Digital Transformation of the Maritime Industry

Almost any aspect of the maritime sector is currently undergoing far reaching changes at unprecedented pace:

  • Digital transformation is rapidly changing the way, shipments are controlled and supply chains are managed. Blockchains and other technologies definitely have entered the marine transport sector with players from different industries combining efforts to promote standardized and working solutions.
  • The operation of vessels more and more relies on digitisation at different levels, from IoT supported route and resource planning to crewless ships and unmanned vessels. Prototypes of unmanned vessels are already tested in practice.
  • Not only design and manufacturing of vessels become more and more digital. The same is true for maintenance as sensors support predictive maintenance and unmanned systems allow for supported repair handling.
  • Training, education and management of workforce have undergone rapid changes with IT-based solutions entering larger parts of the market. Additional services have developed around the industry, from tracking of shipments to IT-based customs handling and certificate management.
  • With digital transformation of the sector also the need for stable, reliant and high-speed infrastructures is growing, allowing for real-time exchange of data.

The changes and challenges facing the maritime sector are closely watched by the industry, although it seems that – similar to other industries – there are some early adopters and others that adopt innovation at far slower pace. And, also governments have expressed interest in driving digital innovation in the maritime sector. E.g. the German Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Transport and Digital Infrastructure have co-signed a declaration on digitisation within the maritime industry stating that

“New development and production procedures and new ways of operating facilities, ships and ports are likely to lead to a considerable increase in efficiency. At the same time, companies need to make their production, logistics and control processes more efficient so that they can continue to face up to competitors from around the world. In addition to this, digitisation helps to more effectively protect marine environments and meet our climate mitigation targets in new and innovative ways.”

Legal challenges in digitisation of the maritime sector are partly pretty similar to digital transformation in other sectors and include, for example:

  • Regulatory Issues: Shipping in many aspects is a highly regulated international market. With new, challenging business models and with new technologies and concepts to address specific tasks, regulatory issues often become important. Typical questions and concerns include (i) whether a rollout of a specific technology or business model will be permissible, (ii) what changes to business models or technologies may be required to comply with existing regulations, and (iii) where changes in law may be expected;
  • Data Use and Data Ownership: Data have become increasingly important for the provision of services, e.g. in case of predictive maintenance services, usage tracking, route planning, resource planning and other additional services (for further information see also Ship-Specific Data Collection and Digital Vessel Fleet-Management). Also, the various stakeholders often have interests in not disclosing specific data to other parties in the sector (e.g. service providers or spare part suppliers). At the same time data ownership is often unclear. Therefore, for data heavy services and business models, and for data for which the company has a huge interest in confidentiality, a thorough legal evaluation of the data flows is often a key aspect.
  • (Cyber-)Security: Safety and Security have been a huge issue in the maritime industry for decades. With more and more IT-heavy processes being added and vessels, containers etc. becoming connected, new areas of security are added. Security, in particular, gets a new layer of “cyber security”, aiming to protect unauthorized third parties from obtaining access through existing interfaces and network connectivity to relevant sensors and controllers. The application of existing safety and security regulations and changes in relevant laws are often a challenge.
  • Liability: With handing over more and more tasks to automated systems, an appropriate allocation of risks and liability between the various parties involved becomes increasingly important.

Besides these “classical” challenges in digital transformation there are, of course, additional, sector specific issues to be taken into consideration, in particular challenges following from the internationality of this sector, for example:

  • International laws: Shipping is regulated by various international laws and conventions (e.g. UNCLOS, SOLAS, COLREG, MARPOL), which may have an impact on the permissibility of specific technologies, e.g. on unmanned vehicles.
  • International trade and customs handling: Transport by sea is truly international. Developing e.g. new processes in shipping of goods (e.g. blockchain based processing) need to fit into processes of customs handling, international taxation etc.

Digital transformation significantly changes the maritime industry. Unmanned vessels, predictive maintenance or digital vessel-fleet management are only a few developments within the industry spectrum. Besides the usages of the new technologies, the maritime sector also faces new legal challenges.