As the shipping industry has been shaken by a wide range of new technologies and digital innovations over the last years, there is an obvious lack of clarity and standardisation for the future, which requires a proper risk appreciation by the marine insurance industry, argues Mr. Henry Cunnington, Associate, Clyde & Co, and IUMI Professional Partner.
The shipping industry has recently seen a large number of exciting and futuristic proposals for automated and digital innovations. The intention is to increase efficiency, reduce costs, save time, and promote safety at sea. The increasing numbers of automation and digitisation solutions should lead to a corresponding increase in standardisation and regulation. However, this will take some time to achieve, and insurers should therefore be cautious when approaching these new risks.
An obvious example is autonomous, unmanned vessels. This concept has caught the public eye, and testing of small unmanned ships is underway in the Norwegian fjords. While DNV GL is managing those tests, there are multiple similar proposals from other manufacturers which are yet to be studied. The IMO’s Maritime Safety Committee has outlined four classes of autonomous vessel, providing plenty of scope for a variety of different designs from innovators.
These new technologies require skilled specialist technicians to operate them, whether working remotely or as additional crew. However, it remains unclear whether there will be sufficient numbers of trained operators for this as-yet undefined equipment. Inevitably, this raises the possibility – if only temporarily – of individual vessels being improperly crewed and maintained. Concerns have also been raised that remote operators of, and suppliers of equipment for, autonomous ships may not fall within the limitation regime in the London Convention.
Shore-side services have received similar treatment. Innovations include blockchain in cargo sales, cloud storage of ship data, and automated cargo discharge. Concerns over cyber risks have already been aired in the market but, again, the variety of technologies increasingly available to carriers, cargo interests and ports means the level of risk will vary between providers.
This apparent lack of clarity and standardisation in the future of shipping should not cause alarm bells to ring – it is inevitable in the early stages of innovation. However, the marine insurance industry should keep an eye on the variety of solutions proposed and ensure that it appreciates the risks involved as the technologies develop. The usability of many solutions has not yet crystallised and, while that should not prevent investment in the future for shipping, stakeholders should nevertheless proceed with both eyes open.
Above article has been initially published at the IUMI Eye Newsletter June 2019 and is reproduced here with the author’s kind permission.
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
About Henry Cunnington, Associate, Clyde & Co
Henry joined Clyde & Co in 2016 and qualified into the Energy, Engineering, Marine and Construction Team in 2018. He has experience in a variety of disputes ranging across the marine, upstream, downstream and renewables sectors. These include international arbitrations between energy contractors, advising energy insurers on coverage issues, and acting in charterparty claims. Henry has been involved in the full spectrum of dispute resolution processes, including cases in the English High Court, international arbitrations (ICC, LCIA and ICSID) and mediations.
