In this section, we make a detailed analysis of the potential of MASS to create value for the different ecosystem actors. This analysis is based on the data obtained through the in-depth interviews discussed in the previous section, as well as on desktop study of online materials where the benefits of MASS are discussed. The categorization is supported by the review of the literature related to the future of MASS, which was introduced earlier in the study.
As discussed earlier in Sect. 2, the operation of MASS can imply different levels of manning onboard, and vessel autonomy, due to the following possibilities: (1) operating vessels remotely from a SCC; (2) allowing vessels to perform only certain functions autonomously; (3) alternating between performing certain functions such as navigation by the crew or by MASS during the same voyage. Since autonomy in this case implies vessel operation independent of human interaction to a varying degree (IMO 2018), we see the need to distinguish the different sources of value creation through MASS and to study how benefits ascribed to MASS can be realized, depending on the levels of onboard manning and actual autonomy. Thus, we distinguish between the following two sources of value creation through MASS: onboard crew reduction and increased ship intelligence. By ‘ship intelligence’ we mean the array of automation and digitalization solutions implemented on vessels that enable autonomous operations, i.e. operations without human intervention. These include, for example, vessel situational awareness, voyage optimization or cargo monitoring systems. The term was coined by one of the leaders in MASS development, Rolls-Royce,Footnote 1 and brought up by Kretschmann et al. (2017) as a source of benefit from autonomous vessels which goes beyond benefits that stem from unmanned vessels. It is important to distinguish between these two sources of value creation because benefits ascribed to MASS, such as the potential for drastically new ship designs, can concern only fully unmanned ships. On the other hand, benefits arising from the availability of new types of data and opportunities for optimizing vessel operations due to digital solutions onboard stem from increasing ship intelligence, which is necessary for autonomous operations but could as well be realized on conventional fully manned ships.
Further, we distinguish among the different categories of value created by MASS. The interview data, as well as the literature review, pointed to several key topics regarding how value can be created by MASS: through cost reductions and operational efficiencies; through increased safety; through increased or novel earning potential; and through enabling system value, which we discuss in detail below. In Table 3, we present the different facets of value creation by MASS, organized by the sources of value and the categories of value. We discuss these categories in more detail in the table.
Cost reductions and operational efficiencies
The most obvious and commonly mentioned benefit of MASS is the potential to drastically decrease crew costs depending on how many crew members or maintenance personnel will be left on board, and how many people are required for operating the vessels from a SCC. Currently, crew salaries can account for up to 45% of total operating costs of a Panamax bulk carrier (Kretschmann et al. 2017), and reduction in crew costs would constitute tangible cost savings for ship operators. MASS can also address the challenge of attracting and training seafarers that ship operators have been recently facing (Björkroth 2020; Ghaderi 2020; Nguyen et al. 2014).
Removing the crew from vessels has also implications for ship design and operations, which, in their turn, can enable other efficiencies. As one interviewee mentioned, the operational decisions during the voyage, regarding the speed or tilt of the vessel, will be different if not accounting for people on board, and the principles of designing ships will change, too. Fully unmanned vessels do not require crew quarters and life support systems, thereby reducing investment costs and enlarging cargo space. Naturally, there will be increased investments in ship intelligence solutions, such as situational awareness and collision detection systems, and other technological tools required for a vessel to be fully unmanned and autonomous. According to another interviewee, new designs are possible with improved air- and hydrodynamics; ships can be lighter and require less ballast water. As a result, MASS can be more fuel-efficient compared with conventional ships, both due to improved design (Kretschmann et al. 2017) and optimal sailing speed profiles enabled by solutions like voyage optimization. Also, since the absence of crew costs on board reduces operational costs at sea, slow steaming becomes more viable, leading to even greater fuel savings (Hogg and Ghosh 2016). According to Rolls-Royce (Mooney 2015), MASS can achieve a 20% reduction in fuel costs. Additionally, removal of crew from the vessels can uncover opportunities for transporting cargo using new routes, such as through the Arctic region (Munim et al. 2021).
The maintenance of MASS will also be affected by the removal of crew-related systems on the ship. However, increased automation will ultimately increase the complexity of the vessels. At the same time, ship intelligence can enable preventive and even predictive maintenance (Tsvetkova et al. 2021a; Lambert et al. 2019), which can reduce maintenance costs in the long term. Another important benefit stemming from increased ship intelligence is the increased transparency of ship operations due to the bigger volumes of recorded data on vessel equipment operation, cargo condition throughout the voyage and detailed logs of the surroundings. The use of these data, if made available to insurers, for investigating the causes of accidents or damages to the vessels and cargo, can ultimately lead to decreased ship and cargo insurance and help mitigate risks in sea transportation (Urciuoli and Hintsa 2020). However, as several interviewees explained to us, current ship and cargo insurance policies need to change in order to benefit from such transparency, which requires changes in how different actors communicate and settle disputes in case of accidents. As an interviewee from a ship operating company explained, often, insurance companies prefer to ensure a good relationship with their client rather than argue about every single claim over cargo damages. Following this, new interfaces will need to be established between insurance companies and such actors as ship systems providers, where the data on equipment performance and causes of its failure can be securely logged and transferred in case of accidents; blockchain technology could come as a great help in this regard.
While increased safety can also be translated in cost reductions, for instance, in terms of reduced insurance fees, we distinguish it as a separate category, because its value is often difficult to measure and different actors in the logistics ecosystem can benefit from it in various ways. As one interviewee put it, in maritime business segments like offshore or passenger transportation, safety is the aspect whose improvement is prioritized over such goals as direct cost savings, as it can be easily compromised. The extent to which the value can be monetized depends on the segment and particular business case. In case of passenger transportation in the Baltic Sea, for example, safety can be seen as the part of the brand value for ship operators. Offshore business and pilotage were mentioned as other examples of sectors where increased crew safety can be extremely valuable for ship operators.
There are also several aspects of how safety can be affected by autonomous operations. First, the safety of the vessel can be improved due to constant and advanced situational awareness brought by ship intelligence and reduction of the crew’s fatigue by taking over routine tasks (Hogg and Ghosh 2016). Second, crew safety is improved due to the mere fact that seafarers are transferred to the shore and are not subject to operating vessels in harsh and dangerous conditions, or being held hostage during pirate attacks (Mooney 2015). Third, the transfer of operational decisions from the crew to the ship is often mentioned to bear the potential of reducing human error (Porathe 2013), particularly due to decreased fatigue (Nguyen et al. 2014), which has been claimed to cause 75–96% of accidents at sea (Rothblum et al. 2002). The latter point appears to be a controversial topic. Several interviewees mentioned that human error leading to disasters like collisions is a commonly used argument for promoting the benefits of safety of MASS. However, the presence of a crew has been crucial for detecting and avoiding such accidents as fires. Furthermore, in case of remotely operated ships, much of the safety risks are transferred to the SCC, necessitating constant monitoring and interpretations of data in order to ensure safe vessel operations (Hogg and Ghosh 2016).
Unmanned ships improve earning potential in several ways. The new opportunities in vessel design due to limited crew accommodation and life support systems, which were discussed earlier, create additional space for carrying cargo (Hogg and Ghosh 2016).
Increased ship intelligence due to digitalization, however, bears a more significant potential for creating new revenue streams by generating data that can be used to establish new business models. As an example, data on cargo condition during the voyage (such as position of cargo within containers or the temperature in a cargo hold), combined with other cargo-related data (such as weight, destination or ID of particular containers), as well as voyage information, can be the basis for providing real-time information on cargo movements, which can be valuable for the shippers and other actors interested in the transparency and visibility of supply chains. The data generated on an intelligent ship give rise to many more opportunities and interfaces, such as the ones related to IoT and automated supply chains, to create larger system value, which is discussed in the next section.
System value enabled by MASS
As discussed above, unmanned vessels have the potential to create value by reducing crew-related costs, which has an effect on ship operating and investment costs. Ship intelligence can be seen as a necessary condition for MASS operations, enabling a whole set of other benefits related to increased situational awareness and improved decision-making during voyages. However, significant benefits lie beyond actual vessel operations, in the integration of MASS in the IoT (Sullivan et al. 2020; de la Peña Zarzuelo et al. 2020), where other smart infrastructures and equipment, such as ports with autonomous mooring and automated loading and unloading, and automated intermodal hubs, are also part of transparent and automatized supply chains.
As one interviewee explained, MASS supported by artificial intelligence (AI) have the potential to remove the inefficiencies in current logistics chains, thereby also reducing the environmental impact of cargo transportation. This stems from the combination of several ‘ship intelligence’ solutions, such as voyage optimization and optimal cargo loading, and digital innovations in other parts of the logistics chain, such as management of truck traffic in ports and multimodal logistics planning. The alignment of these optimization solutions can allow, for example, reduction of ships’ waiting time in port and instead find optimal routes and speed profiles to deliver goods on time.
It is important to note that ships can be ‘intelligent’ without being fully unmanned and autonomous. This view is shared by some leading ship technology suppliers, such as ABB and Wärtsilä, who have been cautious regarding the concept of fully autonomous vessels,Footnote 2 and have instead referred to “Smart Marine”Footnote 3 and “conditionally and periodically unmanned bridge.”Footnote 4 MASS are often seen as a future technology for naval and research applications, while “smart ships” are seen better fit for commercial shipping (Lloyd’s Register 2015). However, the combination of unmanning vessels with increasing ship intelligence can create system value for supply and logistics chains by allowing vessels to be operated flexibly and in real time without accounting for crew on board. As an interviewee suggested, fully autonomous ships can enable not only ‘digital corridors’, but also digital trade, where fully unmanned ships can be treated as ‘floating stocks’ that can be traded in real time and be flexibly redirected to any port. Along similar lines, Kim et al. (2020) see future transportation as a “timely service that allows shippers and customers to instantaneously tailor dispatches and receive deliveries from this autonomous logistics transport chain”. Furthermore, MASS can contribute to establishing new platforms, where digitalization can help leverage business opportunities and to monetize data pertaining to shipping operations (Wright 2020).
Thus, system value enabled by MASS is two-fold. On the one hand, autonomous shipping, integrated in the increasingly digitalized maritime transportation (Tsvetkova et al. 2021b), enables value creation through complementarities among ecosystem actors (Jacobides et al. 2018) such as port operators, freight forwarders and logistics operators. On the other hand, as more MASS are introduced in maritime logistics, it should be possible to achieve network effects (Katz and Shapiro 1985), where the value created by a fleet of MASS will be able to outperform conventional vessels on a new level. According to an interviewee, a fleet of many small-size container MASS can deliver goods from origin to destination economically, replacing the hub-and-spoke networks that rely on mega-size container vessels and feeders. In both cases, system value of MASS has ramifications for supply and logistics chains, which are discussed below.
Finally, it is worthwhile mentioning the additional value that can be created by MASS, which is difficult to categorize according to the topics discussed above. First, the modal shift from road transport to MASS in short-sea shipping (Suárez-Alemán 2016) will bring benefits to society by reducing the environmental impacts of cargo transportation (Munim 2019). An interviewee explained that, to make ship power and the propulsion system more independent, it will be necessary to shift either to cleaner fuels or preferably to electric propulsion. The use of heavy fuel oil (HFO), for example, will be impossible on MASS (Kretschmann et al. 2017).