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Live From SMME 2016
Oskar Levander, vp of Innovation for Rolls Royce

'Uber of the Sea' is near but is the industry ready for the sea change?

Unmanned vessels will be a reality within five years and stand by for a low-cost, “Uber of the Seas” style trading model to infiltrate commercial shipping soon. But are legacy operators really ready to adapt to the inevitable digital disruption brought about the “Smart Shipping” evolution and, perhaps more pertinently, are they willing to invest in the necessary technology?  

Those surprising revelations ensured a fascinating opening to Dubai Maritime Week on Sunday – and plenty of lively debate from the floor as legacy operators presented the difficult commercial realities of the day as a counter argument to the wider adoption of technology across the merchant fleet.

Of all the insights shared by a five-strong panel charged with selling the benefits of smart shipping to an audience of Middle East industry leaders assembled for the Dubai Maritime City Authority’s “UAE Maritime Leaders Summit”, the one offered by Transas ceo Frank Coles was the most startling.

Asked what concrete changes the new era of ship to shore connectivity would bring to the industry within five years, he said: “We’ll see unmanned ships within five years time in the Baltic Sea, absolutely”.

Volker Bertram, senior project manager for DNV GL Maritime Advisory, says IMO regulations would prevent wider use of automated vessels in the immediate future but he anticipates “prototype demonstrators” within five years and like Coles, greater management of vessels from shore control rooms.

Oskar Levander, vp of Innovation for Rolls Royce, set the scene for an “Uber of the Seas”, saying shipping could learn from the aerospace industry and the business model of low cost air carriers in particular. Where those airlines operated fleets of aircraft and targeted regional markets, “today pretty much every ship built is a prototype” and the jury remains firmly out on the economy of scale experiment of ever larger vessels.   

 “Take low cost airlines. They came in about 15-20 years ago and they disrupted the market. They cut out the travel agent, the middle man. They used standard aeroplanes throughout the whole fleet and they skipped the big airport hubs and went more point to point, and they utilised their fleet very efficiently.

“It doesn’t mean we don’t have the legacy airlines but they’re maintaining in a different market. Can we see something in the future with smart shipping, something similar?

“That’s actually my prediction…we will see a new generation on the back of a low cost market and the technology is going to enable us to do this. We are going to have smarter ships, standardised ships that are very fuel efficient, we are going to have low crewing costs [with less seaborne crew supplemented by crew using technology ashore], we might think of new ways of financing the ships, like leasing like the airlines… we might think about new routes.

”I think the key here will be Internet of Things working in a digital marketplace, so [traditional trading methods] might be disrupted, how we fill the ships, how we sell it. Think about the Uber of the Seas as a picture.”

The crystal ball gazing was greeted with resistance from the audience with one ship owner asking:  “We are hearing lots of wonderful theory but what is a ship owner going to gain, where’s the hard cash [evidence]?

Even conference moderator, Michael P Elwert, group ceo of Elektrans Group, agreed the most technologically advanced ships afloat still had to compete for the same low freight rates and were no more attractive on the second hand market than a “standard” vessel.

Coles agreed, saying only regulation or the prospect of making money would see ship owners invest heavily in technology. But all the panellist agreed change was inevitable and those who didn’t invest ran the risk being left behind. The new 0.5% sulphur emissions cap announced by the IMO and waste water management regulations could be the catalyst for change.

“How many of you are afraid of being disrupted…do you see it as a threat?” Levander asked the audience.

“If you think of existing shipping, there are a lot of ship owners out there with fairly new fleets, high debt unfortunately, a lot of crew on board….in the new digital marketplace I might not invest in the asset itself, it might be a new way, a disruptive way.  

“One of the things we need to think about is who are the new players, will they remain the same? One thing is for sure, shipping is not going to look the same in 10 years time but there are great opportunities out there.”

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