The autonomous-transportation revolution, ushered in by driverless cars, is spreading to the seas and other waterways. Autonomous cargo ships should be setting sail in the not-too-distance future, led by the efforts of U.K.-based engineering giant Rolls-Royce (NASDAQOTH:RYCEY) and others.
The nascent autonomous -- or "robot ghost" -- ship space is on course to grow rapidly over the next decade. Here's what you should know.
The benefits of crewless marine vessels
The two main and related benefits of throwing humans overboard, figuratively speaking, from marine cargo vessels are cost and safety. Vessel operators will be able to reduce personnel expenses and should also realize cost savings associated with accidents and insurance. As with auto accidents, the vast majority of accidents involving marine vessels are caused by human error. Moreover, since fully autonomous cargo vessels won't need to have people on board, they can be redesigned to increase efficiency in other ways.
Shipping is the lifeblood of international trade since, it's often the least costly way to transport large volumes of goods between countries. And autonomous ships promise to make shipping even more cost-effective, which is why companies are eager to adopt crewless ships to transport their goods around the globe. Mining giants BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO), for instance, are looking to adopt autonomous shipping within a decade, according to Bloomberg.
Autonomous ship players leading the way
Rolls-Royce is the big player to watch in this space, as we'll get to in a moment. However, it's a team of two Norwegian companies that looks to be on track to launch the world's first autonomous cargo ship. Agricultural company Yara International and Kongsberg Gruppen, which makes guidance systems, are developing the all-electric Yara Birkeland, which is slated to start in late 2018 transporting fertilizer 37 miles down a fjord (a long, narrow, deep inlet of the sea between cliffs) from a production facility to a port.
As is typical with autonomous cars, the 100-container ship will become autonomous in stages. On its initial test run late next year, it will be fully crewed. In 2019, it will be remotely controlled as it makes the voyage, and in 2020, it should sail and dock itself. The vessel's navigation system will include cameras, radar, and GPS.
The Birkeland will cost $25 million to build, which the Wall Street Journal [subscription required to open link] reports is "about three times as much as a conventional container ship of its size, but its backers say without need for fuel or crew it promises to cut annual operating costs by up to 90%." With operating cost savings of this magnitude, it's easy to see why there's a lot of excitement surrounding autonomous ships.
Rolls-Royce is leading a joint industry project in Finland called Advanced Autonomous Waterborne Applications (AAWA). In addition to leading the project, the company is responsible for system integration and automation control. The team aims to design a proof-of-concept demonstrator for a remote-controlled ship by the end of 2017 and have such a ship in commercial
use in local waters by the end of the decade.
By 2025, Rolls-Royce envisions that a remotely operated vessel will be sailing in international waters. By 2035, the company believes that fully autonomous oceangoing vessels will be plying the seas in abundant numbers.
How to invest in autonomous ships
It's a bit early in the game to predict how to best play the imminent arrival of autonomous ships. There are various ways to invest in this space, including investing in companies that are on the leading edge of developing them, such as Rolls-Royce; investing in companies that make the technology needed for self-piloting, such as sensors and artificial-intelligence tech; and investing in companies that seem poised to be among the early adopters of autonomous shipping. Those early adopters should be able to boost their profits while also passing some of their cost savings on to customers, giving them a leg up on the competitors.