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The future impact of autonomous ships on the maritime industry

By Dr. Robert L. Gordon | 09/30/2016 | 8:19 AM


Recently, Rolls Royce along with the government of Finland has announced that they would have the technology available to operate autonomous ships by 2025.  Although this is still nine years away, a shift like this can fundamentally change shipping as we know it today.  With technology, this means that even the largest most complex cargo vessels could operate with much smaller crews (or no crew at all) within a decade.  Consider the ramifications of this shift.

First, the human costs of operating the ship are often one of the highest costs.  Second, many ships operate under flags of convenience to hire an international crew.  Third, human error has been cited as the most common reason for shipping incidents.

Fully autonomous ships could technically operate without a crew and could sail between ports.  Ship technology already monitors all other targets in the area and so with systems to keep distance between vessels, there is a strong case to move to more technology with smaller crews.  This shift could drastically reduce the overhead costs for a vessel, allowing crew costs to drop down in costs, making it more attractive to maintain more national ships than international ships.  Even a minimal crew of three watch keepers and a cook would be substantially less than current ship manning costs.  This cost reduction would certainly change what nationality of the crew would be hired.

The flag of convenience benefit is lower taxes and the hiring of an international crew, which can be substantially less expensive.  Although the tax benefit would remain, the cost of crewing would still drop and offer the owner significant cost savings, which in turn can reduce cargo costs, given fully autonomous ships.  Even smaller crews would offer a significant reduction in labor costs, making autonomous ships more attractive to ship owners.  Another area of cost savings would come from insurance rates.  Smaller crews mean fewer potential legal labor disputes as well as increased technology and operations would reduce incidents and injuries.  Avoiding expensive legal settlements can be a boon to companies that operate in litigious societies like in the U.S.

Human error and shipping incidents have had a long association.  Although in many cases, there were multiple human errors that resulted in an incident or casualty, automation can help break this chain of casualty and avoid incidents.  Note that many ships already operate with an unattended machinery space, so there is already a case to avoid human intervention and monitoring. 

All of these upcoming factors could result in a shift in flag state of new or updated ships than embrace fully autonomous operation.  It is clear that new regulations must be developed and created and a flag state that swiftly moves can offer greater incentives to owners that embrace this technology.  Furthermore, operators that track and utilize this technology can build the insurance case that their operations are clearly safer and have fewer injuries and incidents than others. 

Ultimately, the objective is to move to lower costs of logistics and more efficient operations.  However, there will be a period of transition as society becomes more accepting of this technology.  Some people state that society will not accept it and that the change will never happen.  For those people, I remind them of this interesting story.   The modern elevator was initially operated and controlled by a person.  Elevator operators were common sights in tall buildings until around 1945.  Building owners for primarily cost reasons moved to fully autonomous elevators.  The public accepted the change and building owners moved swiftly to replace old elevators with autonomous elevators.    I suspect that society will do the same with regards to autonomous ships.



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About Dr. Robert Lee Gordon

Dr. Robert Lee Gordon

Dr. Robert Lee Gordon is program director of the Reverse Logistics department at American Public University. Dr. Gordon has over twenty-five years of professional experience in supply chain management and human resources. He holds a Doctorate of Management and Organizational Leadership and a Masters of Business Administration from the University of Phoenix, as well earning a Bachelor of Arts degree in History from UCLA. Dr. Gordon has spent more than 14 years teaching reverse logistics, transportation, project management, and human resources. He has published articles on reverse logistics; supply chain management; project management; human resources; education, and complexity. He has also published four books on Reverse Logistics Management; Complexity and Project Management; Virtual Project Management Organizations, and Successful Program Management..

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