Unmanned vessels: The future for carriage of goods?

The future is here, but what does this mean for the carriage of goods?
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By Jessica Maitra
Partner in Clyde & Co’s Marine and International Trade department. She has an international practice with an emphasis on shipping, trade and insurance work.

Crewless vessels may have once seemed like the stuff of science fiction, but unmanned ships have become a reality.

MV Yara Birkeland, advertised as the world’s first fully electric and autonomous container ship with zero emissions, is planned to start operating in the first quarter of 2020 in Norwegian coastal waters.

Electric barges, dubbed the ‘Tesla of the canals’, are apparently already in operation both in Northern Europe and in China.

The future is here, but what does this mean for the carriage of goods?

This year the IMO is assessing the most appropriate way regulations can address the development of unmanned shipping operations. Furthermore, the IMO has established a working group to develop guidelines for testing and trials of autonomous ships to be discussed at the Marine and Security Committee’s next session in June 2019.

Dealing with the regulatory position of unmanned ships is a key first step to the use of these vessels in international shipping. Regulation, however, is only one aspect of the legal regime change required for unmanned ships to carry goods on the high seas.

Reviewing any standard charter party, it is striking how many of the rights and obligations concern operations or matters which involve the Master or crew. The contractual framework for carriage of goods will need to change to be fit for the purpose of carriage in unmanned ships. Furthermore, the insurance underpinning the allocation of risk under such contracts will need to adapt.

Certain key terms of charter parties may require amendment; currently it is common for charterers to take the contractual risk of cargo operations. If these are to be done automatically by the ship, the contractual risk of these operations might logically transfer to owners. At first glance, this seems to increase the risk burden on owners. Removing the human element, however, might significantly reduce the risk of error during cargo operations – for example: cargo loss or damage caused by stevedores.

In many respects the rights and obligations within a contract of carriage will remain the same. There will still be, for example, seaworthiness obligations on owners. However, the scope of these obligations and warranties may change.

In a seaworthiness context, it is likely that the new hardware onboard will be covered. Updating the software and maintaining a cyber risk management system will also be included in owners’ obligation. Owners will be expected to implement protocols to ensure that all relevant staff are properly trained and operationally competent in the new technology.

The industry also recognises technical differences between completely autonomous vessels and those controlled remotely from the shore. These differences may feed into the contractual regime that springs up to govern carriage of goods onboard these distinct classes of unmanned ships.

There is also speculation as to whether an unmanned shipping revolution might form part of a more fundamental change in the shipping industry as part of the logistics supply chain. If, for example, cargo owners, logistics companies or tech companies move more comprehensively into ownership of unmanned vessels, the need for contracts of carriage between counterparties at least in some trades might disappear.

The shipping industry is just beginning to explore the potential of unmanned vessels. If this is the future of shipping, the legal and insurance position will need to respond to the precise way in which the technology operates.

In a carriage of goods context, the key contractual considerations are likely to remain broadly the same. Goods will still move from A to B onboard vessels. Parties will still own ships and buy, sell and finance cargoes onboard those ships.

The operational and legal world of carriage of goods will continue to turn. However, for the industry to really capitalise on the opportunities that these developments may bring, the regulatory framework, contractual and insurance aspects of the vessels and their operations must keep pace with the rapidly developing technology.

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