29 March 2021

Remote-controlled vessels could power British shipbuilding – and avoid another Suez pile-up

By Andrew Dinsmore

For almost a week, a huge container ship has been wedged across the Suez Canal, blocking £7bn worth of goods from passing through this vital trade route every day. It’s a powerful example of how human error in ship navigation can be disastrous, but history is littered with significantly worse instances, like the Titanic in 1912 or the Exxon Valdez in 1989.

Imagine a world where such errors were eradicated, or at least substantially reduced. This could be possible with autonomous unmanned surface vessels (USVs), aka remote-controlled ships, which could be the future of Britain’s shipbuilding industry.

Reversing the decline of British shipbuilding

Ships are central to global trade. Today, 90% of the world trade travels by sea. Shipbuilding ranges from relatively simple bulk-carriers to complex offshore support vessels. Britain’s competitiveness in this important industry has waned over the last 120 years. At the end of the 19th Century, Britain produced 75% of the world’s ships, but by 1913, this had dropped to 60%, and by 1997 it was just 0.7%. Production is now dominated by eastern Asia – by 2019, some 93% of the world’s shipbuilding took place in China, the Republic of Korea and Japan, where labour costs are generally lower. However, Britain has a unique opportunity to re-establish itself as the world-leading shipbuilder once again by focusing on USVs.

The Government’s current strategy to boost shipbuilding in the United Kingdom is twofold: to bring Royal Navy contracts back to the UK, and to increase investment into green shipping technology, like hydrogen or electric powered vessels. These are good first steps in boosting public sector jobs in this industry and developing the UK’s leading position on green technology. However, these measures do not go far enough to boost the private sector in the UK.

At the moment the USV market is fragmented all over the world. Whilst the US has the most companies operating in the field of developing USVs, Europe is expected to show the highest growth rate between 2016 and 2023. The three main European countries involved are France (ECA Group), the UK (ASV) and Germany (Atlas Elektronik), with Atlas Elektronik having the largest European market share,

The future of shipping

The USV industry is in its infancy. Currently they are used for military purposes like maritime border security, mine countermeasures, reconnaissance operations, guarding undersea cables, and search and rescue operations – along with commercial applications like oceanographic research, data mapping and oil and gas research. But in the future it is thought that they could play a key role in the international transport of goods, akin to driverless cars.

Britain’s expertise in drone technology and cyber-security, along with its rich history in and institutional understanding of shipbuilding leaves it well-placed to be a world leader in designing and manufacturing USVs. Britain’s preeminent position in maritime law, marine insurance and regulation also means that it can lead the conversation on how traditional maritime regulation (through the IMO and SOLAS) should be updated to accommodate this exciting new technology.

The US Congress recently commissioned substantial investment into the military application of USVs by awarding a $35m contract to L3 Technologies Inc. (part of the L3Harris Group) for the development of a single Medium Sized Unmanned Surface Vessel prototype. Previously, the US commissioned Boeing to produce five Extra Large Unmanned Undersea Vessels in 2019 and wants to procure two per year starting in 2023 (but the budget does not address 2021 or 2022). The UK should do the same.

There are many advantages to the UK in being a world leader in USVs. It accords with the UK’s outward-looking, global, seafaring brand following Brexit and its recent investment into green shipping technology. It could reinvigorate the UK’s rich shipbuilding history in a way that fits into a 21st century world: where the UK once led the way with technological innovation in steamships, it will now do so with USVs.

There is no obvious country that is better placed to take a lead in this exciting new market. While other countries may have cheaper labour (albeit unclear how much longer that will last), it is not clear that Britain and her allies wish to export such sensitive technology as required by their merchant and naval fleet. It is not difficult to imagine the myriad of dangers that the UK could be exposed to if its merchant and naval fleet were at risk of being hacked by an overseas power.

The market is willing to pay higher prices for such specialised vessels and Britain will be able to compete: the high up-front cost of a USV will be offset by savings from vastly reduced crew numbers and lower rates of accidents during a vessel’s lifetime. USVs will provide both highly skilled jobs (innovation in remote and security technology) and lower-skilled jobs (building the actual body of the ships). These can be located throughout the UK, boosting the Northern Powerhouse, Scotland, Wales and Northern Ireland. This will not only improve the distribution of income throughout the UK but it will also give the UK a reason to stay united: if there is a thriving shipbuilding industry in Scotland, Wales and Northern Ireland which could be lost by breaking up the Union, the argument for doing so weakens.

USVs could also form an integral part of the UK’s coastal Defence and submarine systems, which is especially important given the Government’s recent commitment to reduce the number of personnel in the armed services as part of its ‘Defence in a Competitive Age’ paper.

From a political perspective, championing USVs could attract marginal voters to the Conservative Party by providing jobs and opportunities in former industrial areas like Sunderland. It will contrast with the Labour’s disastrous attempts to save the industry in the 1970s, which only showed the folly of nationalisation.

The USV market represents an exciting opportunity for the UK to combine its rich history with its modern technological pre-eminence to become a world-leading shipbuilder once again, and to upgrade its Naval defence system whilst maintaining lower personnel numbers. Now is the time for Britain to throw open her sails and catch the wind of technological innovation to navigate into the future.

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Andrew Dinsmore is a Shipping & Fraud Barrister at Twenty Essex Chambers.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.