project

timeline to build Hronn, the first unmanned, fully autonomous offshore
supply vessel. The goal is
to have the vessel in operation by 2018. On a larger scale, Japanese
shipping companies are working in conjunction with shipbuilders to design,
develop, and construct self-piloting cargo ships that could
 

 enter service by 2025. The One Sea ecosystem project in the Baltic Sea,
begun in 2016, aims to introduce
 fully remote-
controlled vessels within three years and reach the goal of having
autonomous commercially operated maritime vessels traversing the seas by
2025.
 
Remotely controlled and autonomous shipping technology is in the process
of rapid development. Eventually, vessels on the sea
may have the capability to efficiently and successfully evaluate their
surrounding environment as well as the health of the ship itself, enabling
them to make crucial decisions based on this data. The operation of shipping
vessels and the entire chain of cargo transport can be potentially
transformed through the introduction of automation in the maritime
industry.
 
POTENTIAL BENEFITS
 
Autonomous shipping holds the potential for providing numerous benefits to
the maritime industry. One benefit is the reduction of human error that often
plays a key role in the cause of accidents at sea. Some estimates have
placed human error as the cause of marine accidents at 75 to 96 percent of
cases. Additionally, after a review performed by Allianz Global Corporate &
Specialty – an insurance company that provides different types of industrial
insurance worldwide – of 15,000 marine liability insurance claims, it was
determined that 75% of all the claims are due to human error. The
reasonable assumption is that autonomous, unmanned shipping vessels
would be safer for human life, eliminating the risks faced by crews on the
high seas that can potentially result in injury or death. In addition to
protecting human life, another potential benefit involves the enhanced
productivity introduced through the reduction in fuel costs. It has been
estimated that crew costs that include air- conditioning units, crew quarters,
heavy ballast, and other amenities, along with the salaries of seamen can
reach 10 to 44 percent of a ship owner’s operating expenditure depending
on the nature of the vessel.
The reduction in weight due to eliminating many of these items from the
ship can amount to lesser fuel costs and more space for cargo. As well, a
potential improvement in logistics may be realized through the addition of
designated lanes on the high seas for autonomous shipping which may
contribute to a more efficient cargo transport system. The possibility of a
reduction in piracy incidents has been suggested as autonomous shipping
increases since the leverage often used in these incidents – the crew itself –
has been removed. However, the potential also exists for piracy threats to
increase since bandits on the high seas may work harder to compromise
cybersecurity obstacles in order to gain access to these vessels.
 

POTENTIAL DOWNSIDES
 Although benefits exist from the implementation of autonomous shipping in
the maritime industry, the speed at which this technology can be
implemented into international shipping processes may depend on several
factors. The cost of manufacturing a chip with the required technology for
remote-controlled and autonomous operations may be significantly higher
than that for a conventional vessel.
Currently, low-cost labor seafarers handle shoreside support services for
repairs, maintenance, and other functions. Eliminating the crew would
require the development of shoreside infrastructure systems around the
globe for monitoring and control purposes, as well as maintenance and
repair operations. There may be little economic justification for ship owners
to embrace the concept of autonomous ships and all of the associated
shoreside infrastructure required if the added costs of implementing an
automated shipping system cannot be counterbalanced by the reductions in
crew-related costs. Shipowners will need to see a competitive advantage in
the elimination of crew costs before fully embracing autonomous shipping.
There is doubt among some as to whether machines can perform with the
intelligence and decision-making capabilities equivalent to or better than
humans in the face of complex maritime situations.
Crews on the high seas engage in active skills that keep them sharp in
solving problems on a daily basis. Transferring human participation to fewer
active tasks such as monitoring displays shoreside may have an unintended
effect of facilitating human error. These are issues to consider regarding the
effect of implementing an automated shipping system in the maritime
industry.
 

SAFETY, REGULATORY, AND TIMEFRAME CHALLENGES

 
An array of regulatory and legal issues must be resolved before a full phase-
in of autonomous shipping can occur. This process will likely take place over
a considerable period of time as maritime law and conventions are reviewed
and adjusted to conform to the needs of autonomous ships. The potential for
collisions between automated ships and other vessels, particularly smaller
vessels, must be addressed as well. For the most part, larger vessels have
tracking devices as opposed to smaller vessels.
 

Another consideration involves the ability to react to an environmental

disaster in a timely fashion. Environmental disaster mitigation crews maybe
hundreds of miles away if an incident occurs on the high seas that involve
fire or hazardous material spill of some nature. As well, sufficient provision
to effectively handle and counteract cybersecurity threats – such as a
manipulated GPS signal – must be included in an overall strategy for
implementing an unmanned, autonomous shipping system. There are also
navigational considerations to think about when traversing congested routes
and entering ports. Severe storm conditions may also pose a significant
threat to the automated shipping model unless the technology is robust
enough to match challenging situations.
 During the initial years of implementing autonomous, unmanned shipping
into maritime routes, many ships traveling along coastal paths may be
controlled from the shore. In the initial stages, autonomous ships may
operate on shorter regional routes, with larger-scale global autonomous
shipping gradually increasing over time as the regulatory, infrastructure, and
technology pieces are resolved and eventually implemented. Artificial
Intelligence (AI) and autonomy are disrupting every sector including the
maritime industry. However, it’s no secret that it comes with its fair share of
challenges – whether it’s the high costs involved or the infancy of the
concept. During the roundtable event, moderated by Victor Chavez, the chief
executive of Thales, autonomous ships – in the commercial sector as well as
naval realm – were the focus of discussion. This included ensuring safety,
getting adequate talent and funding, and adhering to government
regulations. The panel discussed the ongoing trends and innovations in the
sector and looked at what the future holds for using autonomy in ships. Here
are the five key takeaways from the event.
Autonomy is now a necessity for the maritime industry to “remain
relevant”.
 While people have been talking about what autonomy might mean in the
maritime industry for a few years, it has now become a necessity for the
sector to progress. As James Fanshawe, chair of the UK’s maritime
autonomous systems regulatory group puts it: “90% of trade by volume
comes into the UK through the sea and making sure that trade can move
around the world safely is something we must focus on. Autonomy will be
critical in the future and in developing the maritime industry so that it
remains relevant for the next 50 years.” Fanshawe detailed that for those
entering the sector, it was necessary to see whether autonomy could be the
answer to the many shipping woes. “The industry was quite a slow burner as
a lot of people wanted to wait until other people went further down the track
to see what opportunities this really presented,” he said at the roundtable.
According to Fanshawe three main areas which will leverage autonomous
technology the most would be the marine scientific research industry, the oil
and gas industry, and defense. Given how much manpower is needed to
operate the ships, it’s obvious now it would be ideal to atomize them. It
won’t need anyone to give instructions about where to go. “The gradual
capabilities of the sensors and its ability to be integrated together is one of
those areas of trying to be clever with technology,” he said.
 
   2. With autonomy comes to the need for cybersecurity
 While autonomy offers a solution to many issues facing the maritime
industry, cybersecurity is one of the key challenges, and countering
cyberattacks is imperative for every shipping company. Professor Stephen
Turnock from Maritime Robotics Lab at the University of Southampton noted
that the consequences of the failure to protect one’s data are much greater
now than what it was in the past, Turnock noted. “If you take an
autonomous ship you can’t just look at the vessel, you’ve got to look at the
control station,” he said. “We have seen very high-profile phishing attacks
against very large shipping companies. The world of autonomy is got to be
as efficient if not more given how autonomous ships rely on technology in a
variety of senses.”
 Fanshawe added that autonomy could also be a solution as most
cyberattacks are the result of human errors. “For instance, if someone goes
on board and happens to update software and shoved a USB stick into the
computer, the
entire system could be infected,” he said. How vessels will make sure their
software is robust will be a major priority and autonomy could remove
human error.
 
   3. Collaboration with the government will be key for autonomous trade
 It’s fair to say that the UK is not lagging behind in terms of autonomous
ships as it deployed its first autonomous ship, SEA-KIT Maxlimer to Belgium
in May this year carrying a box of oysters. Building on that Fanshawe said
autonomous ships can be pivotal in the trade as once programmed, they can
run the operations and can be remotely controlled if need be. Continued
collaboration with the government will be essential to ensure trade continues
via autonomous vessels, Fanshawe said.
 There is a possibility for ships bigger than 18 meters to be used for trading
so more SMEs can capitalize on the shipping industry for business. This is
one of the factors which will also drive more potential young maritime
engineers as the industry is facing a lack of talent, said Turnock.
    4. Autonomy will be essential for reducing carbon emissions
 
One of the main goals for the shipping industry is the need to reduce
maritime emissions. “If we can take goods to a position where it’s the
closest to where it’s needed, we can start to reduce road transport and of
course that means fewer carbon emissions,” Fanshawe added. “And
autonomy makes this easier and more efficient by enabling massive fuel
savings.”
 

“We are under the cusp of a wave, autonomous vessels in large numbers are
at sea and a massive amount of work is going on to ensure they are being
done safely as they did yesterday and probably more so in the future,” he
continued. In fact, it was said that reducing emissions was a goal not just for
commercial trade but also for naval ships.
 

Given how the International Maritime Organization has set targets to reduce
emissions by 50% by 2050 compared to 2008, it will become a priority for
ships that are being manufactured going forward.
 
    5. Autonomy can save lives
 Another area where autonomy will benefit the maritime industry will be by
reducing accidents caused by human error. “They are certainly going to be
using these technologies like radios and visual technologies to increase the
chance to reduce the potential for accidents to happen,” said Fanshawe.
 “Whether you want to do quick inspections or make sure your premises are
secure, there are excellent examples of what unmanned surface vehicles
(UAVs) can do.” Autonomous ships will be programmed to identify and
recognize objects, such as navigation aids and other vessels around the
ship, improving situational awareness and increasing safety. “Specifically,
the technology will provide data from environmental sound recordings and
satellite navigation,” said Fanshawe.
 Advanced materials: The Nanoscale
 Changing the materials currently used forms a big part of the report. While
metals will remain the dominant force for ship structures, there will be an
opportunity to refine their characteristics through what is known as
microscale or Nano-scale manipulation. For example, implementing
magnesium or calcium Nano-particles could strengthen welds, while a new
anti-corrosion coating will be used to better protect vessels. There is also the
chance for shipping companies to improve sustainability and fuel economy
by using advanced high-strength steel, aluminum, glass fiber, and carbon-
fiber composites. GMT 2030 also mentions the possibility of self-repairing
materials.