Marine, Energy and Transport

From crewless vessels to misdeclared dangerous cargo, we offer our international experts’ predictions on the opportunities and challenges that the marine, energy and transport market may face in the coming year and beyond.

Marine, Energy and Transport predictions
#1 Will crewless vessels overtake automated vehicles?

The view that fully automated vessels will follow well after automated vehicles (AV) may be changing. While the significant infrastructure required for a reliable AV network is still some way off, and likely to be very costly, the infrastructure for automated vessels will not need to be nearly so extensive. Equally, the remote controlled stage for crewless vessels will potentially allow the transition to fully automated vessels to be quicker than with AVs.  There is also likely to be less disruption for marine insurers and P&I Clubs: liability will remain with the vessel owner, whereas AVs will see a significant shift from driver to product liability. On the regulatory front, a scoping exercise by the International Maritime Organisation is now well advanced, with further guidance expected in 2020.

#2 No easy solution to tackling misdeclared dangerous cargo, but something needs to be done

2019 has seen a worrying number of container ship fires. While there is agreement that the cause is misdeclared dangerous cargo, there is currently no consensus as to how to address it. Some argue for increased inspections/verification before loading, although time, cost and technology are an issue.  Others see the answer in fining shippers of misdeclared cargo, but brass plate shell companies may limit the effect. The International Union of Marine Insurance is focussing on improving fire-fighting systems, which have their own limitations.  Another potential aid is blockchain, which could significantly increase transparency around goods being shipped. All interested parties agree a solution needs to be identified before there are more fatalities.

#3 The solution to reducing damage to sub-sea cables/interconnectors caused by anchors and fishing gear: co-operation or deterrents?

The rapid expansion of offshore wind farms and the development of a transnational electricity grid in the seas around the UK has significantly increased the number of power cables crossing the seabed.  One consequence has been an upsurge in incidents of hugely expensive damage to interconnectors caused by anchors and deep-sea fishing gear.  Co-operation between interested parties, such as agreeing designated corridors for cables and no anchor/trawler zones, helps mitigate incidents.  Nevertheless, rogue fishing vessels will still risk damaging cables to pursue a catch on the basis that their liability for any claim will be limited.  The introduction of fines by the EU/UK government might prove to be a more effective deterrent.

#4 An Australian Perspective: Static risks will blur the lines between property and marine coverage

Increasingly, inland marine insurance is being relied on to address storage, processing, transportation and logistics risks. This means marine insurers are covering static risks, essentially providing property cover when goods that are moving from A to B sit in a warehouse or storage yard for a period of time as part of that journey. This exposes them to risks ranging from fire to insect infestation and can blur the lines between property and marine coverage. In Australia, there are also liability risk exposures for carriers and recovery options against carriers breaking limitation of liability clauses. Similarly, under Australian Consumer Law, carriers have service guarantee responsibilities. It’s likely Australian courts will also test the expansion of consumer rights in this space.

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