Rolls-Royce drone ships challenge $375 billion industry

Bloomberg NewsFebruary 26, 2014 

In an age of aerial drones and driver-less cars, Rolls-Royce Holdings is designing unmanned cargo ships.

Rolls-Royce's Blue Ocean development team has set up a virtual-reality prototype at its office in Alesund, Norway, that simulates 360-degree views from a vessel's bridge. Eventually, the London-based manufacturer of engines and turbines says, captains on dry land will use similar control centers to command hundreds of crewless ships.

Drone ships would be safer, cheaper and less polluting for the $375 billion shipping industry that carries 90 percent of world trade, Rolls-Royce says. They might be deployed in regions such as the Baltic Sea within a decade, while regulatory hurdles and industry and union skepticism about cost and safety will slow global adoption, said Oskar Levander, the company's vice president of innovation in marine engineering and technology.

"Now the technology is at the level where we can make this happen, and society is moving in this direction," Levander said by phone last month. "If we want marine to do this, now is the time to move."

The European Union is funding a $4.8 million study called the Maritime Unmanned Navigation through Intelligence in Networks project. The researchers are preparing the prototype for simulated sea trials to assess the costs and benefits, which will finish next year, said Hans-Christoph Burmeister at the Fraunhofer Center for Mari

time Logistics and Services CML in Hamburg.

Even so, maritime companies, insurers, engineers, labor unions and regulators doubt unmanned ships could be safe and cost-effective any time soon.

While the idea of automated ships was first considered decades ago, Rolls-Royce started developing designs last year. Marine accounts for 16 percent of the company's revenue, data compiled by Bloomberg show. Descended from the luxury car brand now operated by Bayerische Motoren Werke AG, Rolls-Royce also makes plane engines and turbines.

The company's schematics show vessels loaded with containers from front to back, without the bridge structure where the crew lives. By replacing the bridge -- along with the other systems that support the crew, such as electricity, air conditioning, water and sewage -- with more cargo, ships can cut costs and boost revenue, Levander said. The ships would be 5 percent lighter before loading cargo and would burn 12 percent to 15 percent less fuel, he said.

Crew costs of $3,299 a day account for about 44 percent of total operating expenses for a large container ship, according to Moore Stephens LLP, an industry accountant and consultant.

The potential savings don't justify the investments that would be needed to make unmanned ships safe, said Tor Svensen, chief executive officer of maritime for DNV GL, the largest company certifying vessels for safety standards.

While each company can develop its own standards, the International Association of Classification Societies in London hasn't developed unified guidelines for unmanned ships, Secretary Derek Hodgson said.

"Can you imagine what it would be like with an unmanned vessel with cargo on board trading on the open seas? You get in enough trouble with crew on board," Hodgson said by phone Jan. 7. "There are an enormous number of hoops for it to go through before it even got onto the drawing board."

Unmanned ships are currently illegal under international conventions that set minimum crew requirements, said Simon Bennett, a spokesman for the London-based International Chamber of Shipping, an industry association representing more than 80 percent of the global fleet. The organization isn't seriously considering the issue, he said by phone Feb. 6.

The country where a ship is registered is responsible for regulating vessels within its own waters and for enforcing international rules, said Natasha Brown, a spokeswoman for the International Maritime Organization, the United Nations agency in London that has overseen global shipping for almost 70 years.

The IMO hasn't received any proposals on unmanned, remote- controlled ships, she said in a Feb. 6 e-mail. IMO regulations apply to seagoing vessels trading internationally and exceeding 500 gross tons, except warships and fishing boats.

As long as drone ships don't comply with IMO rules, they would be considered unseaworthy and ineligible for insurance, according to Andrew Bardot, secretary and executive officer of the London-based International Group of P&I Clubs, whose 13 members cover 90 percent of the global fleet.

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