Crewless ships: brave new world and regulatory challenges

Posted in Transport Northern Africa Southern Africa Central Africa Western Africa Eastern Africa Blog post

Crewless ships are already a reality that will introduce many benefits and challenges to global trade. Owners, financiers, insurers and regulators are going to have to get to grips with the numerous regulatory and legal challenges that the move towards fully autonomous ships is going to bring.

At around the same time as the first driverless Uber truck delivered its load of beer in Nevada, the first unmanned ship was registered in the UK and a chemical company announced that its container ship, the mv Yara Birkeland, will commence operations in 2018 and will be fully autonomous from 2020.  The insurance, regulatory and legal frameworks need to adapt to crewless and autonomous ships.  It is quite clear that the African maritime nations, along with most of the world, has a huge amount of work to do before remote controlled or autonomous ships operate in our waters.

As artificial intelligence advances, automation which already exists in respect of cargo systems, navigation and the engine room will develop into crewless ships that are remotely controlled by humans from shore and eventually into fully autonomous ships with no human intervention. This is going to happen within two  years. The green shoots reflected above are slightly misleading as the ship registered in the UK is a seven metre long off-shore support vessel and the Yara Birkeland will initially operate with a crew on a very limited and repetitive voyage of only 40 miles.  The fact however is that within two years there will be fully autonomous, crewless container ships operating in crowded coastal waters and in Africa and most countries, insurers and legislators are simply not ready for that prospect.

The benefits of autonomous ships include cost savings on crew wages; increased cargo carrying capacity since crew accommodation will not be necessary; no more staff shortages of experienced, competent officers; and increased safety as human error, which is responsible for 75% of marine losses, will be removed from the equation. To some extent this will be counterbalanced by the fact that other risks will eventuate such as the inability to fight fires and the increase in the environmental risks if no crew are on board to deal with emergencies.  In addition, there is the risk that control of autonomous ships will be seized by people with criminal or political motives.  Cyber security and security of communication will become absolutely critical for the safe operation of these vessels. 

The vast majority of regulatory regimes place an obligation on the master and crew of the vessel to, for example, keep a lookout, navigate safely, avoid collisions and avoid damage to the environment. Those regimes then impose liability on the owners of the ship and/or the employers of the master and crew, usually based on the negligent acts or omissions of the master and crew.  Those regimes were crafted in contemplation of there always being a captain and crew to operate the vessels making them and their employers responsible for any failure to operate the vessels properly.

Remove the master and crew and many of these regulatory and liability regimes become hollow shells. It is relatively easy to conceive transferring responsibility for safe lookout and safe navigation from the officer of the watch to the remote control operator sitting ashore. If however there is no human in the decision-making loop, the position becomes far more complicated.  The default position may be that liability will automatically attach to the operators of a vessel.  Most legal systems are however uncomfortable with attaching strict liability to somebody for all consequences of a particular operation.  That discomfort is ameliorated by the fact that the operators may have a claim, for example, against the developers of software that made a faulty decision or against the manufacturers of a radar that failed to operate.

This will have a huge impact on liability regimes and insurance for the manufacturers and suppliers of equipment. Ships, currently, have multiple layers of backup equipment to cater for the fact that they are sometimes at sea for over a month at a time.  In a hostile environment such as that, equipment is almost bound to fail when the ship is not in port. Currently, if all equipment fails, the crew can still act to rectify a problem.  More redundancy will probably have to be built into the systems but manufacturers may well be uncomfortable at the prospect of becoming liable for wreck removal costs, such as the US$1 billion on the mv Costa Concordia, because their radar failed to detect another vessel or land mass.

There is no doubt the regulatory regimes will need to be reviewed to create more certainty about responsibility and liability. This in turn will require insurers to understand the risks that they will be faced with once remote control and autonomous ships become more common.

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