A BROADER VIEW

THE FUTURE
OF SHIPPING

SAFER, SMARTER, GREENER

ACKNOWLEDGEMENTS

Project Director
Trond Hodne

Lead Authors
Tore Longva, Per Holmvang, Vebjrn J. Guttormsen

Authors
Nippin Anand, Ocane Balland, Andreas Brandster,
Christos Chryssakis, Dariusz Dabrowski, Eivind Dale,
George Dimopoulos, Magnus Strandmyr Eide, Atle Ellefsen,
Chara Georgopoulou, Etienne Gernez, Audun Grimstad,
Sondre Henningsgrd, Nikolaos Kakalis, Sastry Yagnanna Kandukuri,
Eskil V. Kjemperud, Knut Erik Knutsen, Martin Lgstad,
Gabriele Manno, Philippe Noury, Tore Relling, Shinta Y. Rotty,
Rolf Skjong, Linda Stavland, Jason Stefanatos, Kay Erik Stokke,
Hans Anton Tvete, Alexander Wardwell, Jan Weitzenbck,
David Wendel, William Wright, Alexandros Zymaris, Kjersti Aalbu

This initiative is a collaboration between DNV GL and Xynto,

an advisory firm that works with global companies on projects that
enable businesses to grow in a new way, fit for the climate, resource
and demographic realities of the 21st century. www.xynteo.com

Suggested reference:
DNV GL: The Future of Shipping, Hvik, 2014

Photography: iStock.com
Foreword from Henrik O. Madsen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A broader view . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SUSTAINABLE SHIPPING THE CHALLENGE ............................................ 12

GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY . . . . . . . . . . . . . . . . . . . . . 20
World population and economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Information and communication technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Climate change and environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

PATHWAYS TOWARDS SAFER,

SMARTER AND GREENER SHIPPING .............................................................. 40
Safe operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Advanced ship design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
The connected ship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Future materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Eficient shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Low carbon energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

THE WAY FORWARD SHIPPING TOWARDS 2050 ....................... 102

References ................................................................................................................................... 110
4 THE FUTURE OF SHIPPING

MANAGING RISK,
BUILDING TRUST
DNV GLS PAST, PRESENT AND FUTURE

One hundred and ifty years ago, the world was in the midst of a profound transition.
New technologies such as steam power, electricity and the telegraph led to an explosion
in productivity and connectivity, reshaping the global economy in just a few short
decades. Yet these shifts also introduced new risks to life, property and the environment
and transformed the relationship between technology, business and society.

It was this context into which Det Norske Veritas and
Germanischer Lloyd were born. These companies,
which have now merged into DNV GL, took on the
role of verifying that vessels were seaworthy during a
time when the convergence of new technology and
business models caused an unacceptable number
of ship accidents. By managing the increasingly
complex risks associated with the rapidly evolving
maritime sector, classiication societies built trust
among shipping stakeholders, contributing to the
birth of a new era in international trade.
Today, as DNV GL celebrates our 150th anniversary
and our irst year as a united company, the world
is at another inlection point. The technologies,
systems and institutions that have driven the most
prolonged period of growth in our civilisations
history are being tested by the new demands of the
21st century. And once again, our ability to manage
risk and build trust will help us enable the changes
the world needs.
5
In order to rise to this challenge, we have been
exploring six themes of strategic relevance to our
new organisation. Some of the themes, such as
climate change adaptation, have taken us into newer
territory; others, such as the future of shipping, have
seen us re-evaluate more familiar ground. I believe
that all of them, however, are absolutely central to
our efforts to empower our customers and society
to become safer, smarter and greener.
I hope that we can use the themes indings, as well
as the momentum of 2014, to engage a wide range
of stakeholders in a forward-leaning discussion
about how to achieve our vision global impact for
a safe and sustainable future.
I look forward to the journey ahead.
Henrik O. Madsen
6 THE FUTURE OF SHIPPING

A BROADER VIEW
THEMES FOR THE FUTURE
As DNV GL turns 150, we are exploring six themes for the future areas where we can leverage our
history and expertise to translate our vision into impact. We selected these themes as part of our efforts
to take a broader view of the relationship between technology, business and society. On these pages
you will ind short introductions to each theme. To ind out more, join us at: dnvgl.com.

A SAFE AND FROM TECHNOLOGY

SUSTAINABLE FUTURE TO TRANSFORMATION

The future is not what it used to be. Rising global
temperatures, diminishing natural resources and
deepening inequality threaten everyones prospects,
including those yet to be born. Yet alongside these
new global challenges are new innovations, solutions
and opportunities that make a safe and sustainable
future possible: a world where nine billion people can
thrive while living within the environmental limits of
the planet. In this theme, we set a vision towards this
future. We analyse the barriers to change and detail the
concrete actions that governments, business and civil
society must take together if the obstacles are to be
overcome and the opportunities for safer, smarter and
greener growth are to be seized.
Technology has always been an enabler of societal
change and we can expect that it will play a pivotal
role in our transition to a safe and sustainable future.
Indeed, existing technology is already unlocking safer,
smarter, greener solutions for powering our economy,
transporting our goods, caring for our sick and feeding
our growing population. But history shows that trans-
formative technologies from the automobile to the
internet can take decades to reach scale. And time is
one resource we do not have. How can we accelerate
the deployment and commercialisation of sustainable
technologies while ensuring that they are introduced
safely into society? In this theme, we investigate this
question, analysing the barriers to technological
uptake and providing insights from past and present
technologies.
 7

THE FUTURE OF SHIPPING

Shipping is the lifeblood of our economy and the lowest-carbon mode of transport available to a
world with ever-rising consumption. It therefore has a crucial part to play in underpinning the shift to
a safe and sustainable economy. But the industry faces a challenging climate: more intense public
scrutiny of safety and security, tightening restrictions on environmental impacts and huge eficiency
gains due to the revolution in digital technology. In anticipation of these transitions, we have
analysed six technology pathways that can contribute to making the shipping industry safer, smarter
and greener. Through the solutions we identify, we believe it is possible by 2050 to cut ship fatalities
90 per cent and reduce the sectors carbon dioxide emissions by 60 per cent, all without increasing
costs.

ELECTRIFYING THE FUTURE

Electricity has already revolutionised the way we power our operations, fuel our vehicles, and
light and heat our buildings and it will have an even bigger role to play in the decades to come.
Many emerging technologies can provide cleaner, smarter, affordable and reliable energy.
Floating offshore wind can provide emissions-free power at scale by 2050. And a suite of smart
grid technologies will provide households and communities with leaner, more local power. In this
theme, we take a closer look at these technologies, and examine the contributions they can make
to providing low-carbon power to future generations.

ARCTIC THE NEXT RISK FRONTIER

The Arctic offers a preview of a new paradigm for business: harsher environments, higher
public scrutiny and a greater need to engage with stakeholders. As industries enter the Arctic,
understanding, communicating and managing risks will be essential both to earning social license
to operate and minimising the impacts of their activities. With such high stakes, the Arctic will be a
deining frontier not just of operations, but of safer, smarter, greener technologies and standards.
The Arctic is rich with resources and dilemmas. And while there are no easy answers to these
dilemmas, we must tackle questions about its development step by step, based on a common
understanding of the risks. In this theme, we examine the complex Arctic risk picture and explore
its implications for shipping, oil and gas, and oil spill response.

ADAPTATION TO A CHANGING CLIMATE

Climate change mitigation remains essential for our work to build a safe and sustainable future.
But the greenhouse gases that have accumulated in the atmosphere over the past century and
a half have already set changes in motion. Infrastructure and communities around the world
urgently need to adapt to a climate characterised by more frequent and more severe storms,
droughts and loods. And given the interdependence between business and society, business has
a strong interest and critical role to play in these efforts. In this theme we have been developing
tools to help both businesses and communities adapt to this new risk reality: a web-based
platform for sharing information and best practices; a risk-based framework to help decision-
makers prioritise their adaptation investments; and a new protocol to equip leaders to measure
and manage community resilience to climate change.
8 THE FUTURE OF SHIPPING
EXECUTIVE
SUMMARY
The purpose of this report is to look into the future of
shipping and preview the technologies, systems and
practices that we believe will play a role in achieving
a worthwhile ambition: to create a truly sustainable
shipping industry by 2050.
The shipping industry moves about 80 per cent of
world trade volume, making it an integral part of the
global economy. Shipping is an extremely eficient
mode of transport and has steadily improved safety
and environmental performance over the past
few decades. However, there are still signiicant
challenges ahead.
In this report, we focus on three key sustainability
challenges for the shipping industry and establish
ambitions for the future. These ambitions are based
on internationally recognised climate targets and
current best safety practice in land based industries:
Lives lost at sea reduce fatality rates
90 per cent below present levels
CO2 emissions reduce leet CO2 emissions
60 per cent below present levels
Freight cost maintain or reduce
present freight cost levels
In our view, achieving these ambitions will have the
most profound impact on sustainability, and will
help clarify what the industry must do to achieve
sustainable shipping.
Ambition: Reduce fatality rates by
90 per cent below present levels
Achieving this target will require a new safety
mindset and continuous focus on multiple issues
related to technologies and how organisations are
structured and function . Building a robust safety
culture where humans, organisations and regulators
systematically gather information and learn from
failures will be critical to achieving a 90 per cent
reduction in fatalities.
Today, more and more systems are controlled
and integrated by software, which introduces new
challenges for operations, maintenance, testing
and veriication a trend likely to continue. At the
same time, advances in digital technology will play
a greater role in the design phase, allowing for
more accurate modelling of hull forms. The further
development of automated systems and advanced
decision support tools will contribute signiicantly to
on-board safety.
In the subsea industry, remote operations are already
a reality. Systems with proven marine applications are
likely to be adopted by merchant shipping. In time,
the development of fully automated, unmanned
vessels could become reality. Combined with
advances in materials requiring limited maintenance,
autonomous shipping would eliminate occupational
risks on-board. While the unmanned vessel concept
would likely face signiicant public scepticism,

we believe that many on-board systems will be
autonomous, which will improve the industrys safety
performance.
Ambition: Reduce fleet CO2 emissions
60 per cent below present levels
Currently, no single solution can ensure the industry
achieves a 60 per cent reduction of CO2 emissions,
especially considering the expected increase in
transport demand. Energy eficiency is certainly part
of the solution, but the target cannot be reached
unless the industry shifts to low carbon solutions.
We are entering the age of alternative fuels. The irst
stage will see more vessels powered by LNG,
a process driven by high oil prices and regulations on
NOx and SOx. Over time, other low-carbon solutions,
such as ship electriication, biofuels, batteries and
fuel cells powered by renewable energy sources will
be adopted, increasing the diversity of the industrys
fuel mix. The technologies are there, but the barriers
are signiicant the lack of adequate infrastructure
and security of energy supply act as a drag on
development of a number of alternative fuels.
Ambition: Maintain or reduce
present freight cost levels
The future holds tremendous opportunities
for companies able to take advantage of new
technologies and develop competitive business
models. To capture potentials to reduce costs and
increase reliability that the industry must get smarter.
Owners will have to increase investment in systems
to enhance safety and reduce emissions, but by
applying technologies and solutions to become
more eficient, they can keep freight costs at present
levels. Increased connectivity has already changed
the shipping industry.
With more ships connected to the internet via
broadband satellite networks, and more on-board
9
systems connected to each other and the internet,
merchant shipping is becoming a more data-centric
industry. Increasingly, on-board systems are being
integrated, automated and controlled through
software.
Communications and data analysis can improve
logistics operations with a focus on the total value
chain. More powerful computers will be able to
model realistic conditions a vessel may face at sea
and in different weather conditions, and be used to
design more optimal hull and machinery systems.
Advances in sensor technology will enable improved
condition-based monitoring and maintenance
procedures and allow owners to run remote
diagnostics and, when necessary, recommend ixes.
The way forward
Three forces are acting on the shipping industry
to drive change: increased regulations, which set
more stringent minimum safety and environmental
performance requirements; competitive pressure,
which encourages more cost-eficient operations;
and public demand for more transparency and
sustainability. This societal pressure is not only
directed at government authorities and ship owners,
but also at cargo owners, who are under increased
pressure to do business with owners who operate
vessels beyond compliance.
Regulations will continue to be an important driver
for sustainability in three critical areas: safety,
eficiency and the environment. However, regulators
should be sensitive to the inancial impact of these
requirements and work with the industry to ind
workable solutions. As we gain more knowledge
about the impact of shipping on the environment,
the industry will be in a better position to evaluate
various regulatory solutions that both create value for
society and provide a level playing ield for various
segments and companies.
10 THE FUTURE OF SHIPPING

INTRODUCTION
The purpose of this report is to look into the future of
shipping and preview the technologies, systems and
practices that we believe will play a role in achieving
a worthwhile ambition: to create a truly sustainable
shipping industry by 2050.
To frame this challenge, we had to consider a
number of dificult questions, namely: Where is
the shipping industry heading now, given current
developments and trends? What targets should the
industry set for itself in the years ahead? What are
the gaps between the industrys current path and
a more sustainable future, and what can be done to
close these gaps?
Answering these questions requires that we not
only identify likely drivers and barriers to change,
but suggest a number of solutions to improve
sustainability. We have identiied a broad range
of available and future technologies and deined
the work that needs to be done to develop these
technologies further. The result is a report that
challenges existing formats. Unlike many forward-
looking studies that start with a set of assumptions
and then offer different future scenarios, we have
instead chosen to broaden our focus to include
not only the likely outcomes, but also possible and
preferable ones.
At the same time, we have limited our scope to the
design and operations of commercial ships, and did
not include sections devoted to shipbuilding and
ship recycling both critically important segments
that also must adapt to a changing world. While
these and other industry stakeholders (e.g. suppliers,
cargo owners and regulators) will be impacted
by the changes described in this report, our focus
remains on the merchant leet.
11
As such, this report should not be confused with an
industry forecast we recognise that it is impossible
to predict how the world, or the shipping industry,
will change by 2050. Rather, we hope this report will
be a catalyst for dialogue and a challenge to the
industry to pursue ambitious goals.
This report explores the following topics:
Our deinition of sustainable shipping, indicators
that we can use to measure our progress, and
concrete ambitions for 2050
An overview of global-, macro-economic and
environmental trends, and potential game-
changers that could impact shipping in the
next four decades
Descriptions of six technology pathways likely
to play a role in achieving sustainability
Proiles of trends, drivers and barriers, and
how these forces will shape shippings future,
and impact the industrys ability to reach the
sustainability ambitions.
We hope this report will encourage owners to
embrace new technologies and inspire various
industry stakeholders to think in a new way about
how an old industry, steeped in tradition, can adapt
to a rapidly changing world. Change begins with
conversation, and DNV GL looks forward to being an
active participant in the dialogue to achieve a more
sustainable industry.
12 THE FUTURE OF SHIPPING

SUSTAINABLE
SHIPPING
THE CHALLENGE
 SUSTAINABLE SHIPPING THE CHALLENGE 13

Shutterstock

The shipping industry moves about 80 per cent of world trade by volume, making it
an integral part of the global economy. And with the world leet expected to expand
to keep pace with global economic development, the shipping industry will be under
increasing pressure to improve its safety and environmental performance. Even
as marine transportation is recognised as the most eficient way to move goods,
the shipping industry must balance its vital role as an enabler of global trade and
prosperity with its obligation to contribute to a more sustainable future.
14 THE FUTURE OF SHIPPING
"...the shipping industry must balance its vital role as an enabler of global trade and prosperity
with its obligation to contribute to a sustainable future"
What does a sustainable future mean?
Sustainability is commonly deined by three
interdependent dimensions: the environment,
society and economy. Environmental sustainability
supports the social and economic conditions by
which humans can live in productive harmony with
nature to meet the needs of present and future
generations.
Social sustainability refers to the ability of a social
system (such as a nation or state) to effectively serve
the needs and provide for the safety of a group of
individuals. The sustainability of a social system can
be determined by how effectively it provides access
to basic human needs, such as stability, social equity
and security, among others.
For the shipping industry, safety is a critical part
of social sustainability. The International Maritime
Organization (IMO) deines safety as: The absence
of unacceptable levels of risk to life, limb and health
(from non-wilful acts).
Economic sustainability is measured by how well
a system allocates resources in a way that beneits
society in the short and long term. According
to the World Business Council for Sustainable
Development, economic sustainability is deined as
an economy where economic growth has been
de-coupled from ecosystem destruction and material
consumption, and re-coupled with sustainable
economic development and societal well-being.
The sustainability challenge
Sustainability in the shipping industry has steadily
improved over the years. Moving goods on ships
is highly eficient; the industry has signiicantly
increased safety at sea; and environmental
performance is starting to improve with new
regulations in place. However, despite signiicant
improvements in safety, working on a vessel remains
a dangerous occupation. Also, ships often operate
in sensitive ecological zones and most load and
unload cargo in proximity to densely populated
costal urban centres, contributing to a variety of
atmospheric and oceanic environmental damage.
These issues are currently being managed by
various regulatory bodies, including the IMO,
which recently presented a model for a sustainable
maritime transportation concept that outlined
goals and actions the industry can undertake to
provide safe, eficient and environmentally friendly
transport systems. Some industry players have taken
the initiative to improve safety and environmental
performance beyond compliance by investing in a
broad range of innovative systems and technologies.
However, with the expected increase in global
shipping in the next four decades, it is clear that
more work needs to be done.
Measuring sustainability
In order to measure the level of sustainability,
we have selected a list of key indicators to track
shippings progress towards becoming a more
sustainable industrial sector. The selected indicators
present the most relevant challenges for shipping
within the three sustainability dimensions.
It should be noted that the indicators listed do not
relect all of the environmental, social and economic
aspects of shipping. The selected environmental
indicators relect only the most important challenges
we recognise today. Over the next decades, we may
identify other pollutants that represent a signiicant
threat to the environment. Likewise, this report does
not examine shipbuilding and ship recycling both
critically important parts of the value chain that also
must adapt to a changing world.
However, by focusing on key indicators relevant to
the way the world leet operates, we can provide an
overview of how shipping impacts environmental,
social and economic sustainability.
SUSTAINABLE SHIPPING THE CHALLENGE 15

DNV-GL
16 THE FUTURE OF SHIPPING

SUSTAINABILITY
INDICATORS
CURRENT STATUS FOR SHIPPING

Sources: Buhaug, ., Corbett, J. J., Endresen, ., Eyring, V., Faber, J., Hanayama, S., Lee, D. S., Lee, D., Lindstad, H., Markowska, A. Z.,
Mjelde, A., Nelissen, D., Nilsen, J., Plsson, C., Winebrake, J. J., Wu, W.-Q. And Yoshida, K., 2009, Second IMO GHG Study 2009, International
Maritime Organization (IMO) London, UK, April 2009. Ballast water: http://www.emsa.europa.eu/implementation-tasks/environment/
ballast-water.html. A similar number is assumed for organism carrier outside the hull: John M. Drake and David M. Lodge: Aquatic
Invasions (2007) Volume 2, Issue 2: 121-131, doi: http://dx.doi.org/10.3391/ai.2007.2.2.7. The International Tanker Owners Pollution
Federation ltd. Statistics, http://www.itopf.com/information-services/data-and-statistics/statistics/ Updated 2013 Ecorys: The Ship
Recycling Fund, Financing environmentally sound scrapping and recycling of sea-going ships, 2005. IHS Fairplay World Casualty Statistics:
Includes all vessels excluding ishing and miscellaneous ships. Average for the period between 2003 and 2012 is used. Freight cost: Review
of Maritime Transport, 2012, UNCTAD. Insurance claim: 2012 CEFOR Annual Report, CEFOR Covering about 20% of the world leet.

Accidental Recycling Invasive species

oil spills

5000
tonnes per year
90% 20 000
of the ship recycled marine organisms
Average 2010 2012 introduced per day
 SUSTAINABLE SHIPPING THE CHALLENGE 17

CO2 NOx SOx

emissions emissions emissions

900
million tonnes
22
million tonnes
12
million tonnes
per year per year
per year

Lives lost Insurance Freight

at sea claim costs cost

900 0.23% 7-11%

ship accident fatalities per year of insured value of cargo value
Average 2003 2012 Average 2010 2012
18 THE FUTURE OF SHIPPING
FUTURE
AMBITIONS
FOR SUSTAINABLE SHIPPING
Shipping is an extremely eficient mode of
transport and has steadily improved safety
and environmental performance. Because the
industry is already taking action to address SOx
and NOx emissions and put in place legislation
to manage the introduction of alien species,
these topics will not be directly addressed
in this report. Instead, we focus on three key
sustainability challenges for the shipping
industry, and establish ambitions for 2050.
These ambitions are based on internationally
recognised climate targets and current best
safety practice in land based industries:
Lives lost at sea - reduce fatality
rates 90 per cent below present levels
CO2 emissions - reduce fleet CO2 emissions
60 per cent below present levels
Freight cost - maintain or reduce
present freight cost levels
In our view, meeting these ambitions will have the
most profound impact on sustainability, and will
help clarify what the industry must do to achieve
sustainable shipping.
LIVES LOST AT SEA
90%
below present levels
STATUS
Lives lost at sea include fatalities due to ship
and occupational accidents in international
shipping. Based on statistics from IHS Fairplay
for the period 2003-2012, there were on
average 900 crew and passenger fatalities per
year, corresponding to 1.6 crew fatalities per
100 ship-years. In addition, several studies
report that the number of fatalities due to
occupational accidents is approximately the
same as for ship-related accidents. Based on
available data, we estimate that about six crew
fatalities occur per 100 million work hours.
AMBITION
Reduce fatality rates 90 per cent
below present levels
The current crew fatality rate in shipping is
10 times higher than for industry workers in
OECD countries (Organisation for Economic
Co-operation and Development), which is 0.6
fatalities per 100 million work hours. Seafarers
have the right to a safe workplace and
passengers have a right to safe transportation.
The shipping industry should set targets to
achieve parity with safety levels in land-based
industries by 2050.

CO2 EMISSIONS
60%
below present levels
STATUS
Shipping is responsible for approximately three
per cent of total anthropogenic (manmade)
CO2 emissions, or about 900 million tonnes
per year in 2008, according to the International
Maritime Organisation. Most scenarios for
shipping towards 2050 predict signiicant
growth in the demand for seaborne trade and a
corresponding growth in the world leet, which
is likely to generate more CO2 emissions.
AMBITION
Reduce fleet CO2 emissions 60 per cent
below present levels
Reductions in shippings contribution to
global CO2 emissions must be seen in the
context of global warming. If the global target
is to limit global temperature increase to
2C, then the shipping industry must reduce
emissions by the same share (calculated at 60
per cent, according to the UN Environmental
Programme) as other industrial segments. With
the expected growth in transport demand,
shipping must cut emissions per transported
unit by 80 per cent in 2050, to achieve
emissions at least 60 per cent below present
levels.
SUSTAINABLE SHIPPING THE CHALLENGE 19
FREIGHT COST
Maintain
present levels
STATUS
Over the past decades, shipping freight
costs have steadily declined, relative to the
value of goods shipped. The United Nations
Conference on Trade and Development
(UNCTAD) recently reported that freight
costs are down to seven per cent (relative
to the value of goods) for developed
countries and down to eight to 11 per cent
for developing countries. This indicator varies
widely depending on transport distance,
volume and the value of goods. For example,
although economy of scale is one of the big
advantages of shipping as a mode of transport,
this advantage cannot be fully exploited in
all regions due to the lack of land-to-shore
infrastructure and low trade volumes.
AMBITION
Maintain or reduce present freight cost
levels (as a percentage of the value of
goods)
This indicator is provided to ensure that
improving safety performance and reducing
CO2 emissions do not signiicantly increase
freight cost. The shipping industry facilitates
global trade and development and is therefore
an important part of a sustainable future.
Using cleaner and more expensive fuels and
other technologies may increase cost, but
competition and proitability will continue to be
powerful drivers for cost reduction in shipping.
20 THE FUTURE OF SHIPPING

GLOBAL TRENDS
SHAPING THE SHIPPING INDUSTRY
 GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 21

Shutterstock

Over the next four decades, we believe developments in the following four areas will
signiicantly impact the shipping industry: world population and economy, information
and communications technology, energy, and climate change and the environment. Within
each of these areas, we will describe speciic trends and possible game-changers likely
to inluence the development of the shipping industry. Game-changers are notoriously
hard to predict, but by analysing dramatic changes in the past, we can gain a better
understanding of their nature.
22 THE FUTURE OF SHIPPING

WORLD POPULATION
AND ECONOMY
World population and the global economy are projected to expand rapidly in the
next four decades. While this growth will be uneven across countries and the risks
and opportunities for different shipping segments will vary, these macro-economic
and demographic changes are likely to have a dramatic effect on global trade lows
and the direction and structure of the shipping industry.

Exceeding nine billion people
The world economy is projected to grow at around
three per cent per year on average to 2050, doubling
in size by 2030 and nearly doubling again by 2050.
At the same time, the global population is expected
to exceed nine billion in 2050. While the population
in more developed regions is expected to remain
stable, the population of todays developing
countries is projected to increase from 5.7 billion
in 2011 to eight billion in 2050. At present, the
population of the 48 least developed countries is the
fastest growing in the world at 2.5 per cent per year.
The global population will age
Assuming that global fertility rates continue to
decline, the median age of most countries is
expected to rise, except for countries in Sub-Saharan
Africa. The population aged 60 or over is growing
rapidly in both developed and developing regions.
Globally, the number of individuals aged 60 or over
will increase from 784 million in 2011 to 2 billion
in 2050. By 2050, the number of older people in
developed countries will be almost twice the number
of children. Mismanagement of this changing
demographic represents a signiicant risk to long-
term economic growth in developed countries with
ageing populations.
Urbanisation and mega-regions
Population growth is very much an urban
phenomenon. Indeed, urban areas are expected to
absorb almost all population growth, especially in
less developed regions. By some estimates, 67 per
cent of the worlds population will be concentrated

in urban centres by 2050. If so, the worlds urban
population is expected to grow from 3.6 billion
in 2011 to 6.3 billion in 2050. Today, there are 23
megacities of 10 million or more inhabitants. By
2025, it is projected that there will be 37 megacities,
accounting for 13.6 per cent of the worlds urban
population.
Global growth will be powered
by emerging markets
Towards 2050 there will be signiicant changes in
the relative size of economies. Emerging economies
are expected to grow at a faster pace than advanced
economies, and will sustain global growth. A large
portion of global growth will take place in Asia.
China is expected to surpass the US as the largest
economic power a few years before 2030. In 2050,
China, India, Indonesia, Japan, Republic of Korea,
Malaysia and Thailand are projected to account for 90
per cent of Asian GDP and 45 per cent of global GDP.
However, a study commissioned by the Asian
Development Bank cautions that Asias rise is not
inevitable. Risks related to income inequality, social
and political instability and the middleincome trap
(a condition where a country lags behind advanced
economies capable of producing high value goods
but is unable to successfully compete against low-
cost export countries), may disrupt future economic
development and growth.
A shift in the geography of global consumption
For the irst time in history, a majority of the world's
population will not be impoverished by 2050. Almost
three billion people, more than 40 per cent of
todays population, will join the middle class by 2050,
GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 23
and almost all will live in regions now classiied as
emerging markets.
As has occurred in developed countries, these
economies will transition away from export
oriented/manufacturing heavy growth towards
customer driven/service sector growth. A new class
of emerging consumers will revolutionise global
demand, acting as an internal growth engine.
Initially, these consumers will seek more affordable
manufactured goods, often produced by other
emerging markets.
As a result, trade between emerging markets
is expected to grow rapidly. At the same time,
improved living standards often result in demand
for better environmental protection, safer labour
conditions, and a higher level of transparency in
how government operates.
Inequality will persist
The gap in living standards between emerging
markets and advanced economies will narrow, but
large cross-country differences will still persist. The
average income per capita will still be considerably
higher in advanced economies than those found in
emerging economies.
Assuming growth follows a predictable path, China
will see more than a seven-fold increase in per capita
income over the coming half century. However,
living standards in China will still only be 60 per cent
of that in the leading countries in 2060. India will
experience similar growth, but its per capita income
will only be about 25 per cent of that in advanced
countries. Inequality will also still be a signiicant
issue within countries.
24 THE FUTURE OF SHIPPING

Africa Latin America and the Caribbean Europe

Asia Northern America Oceania

3 500 000

3 000 000
Population (thousands)

2 500 000

2 000 000

1 500 000

1 000 000

500 000

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Figure 1. Urban population by major regions: 1950 - 2050

Source: United Nations, Department of Economic and Social Affairs, Population Division (2012).
World Urbanization Prospects: The 2011 Revison

India USA China EU (27)

29
28
27 Window
of economic
26 opportunity

25
Percent of total population

24
23
22
21
20
19
18
17
16
15
14
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100

Figure 2. "Most active" population age 20-34 years.

Source: United Nations, Department of Economic and Social Affairs, Population Division (2011).
World Population Prospects: The 2010 Revision, Volume II: Demographic proiles. ST/ESA/SER.A/317.

Implications for shipping
Demand for seaborne transport
Population and economic growth increases demand
for seaborne transport. Towards 2050, demand for
energy will increase deep-sea transport of LNG,
crude oil and coal. Growing industrial capacity will
demand increasing volumes of input materials, such
as iron ore and bauxite. A larger global middle class
will increase demand for food-stuffs and consumer
goods and create demand for passenger ferries
and cruise ships, as spending on leisure and travel
increases.
Changing trade patterns
Changes in the global economy and demographics
will continue to inluence trade patterns in deep-sea
and coastal shipping including growing intra-Asian
trade and south-south trade. New sources of energy
and new locations for existing types of energy will
likely impact energy transportation patterns. For
example, more gas carriers may load cargoes in the
US than in the Middle East. New areas of activity
for offshore supply shipping may also inluence the
global shipping infrastructure.
GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 25
While the emergence of a growing urban middle
class suggests increased demand for seaborne
transportation, it is not a given for all segments. For
example, as Chinas export-driven economy shifts
towards internal consumption, growth in export
volumes will decrease while inland and coastal
shipping will increase.
New geography of shipping services
A new distribution of world economic activity
will have consequences for the geography of
shipping services such as technical management
and ship building. Currently, the construction of
vessels in many segments (tankers, bulk carriers,
containerships) has shifted from the US and Europe
to Asia, while the expertise required for advanced
shipbuilding, such as cruise ships and offshore
supply vessels, remains concentrated in the
advanced economies.
By 2050, shipyards in Asia and South America will
have the expertise to capture a growing share of
contracts for advanced ships. At the same time,
shipping services, such as ship management and
crewing, will also be distributed more widely.
26 THE FUTURE OF SHIPPING

Medium High Low Constant fertility

30

25
Population (Billions)

20

15

10

0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Figure 3. Population of the world, 1950-2100, according to different projections and variants

Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat (2011).
World Population Prospects: The 2010 Revision. New York: United Nations.

Emerging maritime clusters in countries such as
Brazil and China will provide strong competition for
traditional maritime clusters.
Social acceptance criteria
As the global population becomes more educated
and wealthy, acceptance criteria for safety and
sustainability performance will change. Tolerance
for accidents at sea which today far exceed
accident rates in the offshore sector and land-based
industries will fall, placing pressure on owners and
ship managers to improve safety performance. At
the same time, public concerns regarding local air
pollution in densely populated areas and climate
change will force the industry to adhere to more
stringent environmental standards.
Potential game changers
Increased regionalism could make IMO
an irrelevant organisation
Over the next decades, states and regional
organisations may take on a larger role in regulating
international shipping independent of the system
now managed by the International Maritime
Organisation (IMO). States may develop and enforce
regional emissions control areas with different
requirements, as we have seen in the US and the EU.
Other actors, such as charterers and NGOs could
also play a signiicant role by setting more rigorous
standards and requirements for shipping companies.
If the IMO is unable to take a leading role and fulil
the expectations of its members, it risks losing
legitimacy and may become irrelevant by 2050.
Collapse in the demand for seaborne transport
Most studies project a continued increase. However,
a major global economic crisis could result in a
sudden and catastrophic collapse in the demand.
Other factors, driven by a global event (such as a
series of natural disasters) could also lead to trade
collapse. Disruptive technologies may also impact
trade. For example, local 3D printing could remove
the need to transport certain goods, causing a
signiicant drop in some shipping segments.
 GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 27

2011
China 17%
LESSONS
United States 23%
FROM
India 17%
HISTORY
Japan 7%

Euro area 17%

Globalisation
Other non-OECD 12%
Acceleration and reversal
Other OECD 18% While the shipping industry
has enjoyed decades of trade
liberalisation and economic
globalisation in the post-war period,
history teaches us that the global
economy is cyclical, inluenced by
policy shifts that swing between
protectionism and trade liberalisation.

2030
As a rule, the shipping industry thrives
China 28%
during periods of globalisation
United States 18% and contracts during periods of
India 11% protectionism. Consider that world
trade declined by around 66 per
Japan 4%
cent between 1929 and 1934
Euro area 12% during the inter-war period. During
Other non-OECD 12% periods of economic uncertainty,
creeping protectionism is a risk to
Other OECD 15%
globalisation, as governments enact
defensive trade policies to mitigate
domestic economic crises.

2060
China 28%
United States 16%
India 18%
Japan 3%

Euro area 9%

Other non-OECD 12%

Other OECD 14%

Figure 4. Major changes in the composition of global GDP - percentage of global GDP in 2005 PPPs. Source: Looking to
2060: Long-term global growth prospects. A going for growth report. OECD Economic Policy Papers, No. 03, 2012
28 THE FUTURE OF SHIPPING

INFORMATION AND
COMMUNICATION
TECHNOLOGY
The pace of change in information and communication technology (ICT) will
continue to accelerate towards 2050. Over the next few decades, developments
in ICT will revolutionise shipping, creating a more connected and eficient industry
more closely integrated with global supply chain networks. Future developments
in ICT will allow more data to be collected, analysed and integrated into the
decision-making process at all levels.

Data explosion Advances in storage technology will give tenfold

The volume of digitalised data is growing
exponentially. In 2006, roughly 161 billion GB of new
data was stored. By 2010, stored data had increased
by a factor of six. In this period, growth was driven
primarily by a shift from analogue (paper-based)
record keeping to faster and more cost effective
digital systems. Today, ICT is being increasingly
applied to new areas, both private (recreational,
gaming, personal relationships) and industrial
(healthcare, tourism, simulation). By 2020, it is
expected that 200 times more data will be generated
annually than in 2008.
increase in storage capacity roughly every four years.
Furthermore, developments in miniaturisation and
embedding software, together with expanded social
media platforms, will accelerate the generation of
vast amounts of data. However only three per cent
of potentially useful data is tagged, and even less is
analysed. To capitalise on this phenomenon (known
as big data), researchers will need to develop
advanced capabilities for search, analytics and
decision support.

Powering up
Computer processing power has developed in
parallel with rapid developments in data storage and
management. Consider that todays mobile phones
have the processing power of desktop computers
10 years ago. If this trend continues, mobile phones
will have the processing power of todays PCs and
in time, affordable and small, distributed sensors
will have the ability of todays mobile phones.
This growth in processing power will impact data
collection and allow intelligent monitoring and
control. Local, real-time data processing will highlight
the need for new data formats and process models.
Power computing will give rise to new requirements
for programs and programming languages.
Increased connectivity
Connectivity is a term used to describe not just
internet access but developments within mobile
telephony and other wirelessly connected devices.
In 2008, China surpassed the US in number
of Internet subscribers. As only 42 per cent of
Chinas population currently has internet access (in
contrast with 81 per cent of the population of the
US), a further increase in Chinese internet users is
expected.
A growing proportion of information (news,
books, real-time data, TV, entertainment, etc.)
will be accessed via various handheld devices.
Another intriguing change likely to occur is that
developing countries, which previously lagged
behind industrialised countries in terms of wired
communications infrastructure, will leapfrog the
developed world in the use of mobile telephony.
GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 29
Software everywhere
An ever-increasing number of products contain
embedded software. Mechanical control has been
replaced by digital control systems in many areas
such as in kitchen appliances, washing machines and
telephones to name a few. Consider that in 2000,
automobile control systems contained about one
million lines of code. Today, this number is closer to
100 times that many.
More autonomous, decentralised software
applications (e.g. inhabitant software) combined with
more powerful processors will make central control
of systems more dificult. As humans become more
dependent on software, ensuring security, user
identity, and reliability will be of growing concern.
Electronic devices containing inhabitant software will
become a part of, and utilise, cloud computing and
grid networking.
Implications for shipping
Automation and remote control
ICT developments allow for the increased use
of automated systems to improve operational
performance and reduce costs and risks associated
with human error. Today, sensors installed on ships
have allowed the monitoring of certain operating
parameters a trend likely to apply to more aspects
of operations. Digital technologies will inluence
business operations, regulatory/bureaucratic
procedures, navigation, maintenance and operations.
Shipping may also adopt technologies developed
for the oil and gas industry, such as systems for
remote operations, diagnostics and data mining.
30 THE FUTURE OF SHIPPING

Share what you measure Potential game changers

The use of sensors and systematic monitoring
systems will enable greater transparency in shipping,
from tell me to show me. That is, stakeholders
such as charterers and cargo owners will require that
shipping companies provide measured and veriied
information about a ships performance. In addition,
the low of information between different actors in
the shipping industry will be increasingly digitalised.
For example, electronic port compliance and
e-customs are likely to become the norm. Shipping
companies may also change how they interact
with customers and suppliers. The introduction of
more automation on-board and rapidly expanding
data volumes will require new approaches to data
storage, processing and transfer.
Advanced modelling and simulation
tools for design
Ship design will help owners manage challenges
related to technical issues, market speciicities,
future energy prices, climate change, and existing
and upcoming regulations. New computational
capabilities will enable the development of
advanced modelling and simulation tools for design
and optimisation of new hull designs, propulsion,
and complex machinery systems, etc. These
technologies allow for improvements in service
delivery, virtual prototyping, and next-generation
energy management.
Seafarer welfare
ICT developments in shipping can also have a
positive effect on crew retention. Making broadband
available on vessels signiicantly improves the lives
of seafarers, who can more easily communicate with
family and stay connected to world events.
Unmanned vessels
By 2050, we may see the development of unmanned
vessels. With advanced ICT, vessels can be designed
to be remotely-operated from shore. Unmanned
vessels would beneit from lower operational
costs compared to convention vessels, due to the
elimination of on-board crew costs, risks associated
with human error, and threats to crew safety.
Unmanned vessels may also revolutionise supply
chain logistics, which would have wide-reaching
impacts on the industry. As there would be no
human restrictions on how much time a vessel can
spend at sea, ships that do not carry time-sensitive
cargoes (such as perishable goods) could in theory
drift with sea currents when possible to move as
energy-eficiently as possible.
Hijacking incident
It should be noted that ships equipped with
autonomous systems may be more vulnerable to
hijacking than manned vessels. For example, by
hacking into the unmanned vessels control system, a
group or individual could highjack an oil tanker from
a remote location and hold it for ransom, or worse,
use the tanker in a terrorist attack. An incident like
this could have a deterring effect on autonomous
systems and uptake of ICT development in the
shipping industry. However, due to its proven
beneits, the level of ICT uptake to enable more
automation in shipping is likely to continue.

LESSONS Deep-sea cables: a communication revolution

The irst successful transatlantic cable was laid in 1865. Within a decade, a network
FROM of cables linking major cities around the world was in place. By 1897, there were
HISTORY 162,000 nautical miles of cable, with London at the centre of the network. This
communications network revolutionised communications and fundamentally
transformed the shipping industry. Previously, vessels would lie idle in port for weeks
waiting for orders on what to take on-board as return cargo. The use of telegraph
messages allowed voyages to be planned and optimised. More innovative use of
ICT is expected to have a similar, transformative effect on the shipping industry,
improving safety and eficiency in the coming decades.
 THE WORLD'S CAPACITY
TO STORE INFORMATION
2007
This charts shows the worlds growth in storage

ANALOG
ANALOG
capacity for both analog data (books, newspapers,
 
 
videotapes etc.) and digital (CDs, DVDs, computer
Paper, lm, audiotape and vinly: 6.2%
hard drives, smartphone drives etc.) Analog videotapes: 93.8%
Other digital media: 0.8%
In gigabytes or estimated equiavalent. Portable media players, ash drives: 2%

DIGITAL
Portable hard disks: 2.4%
CDs and minidisks: 8.8%

2000
Digital tapes: 11.8%

1986
1993
ANALOG

 

ANALOG DIGITAL DVD/Blu-ray: 22.8%

DIGITAL
  

PC hard disks: 44.5%


 

*Other includes chip cards,

Computing power memory cards, oppy disks, mobile
phones/PDAs, cameras/camcord-
In 1986, pocket calculators accounted for much of ers, video games
the worlds data-processing power.

Percentage of available processing by device: 2007

DIGITAL

  

Pocket Personal Video game Servers,

calculators computers consoles mainframes

1986 41% 33% 9% 17%

2007 66% 25% 3 6

Mobile Supercomputers
phones, (0.3%)
FDAs

Figure 5. The world's capacity to store information. Source: Todd Lindeman and Brian Vastag/ The Washington Post,
http://www.washingtonpost.com/wp-dyn/content/graphic/2011/02/11/GR2011021100614.html
32 THE FUTURE OF SHIPPING

ENERGY
Economic growth will drive demand for energy, while increasing eficiency will help
mitigate demand. A number of studies predict increasing use of fossil fuel towards
2050. While there will most likely be an available supply to meet the demand, this will
have a severe impact on the earths climate. As established energy sources dwindle
and new alternative fuel sources become viable, the world will move towards a more
sustainable, low-carbon energy supply.

Despite efficiency gains, global
energy demand will increase
Population growth and economic development are
projected to result in a global economy four times
larger than today, requiring 80 per cent more energy
in 2050.
The assumed 1.3 per cent annual growth in the
worlds total primary energy demand will add 40
per cent to consumption by 2040. In OECD countries
low population growth rates, aging, technological
progress and energy saving practices will result
in relatively modest increases in energy demand.
However, for non-OECD states, energy demand
is expected to rise almost 70 per cent by 2040
compared to 2010, relecting population growth,
industrialisation and growing prosperity.
The demand for different energy sources will
grow at very different speeds, ranging from
0.5 per cent to 9.0 per cent per year, with select
renewables increasing most rapidly. Differences
in the availability of other energy types will
continue to play a large part in accounting for
inter-regional energy mixes.
Fossil fuels will continue to dominate
Despite advances in renewable energy, many
analysts forecast that the global energy mix in
2050 will not differ signiicantly from today. The
OECD predicts that fossil energy will meet 85
per cent of energy demand, while renewables,
including biofuels, will account for only 10 per
cent. The remainder is likely to be covered by
nuclear energy.

Due to its availability, lexibility and low emissions
(relative to coal), natural gas will become an
increasingly important fuel. Gas demand will grow
rapidly in China, with India, the Middle East and
Africa following. In North America and Europe,
natural gas will overtake oil as the largest source
of energy.
Coal displacement is expected to take place nearly
everywhere, but at different speeds in different
regions. We expect coal use to decline sharply in
OECD countries. In China, overall coal demand is
expected to be almost 60 per cent higher in 2040
than today, although its market share is expected to
go down. Oil use in China will increase by the same
percentage, and gas by close to 400 per cent.
The growth of non-fossil fuels
will vary between regions
Non-fossil fuels are expected to grow at around
2.6 per cent annually, driven by a universal desire
to mitigate local pollution issues, combat climate
change and secure energy supply. In some
developing countries, renewables will also be used
to bring electricity to the rural areas.
Growth patterns will vary from region to region.
The OECD countries will prioritise wind and solar,
while many non-OECD countries will press ahead
with hydro and nuclear power as well. In any event,
solar, wind and geothermal energy will continue to
capture market share in the generation of electricity.
We assume that policy support will remain in place
to drive the deployment of renewables and reduce
costs.
In China, hydro power will grow by more than 100
per cent from todays levels, and nuclear and other
GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 33
renewables will increase more than 10-fold during
the forecast period.
Implications for shipping
Change in the energy mix
The change in fuel mix for shipping will be strongly
affected by the future global energy mix, as well
as fuel price and infrastructure development.
Geographical availability of different fuels, coupled
with energy security issues, will also inluence the
energy mix. For example, the exploitation of shale
oil and gas could have a signiicant impact on energy
prices.
Different cargoes, new ship types, and new
transport patterns
Changes in the global energy mix will lead to
changes in the types of cargoes transported by ships.
There will be an increased demand for transportation
of natural gas, biofuels, and other alternative energy
types. Shale gas production has soared in the US in
recent years, and is projected to continue growing at
a rapid pace. The US will likely become a large LNG
exporter, and traditional gas routes from the Middle
East to Asia will compete with new routes connecting
the US to Asia. Most analysts agree that increased
demand for gas will require an expansion of the
current gas carrier leet.
Demand for clean energy will spur growth in
renewable energy investments, requiring specialised
tonnage to transport and install offshore renewables
(e.g. wind, solar) facilities.
Shift in marine activities
The search for alternative energy sources will lead
to a shift from traditional offshore marine activities
to activities related to both deep-sea operations
34 THE FUTURE OF SHIPPING

400

300

200

Figure 6. Energy intensity of the

world economy tonnes of oil
100
equivalent /million 2005-USD

Source: IEA/IHS Global Insight

0 (history), Statoil (forecast)

1990 2000 2010 2020 2030 2040

and offshore renewable facilities. New types of A new energy crisis

offshore support vessels will need to be designed
to install, maintain and decommission offshore
wind or solar facilities. It should also be noted that
the development of offshore resources, including
offshore power grids, will likely result in more
congested sea lanes, which increase the risk of
collisions and groundings, which represent safety
risks.
Potential game changers
Technological breakthrough
If the threat of GHG emissions could be managed
by the development of some, as yet unknown
technological breakthrough, the shipping industry
would change rapidly. Such a breakthrough may be
achieved through the discovery and introduction of
a new, cheap clean fuel type or a simple, affordable
carbon capture and storage solution, a technology
which would allow the continued use of fossil fuels.
Export bans, or conlicts in energy-producing
countries, could result in a lasting global energy crisis,
leading to sky-high fuel prices for shipping. A long-
term energy crisis could dwarf the price hikes the
industry experienced in the 1970s, forcing shipping
companies to rethink existing business models, ship
design and operation.
Acceptance of nuclear-fuelled ships
After an extended setback resulting from the
Fukushima incident, nuclear power has re-emerged
as a viable energy alternative. Although several
hundred nuclear-powered navy vessels exist, few
nuclear-powered merchant ships have been built.
Land-based prototypes offer compact reactors
comparable to large marine diesel engines. The main
barriers to nuclear shipping relate to uncontrolled
proliferation of nuclear material, decommissioning
and storage of radioactive waste, the signiicant
investment costs and limited societal acceptance.

LESSONS Fuel shifts can happen fast

Maritime history shows that the shipping industry is quick to adapt to new fuels, if
FROM the right incentives are in place. For example, in the period between 1914 and 1922,
HISTORY the percentage of vessels using oil rather than coal in their boilers increased from
three per cent to 24 per cent. While the speed of this shift was abetted by the fact
that owners could use existing machinery with minimal modiications, it shows that
the industry can move quickly if a better solution is available. However, history also
shows that fuels that demand new types of machinery, such as the transition from
coal to oil via the combustion engine, slows the migration to new energy sources.
 WORLD PRIMARY ENERGY DEMAND BY REGION (MTOE)

8000
America

7000 Europe
Asia Oceania
Million tonnes of oil equivalents

6000 E. Europe/Eurasia
Asia
5000
Middle East

4000 Africa
Latin America
3000

2000

1000

0
1990 2000 2011 2020 2030 2035

Figure 7. World primary energy demand by region (Mtoe).

Source: IEA (2013). World Energy Outlook 2013.

SHARE OF TOTAL PRIMARY ENERGY DEMAND

100 % Other renewables

90 % Bioenergy
Hydro
80 % Nuclear
Gas
70 %
Oil
60 % Coal

50 %

40 %

30 %

20 %

10 %

0%
1990 2011 2020 2025 2030 2035

Figure 8. Share of total primary energy demand.

Source: IEA (2013). World Energy Outlook 2013
36 THE FUTURE OF SHIPPING

CLIMATE CHANGE
AND ENVIRONMENT
According to an OECD baseline scenario, pressures on the environment from
population growth and rising living standards will outpace progress in pollution
abatement and resource eficiency. Already, signs of climate change, a growing
scarcity of natural resources and threats to the environment have resulted in a
renewed focus on environmental sustainability.

A more hostile natural environment
Assuming greenhouse gas emissions continue to
drive global temperatures upward, we can predict
a broad range of consequences likely to occur. These
include rising sea levels, increased frequency and
severity of heat waves and droughts, storm surges,
river looding and a higher frequency of wildires.
These consequences will have signiicant regional
differences. For example, wet areas will become
wetter and dry zones will become more arid.
By mid-century, the availability of water is projected
to increase at high latitudes (and in some tropical
wet areas) and decrease, or become unstable, in
dry regions in the mid-latitudes and tropics.
It is also projected that many semi-arid areas
(e.g. Mediterranean Basin, western United States,
southern Africa and north-eastern Brazil) will suffer
a decrease in water resources due to climate change.
Unusual and unprecedented heat extremes are
expected to occur far more frequently and cover
greater land areas. Finally, sea levels have risen more
rapidly than previously projected. A rise of as much
as 50 cm by the 2050s may be unavoidable as a
result of past emissions.
Strained resources: water and food
Climate change will affect the availability of food,
water and energy. These effects will vary widely by
region. Combined with a growing population and
dietary changes, the stress on available resources
especially water will intensify. Unless action is taken,
hundreds of millions of people could be exposed
to increased water stress. By 2030, nearly half the
world's population will live in areas with severe water
stress.

Today, agriculture uses 70 per cent of global
freshwater resources a disproportionate share
of this igure is used for livestock husbandry.
Nevertheless, between 2000 and 2050, global cereal
demand is projected to increase by 70 to 75 per
cent, while meat consumption is expected to double.
With more people locking to big cities, water will
be increasingly concentrated in urban areas. At the
same time, overishing has decimated global ish
stocks, an event exacerbated by destructive isheries
and ocean acidiication.
Climate change could mean decreased cereal
productivity in low latitudes, countered by increased
cereal productivity at mid-to high latitudes. If not
affecting total volumes, there will at least be shifts
in production sites/trade patterns.
Pollution and public health
Air pollution will become the worlds top
environmental cause of premature mortality,
overtaking dirty water and lack of sanitation. By 2050,
air quality will still be above WHO guidelines in most
developing countries. Particulate matter and ground
level ozone are the two most important air quality
components, which typically rise in concentration
as the result of power generation (e.g. coal) from
industry and from transport.
Already by 2030, ive to eight per cent of the
population will live without safe drinking water and
17-28 per cent of the population will live without
improved sanitation. These challenges may grow
more complex as we get closer to 2050.
In addition, climate change will adversely affect
human health in populations with low adaptive
capacity. Climate change could also create new
GLOBAL TRENDS SHAPING THE SHIPPING INDUSTRY 37
social and economic tension and competition
for resources that could lead to civil and political
conlict.
Implications for shipping
Reduction of shipping footprint
While shipping is one of the most eficient modes
of transportation, the industry still contributes to
environmental damage. Like all industries, shipping
will be expected to reduce its environmental
footprint and is likely to be subject to stricter
regulations, especially on greenhouse gas emissions.
In addition to international regulations on emissions,
it is likely that stakeholders such as charterers,
banks, insurance companies, and investors will set
stricter requirements for owners to improve energy
eficiency and reduce GHG emissions.
Shipping companies will also likely be required
to reduce their material footprint. In a world
characterised by increasingly scarce resources and
rising public concerns regarding the environment,
recycling of materials will become both a
requirement and a norm.
Climate change adaptation
Ships, yards and ports are all vulnerable to climate
change and should expect to take action to adapt.
For example, the expected shift in wave patterns,
increased wave heights, and more severe weather
conditions in the medium and long term, will call for
improved design and operational safety standards.
Likewise, increased intensity of rainfall, heat waves,
wind speeds, storms and storm surges, all represent
different risks to yards and port infrastructure and
operations.
 2010 2030 2050 Figure 9. Global
premature deaths from
selected environmental risks:
Particulate matter
Baseline, 2010 to 2050

Source: OECD (2012).

Ground-level ozone Environmental outlook to
2050: The consequences
of inaction
Unsafe water supply
and sanitation

Indoor air pollution

Malaria

0 0.5 1 1.5 2 2.5 3 3.5 4

Deaths (millions of people)

Arctic shipping
Climate change will unlock the Arctic, leading to
increased activity in ice-covered waters. This includes
destination shipping, shipping activities related to
offshore oil and gas extraction and transit shipping.
There are a series of hazards and uncertainties
related to sailing in the Arctic, such as sea ice,
harsh weather conditions, and the availability (and
operational costs) of icebreakers. Challenges include
winterisation to combat icing on the ship and cargo,
freezing in ballast tanks, and wind chills affecting the
crew. Ships sailing in the Arctic will need to be ice-
classed and have technologies in place to prevent
environmental damage and mitigate risk to fragile
marine eco-systems found above the Arctic Circle.
and other foods will change, based on how climate
change impacts production and import demand.
We may also see new types of cargoes, such as
water. Water scarcity will be a serious issue towards
2050, and large oil tankers can provide temporary
solutions in areas that have acute water shortages.
Potential game changers
A ban on the use of fossil fuels
If the impact of climate change is more severe than
predicted, humanity may be forced to ban the use of
fossil fuels. This would have dramatic consequences
for all industries, including the shipping industry.

New cargoes and trade patterns
Countries will continue to depend on international
trade to ensure food security in 2050. The Food and
Agriculture Organization estimates that net imports
of cereals from developing countries will more than
double from 135 million metric tonnes in 2008/2009
to 300 million in 2050. However, the pattern of cereals
Many vessel types are designed to either transport
fossil fuels or support the exploration and production
of fossil fuels. A ban on fossil fuels could make
these ship types obsolete. For example, a ban would
stop oil and gas offshore activities, making offshore
supply and other offshore special vessels irrelevant.
Oil tankers would also ind themselves out of work.

LESSONS Shipping can adapt to new cargoes

History shows that the shipping industry is used to adapting to new types of cargoes
FROM when there is a need in the market. Over time, vessels have become more and more
HISTORY specialised to adapt to different cargo types. This includes the development of oil
tankers to meet the need for bulk transport of oil, the development of specialised
parcel tankers to transport different types of chemicals, and the development of
passenger liners and cruise ships to meet the demand for personal travel.
 SOx emissions from international shipping from 1990 to 2050 F i e  Emissions to air in
30 international shipping from
1990 to 2050.
SOx emissions (million tons SOx / year)

25
Source: IMO Second GHG
study, extrapolated by DNV
GL and Bazari Z. and Longva
20
T., Estimated CO2 reduction
from introduction of mandatory
technical and operational energy
15 eficiency measures for ships, LR
and DNV, 2011.

10

0
1990 2000 2010 2020 2030 2040 2050

Historic With MARPOL Annex VI Business as usual

NOx emissions from international shipping from 1990 to 2050

60
NOx emissions (million tons NOx / year)

50

40

30

20

10

0
1990 2000 2010 2020 2030 2040 2050

Historic With MARPOL Annex VI Business as usual

CO2 emissions from international shipping from 1990 to 2050

2500
CO2 emissions (million tons CO2 / year)

2000

1500

1000

500

0
1990 2000 2010 2020 2030 2040 2050

Historic Business as usual With MARPOL Annex VI (EEDI & SEEMP)

40 THE FUTURE OF SHIPPING

PATHWAYS
TOWARDS SAFER, SMARTER AND GREENER SHIPPING
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 41

Mariko Hagaki

Meeting the ambitions to make shipping a sustainable industry by 2050

will require the industry to mobilise new technologies and solutions and learn to
rethink differently about how its business and operations function. We have outlined
six pathways that we think will have the largest impact on achieving a more sustainable
industry: safe operations of ships, advanced ship design, the connected ship, future
materials, eficient shipping and low carbon energy.
42 THE FUTURE OF SHIPPING

SAFE OPERATIONS
Despite genuine progress, the shipping industry lags well behind many other
industries when it comes to safety. While the industrys relatively high rate of fatalities
and accidents can be attributed in part to risks associated with operations in
challenging environments, the public has become increasingly critical of accidents
that result in injury or loss of life. How will the industry respond and what tools are
available to improve the industrys safety record? In the past, the industry has turned
to technology for answers, but increasingly, owners are recognising the value of
embracing a broader, more holistic approach to safety.

While an increased focus on safety in the shipping
industry has helped reduce fatalities at sea over the
past two decades, more work needs to be done. The
crew fatality rate is 10 times higher than the current
level in land-based industries in OECD-countries.
To improve its safety record, the industry must
address a number of issues. First, the industry has
allocated more resources to mitigate individual
accident risk than major accident risk, which is rare
but leads to far more serious consequences. Second,
owners tend to place too much conidence in safety
procedures, excluding focus on more complex,
holistic safety methodologies. Third, the bridge
remains mostly an autocratic work environment,
one that hinders effective communication. Fourth,
owners too often blame individuals for causing
accidents, instead of looking at the underlying
causes. And inally, the industrys approach to safety
has been reactive rather than proactive, re-enforcing
an industry culture that relies on accidents to drive
change, rather than focus on prevention.
M anan omxt y
Avoiding accidents and ensuring the safety of
on-board personnel represents one of the most
complex challenges faced by owners and ship
managers. Unlike mechanical or technical systems,
safety systems must account for the seemingly
ininite variables of human behaviour. On-board
personnel regularly interact with each other, heavy
machinery and a broad range of control and data
systems in a loating workplace far from land-based
resources, and often impacted by severe weather
and harsh conditions.
K nw d drv s aft y
For owners and managers, there are both internal
and external drivers to improve safety. Internally,
owners assume responsibility for safeguarding
the life and welfare of their personnel and the
integrity and safety of assets and cargo. Externally,
shipping companies have regulatory, commercial
and reputational incentives to improve on safety
performance. However, like many industries,
accidents remain the prime driver of changes in
safe operations.
We live in an increasingly connected world, where
news of maritime disasters travels quickly. Public
outrage in response to fatal accidents at sea has
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 43
placed the industry under increased scrutiny,
pressuring regulators to introduce new requirements
to improve safety and owners to take steps to reduce
risks. In addition to the human cost of fatalities and
injuries at sea, owners, managers, oficers and crew
are increasingly subject to criminal prosecution,
civil suits and compensatory damage claims. Also,
accidents often result in costly insurance claims, and
can do signiicant harm to a companys reputation.
While these risks would seem to act as powerful
incentives for owners to take a more proactive
approach to safety, improvements in performance
have generally followed accidents. Consider that
the sinking of the Titanic, one of the industrys
most memorable catastrophes, not only lead to
the introduction of the SOLAS Convention and
(eventually) the IMO, but triggered a number of
safety-related innovations in for example materials,
hull integrity and stress testing.
S u tn s for safe operations
To bring accidents in shipping into alignment
with land-based industries, owners and managers
must embrace a new mindset on safety. While
new technologies will play a role in this process,
they cannot be viewed as a substitute for a more
proactive, holistic approach to safety. By focusing on
underlying causes, and how organisations should be
structured to support safety systems, the industry will
have a better understanding of how humans interact
with each other and technology, and how different
forces and stakeholders impact operations and risk
management.
This section will examine three solutions most likely
to impact safe operations in the following decades:
dynamic risk management, which maps out links
between operations and strategy and how various
stakeholders affect safety performance; organising
for safety, which is focused on elements crucial to
building an effective safety culture; and system
resilience, which offers solutions to get the best out
of technology and personnel to achieve improved
operational safety and eficiency.
44 THE FUTURE OF SHIPPING
PATHWAYS SAFE OPERATIONS
Dynamic risk management
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Safety improvements in shipping have generally
followed accidents. However, the shipping industry
has also been inluenced by accidents in other
industries. In the 1970s, accident investigations in
the aviation industry resulted in a shift away from
assigning blame to mechanical systems towards a
greater focus on human error, which led to improved
training programmes. In the 1990s, other aviation
accident investigations resulted in the development
of a more holistic approach that broadened the
scope of safety prevention to include not only
individual factors, but also environmental and
organisational factors.
In other words, rather than focus on searching for
the bad apple or assigning blame to individuals,
this new approach to safety focuses on underlying
causes. Today, accidents in both the aviation and
nuclear industries have driven research on how
humans, technology and organisations (HTO) interact.
Although the shipping industry has learned some of
these lessons, it has a long way to go.
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
Humans, technologies and organisations are barriers
to accidents. Dynamic Risk Management (DRM) is
a system used to control, apply and maintain these
barriers and ensure the integrity of the entire system.
Unlike the more linear, static risk management tools
that seek to identify causal links and isolate speciics
gaps in safety (often after an accident occurs),
DRM is focused on prevention. By taking a more
comprehensive view of risk parameters to include
interacting systems and strategies, DRM continuously
assesses risk throughout the valuechain, both on land
and at sea. And because DRM employs inductive
methodologies to assess risks, it is proactive not
reactive. In brief, rather than develop new safety
procedures in response to accidents, DRM will allow
the industry to anticipate and eliminate potential risks.
En b! "#$hoo!#s
To be effective, a DRM system must assess operational
risk on a continuous basis. However, we must stress
that the value of DRM is not based on data and

technology alone. Rather, what makes DRM a powerful
solution has more to do with a mindset than any
speciic technology. To be effective, this new mindset
must include a pro-active approach to safety, barrier
thinking and what forces impact safety barriers. One
useful DRM tool is the Bow Tie risk management
method, a methodology that plots the links between
undesired events and barriers. This method helps
users to visualise the events that triggered an event,
the consequences of that event, and identiies barriers
that may have reduced both the probability and
impact of the event. Often, the action of an individual
is necessary for a technical barrier to function. In such
cases, there is also a need to identify factors that shape
or affect human interaction with the barriers.
Ex p%&'%d (%v %lop)%*' s
The ield of risk management and assessment is
developing rapidly. While the aviation, aerospace
and nuclear energy industries continue to be the
primary drivers of DRM tools and methodologies,
Technologies and tools
Pro-active approach to safety, barrier
thinking and identiication of forces
that impact safety barriers
Risk management methods
such as Bow Tie
Smart barriers - a complex network
of barriers designed with the ability
to anticipate and act on information
gathered and analysed
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 45
the shipping industry is also likely to beneit
from advances in the offshore industry, which is
developing risk management systems that can be
more readily adapted to the maritime industry.
Other developments likely to shape dynamic risk
management solutions are related to smart barriers.
Apart from prevention and mitigation of risks, smart
barriers (based on a complex network of barriers)
will be designed with the ability to anticipate and
act on information gathered and analysed as part of
the methodology. Such smart barriers will be highly
sensitive to performance variability, able to interact
within the barrier networks, and send notiications
and alerts well in advance. Understanding current
challenges and successful practices will enable
improved anticipation of undesired events, and allow
companies the necessary time to allocate resources,
improve performance and prevent accidents.
Benefits
Improved learning from accidents
Better understanding
of the dynamic nature of risk
Applying proactive measures
through anticipation of risk
Reduced risk level from increased
understanding of risks and barriers
46 THE FUTURE OF SHIPPING
PATHWAYS SAFE OPERATIONS
Organising for safety
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
To improve its safety performance, the shipping
industry must overcome a number of hurdles related
to systems complexity, inadequate training, and
organisational challenges. Despite improved training
regimes and increasingly reliable systems, accidents
remain all too common. In response, companies
have turned to procedures (e.g. checklists,
documentation, reporting systems) to manage
safety risk. Yet studies indicate that dependence on
systems in the absence of a robust safety culture
erodes trust, encourages complacency, and has led
to fundamental misinterpretations of the purpose
and objectives of safety management systems. If
so, the underlying reasons for commercial losses,
accidents and incidents cannot be attributed to
individuals or insuficient technologies, but to a lack
of management control of systems and a failure of
management to understand the importance of a
robust safety culture.
A safety culture refers to how an organisation
operates with regard to safety and its ability to
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
manage unpredictable and undesired events.
Building a robust and mature safety culture is critical
for identifying potential risks, sharing information
and learning from past experiences. As such,
companies can reduce risk and be in a better
position to anticipate, avoid and manage crises.
Building a safety culture is a continuous long-term
process, and because the industry is constantly
exposed to new risks, the task is never completed.
Companies must identify and update safety trends,
establish and maintain clear benchmarks and
KPIs, and support these efforts with face-to-face
meetings, workshops and seminars. Creating a
structured and inclusive environment where safety-
related information is freely shared increases an
organisations ability to select the best systems and
tools and achieve the optimum safety return on
investment. At the same time, owners must build
a company culture that is just and fair, one that
clearly deines the line between acceptable and
unacceptable behaviour.

E+,-./+0 1234+o.50/2s
Much of the thinking behind building a safety culture
originates from the growing ield of organisational
behaviour, which studies how the relationship
between individuals, groups and structures within
an organisation impact its effectiveness.
Improving safety culture begins with top
management, who must identify and deine
organisational strengths and weaknesses, prioritise
focus areas and invest in systems and tools to
support the culture. At sea, improved safety
performance is enabled by effective cooperation
between oficers and crew, a process facilitated by
the leaders behaviour, leadership style, and ability
to communicate effectively. Together with a modern
approach to selection and development of personnel,
this will give a strong impact on team functionality.
Technologies and tools
Identify and understand the positive and
negative drivers of the safety culture
Effective cooperation between oficers
and crew to utilise the total competence
of the team
Formal and informal arenas for
experience exchange
Selection, training and career
development to ensure the right
competence for the organization and the
right development for the individual
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 47
Expected developments
The beneits of building a strong safety culture
are already recognised by a number of shipping
companies, but in terms of development, the industry
still lags behind many industries on land. Today,
some owners have developed more sophisticated
reporting and monitoring systems, a trend that is likely
to continue. Also, advances in training, competence
development and human resource management
are likely to support efforts to build more robust
safety cultures. We also expect that public demand
for more transparency will encourage owners to
share more information, which may lead to more
standardised systems and enable the sharing of safety
culture best practices. At the same time, the direct
correlation between improved safety performance
and operational eficiency will be increasingly seen as
a competitive advantage.
Benefits
Quality depends on total team
competence, not only individual
competence
A culture of sharing experiences
Better learning from success and failures
Improved teamwork and leadership
increases motivation and awareness
The right people in important positions
48 THE FUTURE OF SHIPPING
PATHWAYS SAFE OPERATIONS
System resilience
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
System resilience refers to the capacity of a system to
adapt to different circumstances and the capabilities
of different users while remaining within deined
operational thresholds. A resilient system accounts
for the human element and enables the seamless
integration of equipment and control systems.
For the shipping industry, this solution applies to
a number of areas, such as the design of working
space where operations are conducted and solutions
to improve interaction between vessels operating in
high-density trafic areas, among others.
E67bling technologies
Systems resilience relies on a broad range of
technologies. Today, increasingly ergonomic and
integrated bridge control systems are available.
The development of global standards and principles
covering ergonomics and improved integration
of bridge controls is already underway, helping
to ensure better correlation between design and
operations. Also, a more standardised bridge will
reduce the time needed for personnel to familiarise
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
themselves with bridge controls and eventually lead
to the development of best practices that can be
applied throughout the industry.
At the same time, technologies developed by other
industries (e.g. aviation) are being applied to shipping
to help reduce port congestion and collision risk.
Today, some of the worlds busiest ports utilise satellite
technologies to track and monitor vessel trafic, and
we expect these technologies will develop further.
Expected developments
Next generation bridge control systems will further
enhance the interface between users and control
systems, making an important contribution to safety.
In the future, the working environment on the bridge
will be designed to handle both low and high-intensity
operations and planned and unplanned events.
In critical situations, safety risks increase due to the
number of stakeholders involved, rapidly changing
circumstances and insuficient time to gather and

"Next-generation bridge control systems will further enhance the interface between users and
control systems, making an important contribution to safety"
process the information required to make the correct
decisions. By mapping all known stakeholders, these
issues will be considered in the design process.
The design will provide the decision-maker spare
capacity to assess the situation, keep his/her situational recommendations to alter heading and speed,
awareness and enact decisions based on the big
picture. Furthermore, a more standardised bridge
will increase training eficiency and help identify best
practices.
Developments in system resilience will also help
the industry with collision avoidance in increasingly
crowded ports and congested sea lanes. The industry
can mitigate these risks by improved utilisation of on-
board planning, lookout and navigation systems.
T8c 9:;<og=8s and tools
Ergonomic and integrated bridge
control systems based on global
standards
Satellite and communication
technology to track and monitor
vessel trafic
Surveillance and navigation
technologies (monitoring,
AIS, radar, laser, electronic maps)
Sea Trafic Control (STC) system
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 49
Closer to ports, the industry may also beneit from
a trafic control system, modelled on systems now
in use by the aviation industry. Such a Sea Trafic
Control (STC) system could provide clearance through
congested areas on assigned routings, or provide
when appropriate. The STC would be responsible
for helping vessels maintain a safe distance from
land and other marine trafic. This system increases
the eficiency and safety in high-density areas and
could also be used to direct trafic in vulnerable or
environmentally sensitive areas.
Benefits
Increased effect and precision of
safety and eficiency performance
Increased feed-back loop with regards
to integrating human and organisational
elements in design and improvements
Increased awareness of tasks and
operations that are being performed
Reduced disruptions in operation
50 THE FUTURE OF SHIPPING
SAFE OPERATIONS
A POSSIBLE FUTURE
Increased focus on the underlying
causes in accident investigations
New safety management methods introduced
including understanding of barriers
TODAY
Due to public demand for improved safety,
regulatory pressure, and the application of new
technologies, developments in safe operations are
likely to accelerate rapidly in the next four decades.
By 2020, owners and managers will increasingly
adopt a more proactive and preventative approach
to safety, implement systems to facilitate learning
from mistakes and have a better understanding of
what issues affect safety barriers.
Advances in the science of human resource
development will enable the industry to have access
to a more skilled workforce. The workforce will
likely include more women, have lower turnover
of personnel, and improved quality of leadership
both at sea and on land. Attention will shift from
Debrieing sessions to learn from
both success and failures
Increased understanding of difference between
major accident risk and individual risk
individual mistakes to organisational issues, which
will help companies devote more resources to
improving organisational systems that better support
safety.
As new technologies and advanced risk
methodologies are applied, a safety culture
will be seen as a critical indicator of safety
performance. Owners and managers will take a
more comprehensive approach to risk management,
working to prevent both individual and major
accidents. By 2030 user-centric bridge control
systems will be the industry standard, and bridge
teams will beneit from improved communication
between personnel of various ranks on the bridge.
The IMO is also likely to require that all maritime

The bridge is designed around the user, and gives
just the right information in the right situation
International focus on reporting, analysing
accidents and learning from near misses
nations report accidents and near misses and issue
recommendations to improve learning. At the same
time, sea trafic control systems in some ports will
migrate from just tracking vessels to offering routing
advice.
In 2050, the application of innovative risk
management models will result in a new, industry-
wide safety mindset that will combine both strategic
and operational issues to improve performance.
Regulators will put in place rules requiring the
industry to be more transparent, so that owners and
managers will share critical data on accidents and
near misses, allowing the industry to develop best
practices. Sea trafic control systems will become
more sophisticated to include vectoring, speed
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 51
Shutterstock
Safety is a strategic goal of
all involved organisations
Trafic control is further developed, including
shift of control from ship to land if necessary
2050
allocation and data collection, and have the authority
to intervene if a vessel does not comply with
recommended routes.
Unlike other pathways towards sustainable shipping
described in this report, safe operations will not
be driven, or achievable, by the introduction of
new technologies. In fact, the introduction of
new technologies can represent a risk to safety
by increasing systems complexity. Rather, safety
at sea can only be achieved by gaining a better
understanding of human behaviour, and how people
interact with technology, systems and each other in
groups, both large and small.
52 THE FUTURE OF SHIPPING

ADVANCED SHIP DESIGN

What if a ship owner could develop, test and evaluate new hull forms and technologies
under diverse conditions well before work is ordered at the yard? How would the
industry change if owners had access to next-generation emulation systems capable
of mimicking on-board conditions? Thanks to recent developments in software
engineering and advanced computing, the industry will soon be able to produce a new
generation of vessels that will minimise risk and signiicantly improve performance in
safety, and operational and energy eficiency.

"...the question is not if these tools will be available, but how fast they will develop and how
quickly the shipping industry adopts them"
It is dificult to overstate the importance of ship
design to next-generation shipping. After all, ship
design marks the irst step in a vessels life and
impacts the development, installation and utilisation
all new technologies and solutions for the lifetime
of the vessel. Indeed, ship design is fundamental to
optimising performance a key driver for an industry
seeking to produce safer, greener and smarter
vessels in the years to come.
M >?>@A?@ BoCDEFGAH y
Shipping is becoming more complex due to new
regulations, ierce competition, the introduction of
new technologies and fuel sources. To manage the
increasing complexity of systems and operations
both on land and at sea, owners are seeking new
tools for ship design to enable more cost effective
operations, increase their competitive advantage
and stay in compliance with new and expected
regulations.
Key drivers for developments in advanced
ship design include the rapid developments
in information technology, the digitalisation of
information and increasingly powerful computers
and processors. Indeed, many of the enabling
technologies related to advanced ship design are
already in use by other industrial segments (e.g.
aviation, automotive, aerospace, etc.), where their
potential has been demonstrated. If so, the question
is not if these tools will be available, but how fast
they will develop and how quickly the shipping
industry adopts them.
Mu EHAIAsciplinary design
The application of advanced computing and
software engineering tools to ship design has been
slowed by a number of barriers. First, these highly
sophisticated tools are expensive and, to reach their
full potential, will require more robust computing
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 53
capabilities. Second, advanced ship design will
compete with existing ship design processes. If
so, migrating from legacy systems to a new way of
thinking about ship design represents a complex
organisational challenge. Furthermore, the absence
of common standards, inter-disciplinary competence
and data-sharing may act as a drag on optimising the
ship design process.
At present, the potential development of advanced
ship design is limited by computing power and
inadequate software. However, the greater
challenge appears to be related to how quickly
and to what extent the industry adapts to this new
technology. And since advanced ship design is
connected to other parts of the value chain (e.g.
shipbuilding, procurement, maintenance, etc.), it will
require coordination between different stakeholders
to achieve its full potential. Nevertheless, advanced
ship design represents a signiicant opportunity for
the industry to become safer, smarter and greener.
Advanced ship design solutions
Advanced ship design refers to a number of
innovations set to revolutionise the industry in the
coming years. This new approach to ship design
will act as a key enabler for the implementation of
a broad range of solutions and new technologies,
including new materials, digitalisation, connectivity,
low carbon energy solutions and related innovations
in equipment and systems. Because these subjects
are covered in other areas of this report, we have
chosen to focus on three primary areas: virtual
ship laboratory, energy eficient design and next-
generation emulation.
54 THE FUTURE OF SHIPPING
PATHWAYS ADVANCED SHIP DESIGN
Virtual ship laboratory
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
The virtual ship laboratory refers to a computer-
enabled virtual design environment. Thanks to
existing and expected advances in computer-
aided engineering, methods and tools, a virtual
environment can be created for testing performance
under diverse conditions, evaluating solutions,
introducing new technologies and assessing
different production, operational and design
features. This computer-aided model has the
ability to create a new, global ship design paradigm,
whereby all challenges and solutions can be
simultaneously addressed.
Future ship design tools will enable a shift from
the traditional segmented design process,
where different vessel features and components
are designed in isolation, to a more holistic,
multidisciplinary and integrated design process. In
addition, virtual ship design will provide owners with
access to a virtual model for each individual ship.
This model will be retained through a vessels entire
lifecycle, allowing for improved maintenance; easier
retroitting and modiication work; and operational
optimisation, among other beneits.
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
EJKbling technologies
Model-Based Systems Engineering (MBSE) represents
a new approach to the design, implementation and
operation of complex technical systems, one that
takes into account how different systems interact
and inluence the end product (the ship). By utilising
MBSE, the ship can be approached as a modular
system of inter-related sub-systems and processes
where each inter-relating element can be assessed
and optimised for the lifecycle of the vessel, enabling
optimisation of the design under both nominal
performance (design point) and the intended
operational characteristics.
Computational Fluid Dynamics (CFD) will also play a
role in the virtual ship laboratory. CFD is the preferred
method for studying and analysing ship hydrodynamics.
It can be applied for optimising hull shapes, analysing
motions and loads in waves, manoeuvring, the
assessment of hydrodynamic improvement devices,
and steps forward in propulsion design.
While the industry has already beneitted from
advances in computational luid dynamics, most

calculations today are limited to still or calm waters.
However, as CFD becomes more advanced, ship
designers will have access to more precise wind and
wave calculations, enabling the simulation of actual
conditions in variable environments.
All stakeholders within ship design are also likely to
make use of multidisciplinary collaboration platforms.
The platforms are computer tools that facilitate
co-operation and data exchange between teams
of engineers and software packages, and enable
improved co-operation between various stakeholders
across disciplines to produce the optimal results.
By sharing a common platform, teams of specialists
working on different areas, such as hull design or
machinery engineering, are brought under a single
umbrella, facilitating better results.
In addition, such platforms will allow experts in
different disciplines to access a single computer
model, enabling a more eficient and faster design
process. This also allows for the creation of a virtual
model identity for each individual ship, which can be
followed through its entire lifecycle.
At the same time, virtual and rapid prototyping tools
will allow teams to assess prototype designs before
their physical creation, in a virtual realm. This enables
signiicant cost and saves time when working on
complex, large-scale design projects. These tools are
already a reality and will become more widespread
with advances in software, more computing power
and the growing availability of suitable multi-
disciplinary collaboration platforms.
Technologies and tools
High performance computing
Model-based systems engineering
Multidisciplinary collaboration
platforms
Virtual identities of ships and systems
Tools for virtual and rapid prototyping
Computational Fluid Dynamics (CFD)
and Virtual towing tanks
Standardised Life Cycle Assessment
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 55
Finally, developments in Life Cycle Assessment,
a standardised method for assessing the
environmental impact of a product, will allow design
teams to account for the entire life-cycle of each
vessel in the design phase, providing a unique
insight into each phase of the ships existence from
production, to operation and its eventual recycling.
E LMNO PNd developments
At present, Model-Based Systems Engineering is
used in the design of ship machinery and is a key
enabler for the introduction of new technologies.
In the future, the inluence of MBSE will expand in
scope to include other areas of ship design, such as
structural and hydrodynamic elements. At the same
time, developments in computational luid dynamics
represent enormous potential in ship design,
pending advances in software and computing power.
In the future, CFD will be able not only produce
hydrodynamic calculations for calm waters, but to
simulate actual wind/wave conditions.
By 2050, we expect all individual design aspects to
be coordinated and managed via multi-disciplinary
collaboration computer environments, and between
2020 and 2030, virtual and rapid prototyping tools
will become a standard module in the overall design
process, seamlessly integrated to all aspects of ship
design.
Benefits
Reduced emissions to air
Reduced impact on natural environment
Lower risk of environmental damage
Improved safety, transport cost and cost
of material damage
Lifecycle model for operational
optimisation and maintenance
56 THE FUTURE OF SHIPPING
PATHWAYS ADVANCED SHIP DESIGN
Energy eicient design
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Energy eficiency will continue to be a principal
driver for the evolution of ship design. The
introduction of new technologies, which will be
facilitated by virtual ship laboratories, will play a
major role in improving vessel energy eficiency. At
present, there are two technology categories that will
impact upon energy eficient design: technologies
that minimise fuel consumption, and technologies
that minimise the overall energy demand of the
vessel. The irst category usually involves machinery-
related technologies, while the latter is related to the
hull.
Traditional ship design practices will undergo a
dramatic change as new technologies are adopted,
leading to modiications in hull forms, new types
of propellers, the disposition of machinery and
how ships are outitted, among other beneits. Key
technologies used to optimise energy eficiency
are expected to emerge in the areas of vessel
hull and hydrodynamics, bio-inspired processes
and components, electriication, as well as energy
harvesting, recovery and storage.
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
EQRbling technologies
It is expected that electric propulsion will be
commonplace for many ship types by 2020. While
challenges related to safety, reliability, initial capital
outlays and electric power train eficiency have
slowed the uptake of electric propulsion, the further
development of direct current (DC) grids on-board
vessels, which will allow generators to operate at a
variable speeds delivering optimal fuel consumption,
will help to address some of these issues.
Likewise, energy storage provides beneits in
relation to power availability, emergency power
and redundancy as well enabling easier utilisation
of renewable energy sources. At present, electricity
storage in batteries has had few marine applications,
with the exception of a few smaller passenger ferries,
which use electricity as their principal power source.
So far, the cost, life cycle and size of the batteries
have restricted their use. But with prices expected
to fall by approximately 50 per cent per kWh by
2020, this could change, and we could see larger
vessels incorporating them as part of a hybrid power

"...developments in energy harvesting and recovery are expected to facilitate more energy
efficient vessel designs, capable of utilising every possible energy source on-board..."
solution. Super-capacitors, which store energy by static
charge and provide faster charging times, longer life
cycles and increased safety, are another intriguing
development in electric propulsion, assuming their
cost and size can be brought down enough to make
them viable.
At the same time, developments in energy harvesting
and recovery are expected to facilitate more energy
eficient vessel designs, capable of utilising every
possible energy source on-board while minimising
energy loss a key step towards sustainable shipping.
Energy can be harvested from thermal, solar, wind
and mechanical energy sources and stored for later
use. Also, by utilising the waste energy of a power
production system, owners can improve energy
eficiency. The most common method of recovering
energy today is waste heat recovery systems, but in
time, low temperature recovery systems will be also
become available.
Technologies and tools
Ergonomic and integrated bridge
control systems based on global
standards
Satellite and communication
technology to track and monitor
vessel trafic
Surveillance and navigation
technologies (monitoring, AIS,
radar, laser, electronic maps)
Sea Trafic Control (STC) system
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 57
Finally, a broad range of hull and hydrodynamic
improvement devices will increase in scope and
distribution, becoming standard features in most
future ship designs. By improving water low around
vessels, resistance and power needs can be reduced,
signiicantly improving energy eficiency.
E TUVWXVd developments
As systems for electriication and DC grids are
improved, we anticipate that such systems will
apply to a growing percentage of the world leet
in the years ahead. In addition to existing energy
storage systems, heat storage technologies, already
implemented on land, could also become an option.
For energy recovery, both high and low temperature
heat recovery should be integrated to ship machinery
as standard features, leading to expected eficiency
gains of around 8 to 15 per cent. Energy harvesting
technologies will gradually appear in ships.
Benefits
Increased effect and precision
of safety and eficiency performance
Increased feed-back loop with regards
to integrating human and organisational
elements in design and improvements
Increased awareness of tasks and
operations that are being performed
Reduced disruptions in operation
58 THE FUTURE OF SHIPPING

PATHWAYS ADVANCED SHIP DESIGN

Next generation emulation

Impact level: None Low Medium High

CO2 SO x NO x Invasive Recycled Oil spill Lives lost Freight Insurance

emissions emissions emissions species materials at sea cost claims

Emulation is the ability of a programme or device to
mimic the behaviour of another device or system,
recreating its look and feel in a controlled, virtual
environment. In the maritime industry, emulation
is currently used mainly for bridge operations and
machinery room training. An ideal next-generation
emulator would provide the user with identical
conditions to those that they would experience on a
vessel during its operation, survey or repair.
This could encompass visual identiication (e.g. cracks,
corrosion), risky areas (e.g. open manhole), realistic
sound conditions (e.g. engine malfunction), realistic
light (e.g. tank inspections), smell, and so on. Such
technology could be used for various purposes,
including monitoring, maintenance and crew training,
with each aspect taken into account early in the vessel
design phase.
EYZbling technologies
Next generation emulation will require more
advanced virtual reality systems, a technology that
creates a 3-D computer-generated environment that
a user can explore and interact with. These virtual
environments can be projected on screen, or through
a head-mounted-display, allowing complete sensory
immersion.
To date, virtual reality technologies have seen limited
use in some maritime simulators, allowing trainees to
acquire virtual experience across the whole range of
vessel operations and maintenance, normal operation,
repairing, surveying as well as risk management,
emergency and evacuation procedures. Information
from such applications can be used as input in the
design phase, optimising the safety, ergonomics and
eficiency of vessels.
In addition, emulators of the future will be equipped
with haptic technologies, which provide tactile
sensations for a user through the application of
mechanical load (forces, rotation, motion, etc.).
This enables the user to connect an action to a
consequence not just visually, but through touch,
enhancing the users sense of realism in virtual
environments. A maritime application would not only
give trainees a sense of realism, but also provide a
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 59

"Emulation is the ability of a programme or device to mimic the behaviour of another device or
system, recreating its 'look and feel' in a controlled, virtual environment"

better experience when identifying degraded material E [\]^_]d developments

through physical control (e.g. knocking), or in avoiding Todays virtual reality technology caters for only two
areas, such as corroded loors, where potential human senses (sight and hearing). By improving this
accidents could occur. Haptic technologies will also be sensual interaction and introducing more senses,
applied in real bridge designs to provide feedback to such as touch (haptic technologies) and even smell,
the operator. the virtual reality experience can be greatly enhanced
to create a real world environment. Meanwhile, the
Virtual reality systems equipped with haptic proliferation of 3D-scanning technology will allow for
technologies will rely on 3D graphics, which render simpliied vessel 3D modelling, resulting in usable
objects in three-dimensional graphics. The process representations of actual working environments.
involves 3D modelling (making an objects shape),
animation (the motion of the object), and 3D rendering
(the calculations required to provide the inal image,
taking into account surface material properties,
light and other parameters). All of these areas have
undergone huge advances over recent years, with
systems now capable of incorporating any variable to
focus on the intended application, such as the effect
of corrosion on marine structures for virtual survey
software.

Technologies and tools Benefits

Advanced three-dimensional graphics Improved training of crew under a

(modelling, rendering and animation) broader spectrum of extreme and
Tools for exploration and interaction
adverse conditions
Improved safety
Soft-sensing and augmented reality
(smell, sound, light etc) Reduced costs related to damages
Haptic technologies (forces, rotation,
motion, etc)
3D-scanning technology
60 THE FUTURE OF SHIPPING
ADVANCED SHIP DESIGN
A POSSIBLE FUTURE
Collaborative design efforts across
geography and diciplines
Electriication and DC-grid technologies
for short sea and offshore vessels
TODAY
Advanced ship design is expected to play a large
role in future marine technology development.
Already, the ship design process has beneitted from
developments in advanced computing and software
engineering. Many of the technologies proiled
in this pathway are being used by other industry
segments and are likely to be adopted by the
shipping industry within the next decade.
We believe that the virtual ship laboratory will
not only have an impact on how ships are built,
but how the industry functions. Already, different
stakeholders, such as shipyards, manufacturers,
system integrators, ship designers, operators and
class societies are working together to develop
systems to enable the virtual ship laboratory.
CFD siginiicantly affecting advanced ship
design including modelling of wind and waves
Next generation hull and hydrodynamic
improvement. Bio-inspired prototypes
Increasing systems complexity requires a shift to
multidisciplinary collaboration in ship design. If the
development process continues as expected, the
virtual ship laboratory will gain full maturity by 2030,
becoming the standard work process for designing
ships.
The future development of energy eficient design
solutions will be more varied. Some of the energy
eficiency improvement technologies have already
been embraced by the shipping industry, while
others are expected to have a longer incubation
period. Speciically, electriication, electric storage
and hull hydrodynamic improvement technologies
are likely to develop rapidly, with the irst
commercially available solutions emerging by 2020

Gradually introduction of technologies for
energy harvesting, recovery and storage
Emulation using virtual reality
techniques widely used in shipping
and more mature systems available by 2030. On the
other hand, energy harvesting and recovery (as well
as bio-inspired technologies) will enter a prolonged
experimental development phase. Limited numbers
of full-scale prototypes are not expected to appear
before 2030 and mature systems will probably not
be available until 2040.
Emulation technologies already play an important
role in many industrial segments, and have broad
applications for shipping. Similarly to the virtual ship
laboratory, advances in both computer software and
hardware will accelerate the uptake of emulation
technologies. We expect the irst full-scale integrated
emulators will not appear before 2030, and will not
reach maximum maturity until 2050.
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 61
Shutterstock
Virtual ship laboratory as an integrated
approach to design of vessels
Full DC electric propulsion concepts
in short sea and offshore
2050
These technologies will develop at different
speeds, but they will all contribute both directly and
indirectly to a more sustainable industry. The virtual
ship laboratory and energy eficient design solutions
will help the industry reduce its environmental
footprint, and by increasing eficiency, will help to
keep transport costs per unit within acceptable
boundaries. The technologies required to develop
virtual ship laboratories and emulation will also
have a signiicant impact on both safety (safe-by-
design solutions) and costs related to damages.
Assuming these technologies develop as expected,
we are conident that advance ship design will have
an enormous impact on almost every aspect of
shipping.
62 THE FUTURE OF SHIPPING

THE CONNECTED SHIP

Developments in ICT will have a profound effect on the shipping industry. Data-driven,
Internet-based models will mirror physical assets, providing new ways for owners
and managers to analyse ship functions to signiicantly improve eficiency and safety
performance. Similarly, advances in automation and remote operations will shape the
ways ships are designed, built, and operated. Sensor technologies and monitoring
systems, combined with seamless ship-shore connectivity and software-enabled
decision support tools, will create a more data-centric, responsive and lexible industry
that is fully integrated with global transportation networks.

Today, we live in a world that is continuously
becoming more data-driven and automated, where
physical systems and people are increasingly
connected and mirrored into a virtual space. Key
developments in ICT include sensor technologies,
improved ship-shore connectivity, advanced software
tools and algorithms, increased computing power
and faster processing times. ICT has also enabled
more far-reaching concepts (e.g. big data, Internet
of Things, cloud computing, etc.) which will provide
the shipping industry with new ways to collect, store
and process valuable data.
T`c cjkqosy drives innovation
Advances in ICT have occurred so rapidly that they
have outpaced existing systems used by the shipping
industry to manage a broad range of challenges.
Indeed, as more and more land-based industries
adopt ICT systems to improve performance, the
shipping industry will be compelled to do the same.
In this way, the technology not the demand will
drive change in the shipping industry.
ICT will have a dramatic effect on how the industry
manages information. Most systems and components
will be linked to the Internet, making them accessible
from almost any location. This connection enables
a virtual reality made up of data, models, and
algorithms, embedded in software, databases and
information management systems. At the same time,
by combining data streams from multiple sources,
the sheer volume of information available will enable
the industry to make more informed decisions,
faster, leading to more eficient and responsive
organisations. In time, these databases will be
accessible through vast information management
systems combined with fast computing and
advanced software via distributed networks.
The application of ICT on ships will also have a
positive impact on safety at sea. In fact, ICT solutions
can provide control over the status of degradable
systems, increase situational awareness and human
reliability, support in the deinition of corrective
actions, and the reduction of operational risk. More
automated operation will help reduce human errors,
while remote operations may lead to a reduction of
the number of people serving at sea. Finally, while
enhancing safety and eficiency, ICT will also answer
the need for more transparent operations and
help build trust and collaboration between various
industry stakeholders, based on the collection of
objective facts.
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 63
Growing complexity
To realise the potential of the connected ship,
different stakeholders must manage a broad range
of challenges, including the growing complexity
of systems, data networks, sensor technologies,
systems integration, tools to manage increasingly
large volumes of data, and processes to ensure
software integrity and data security. Furthermore,
the adoption of any new technology requires users
to change existing behaviours and develop the right
competencies. In our view, the impact of ICT will be
far-reaching and develop quickly. However, it will
most likely take some time before legacy systems
now used by the shipping industry are replaced.
ICT may also challenge traditional competitive
business models, which often act as a barrier to the
sharing of information. Certainly, owners will have to
invest in systems to protect and secure sensitive data
and the integrity of software systems, but the full
beneits of this technology cannot be fully realised
unless the industry learns to be more transparent
and cooperative.
Towards smarter operations
For the shipping industry, ICT will change how ships
are designed and built, what materials are used,
how ships are operated and how shipping its into
the global supply-chain logistics network. These
issues are covered in other parts of this report.
In this section, we will focus on two other areas
where we believe ICT is likely to have a big impact:
smart maintenance and automation and remote
operations.
As advanced real-time condition monitoring
becomes a reality, asset maintenance will broaden
to allow owners to assess vessels in a life-cycle
perspective. Today, some engine manufacturers have
systems in place to collect maintenance data, which
they can analyse and use to recommend actions. In
time, manufacturers, system integrators and related
service providers will be able to support owners
with real-time critical diagnostic and prognostic
information about the conditions of various on-board
systems, providing speciic guidance to maintenance
crews via virtual-space software and hardware.
As sensor technologies and connectivity become
more robust, remotely operated vessels, or even
unmanned vessels, could become a reality. We are
also likely to see many of the traditional activities
performed on-board shifted to shore-based centres,
responsible for vessel condition monitoring, control
and logistics.
64 THE FUTURE OF SHIPPING

PATHWAYS THE CONNECTED SHIP

Smart maintenance
Impact level: None Low Medium High

CO2 SO x NO x Invasive Recycled Oil spill Lives lost Freight Insurance

emissions emissions emissions species materials at sea cost claims

Smart maintenance systems will enable owners to
reduce the number and frequency of inspections
and repairs and allow them to anticipate and replace
damaged and worn parts with minimal resources and
downtime. With real-time access to a vessels current
and future status, maintenance personnel will have
more accurate information on system capabilities,
allowing for timely action to increase reliability, safety
and eficiency.
Smart maintenance systems support eficient
fault detection and proactive planning in order to
optimise the maintenance processes. They also
serve as valuable decision support tools, enabling
owners to make more intelligent, informed decisions
based on the assessment of the present, and future,
condition of the vessel. Furthermore, by sharing
information, owners and suppliers alike can reduce
supply chain costs.
Counectivity fast computing,
big data and the cloud
To achieve the full potential of smart maintenance,
further development of a number of technologies
is necessary. In many ways, smart maintenance is
a function of predictive data that can indicate a
developing failure. Therefore, smart sensor networks
will be critical, as their ability to work together offers
a detailed and accurate picture of various systems.
Moreover, these sensors will be able to react to
changes in their surrounding environments and
reconigure themselves in order to perform multiple
types of functionalities. When linked together, sensors
can automatically organise to form a collaborative
network that provides more accurate and detailed
information.
In turn, smart maintenance will rely not only on how
sensors are conigured and linked, but also on the
quality of ship-shore connectivity. That is, due to
limited storage and processing power, data cannot be
stored indeinitely on-board. Rather, data must be sent
to shore, where it will be managed by increasingly
sophisticated software tools. These tools will provide
full range analytics and visualisation capabilities, and
be seamlessly linked to on-board sensor and actuation
devices via the internet.

"...advances in algorithms and software tools to effectively manage vast amounts of data will
enable a dramatic shift in how the industry approaches maintenance"
Data analysis systems may also rely on other
technologies, such as cloud computing, (the ability
to run software on many connected computers at
the same time) and algorithms for the analysis of big
data, which require new forms of processing to extract
timely and valuable information. Cloud computing
and big data will revolutionise vessel operations
and how decisions are executed, allowing different
stakeholders to access vital information in a fraction
of the time needed today and answer increasingly
complex questions. While all these technologies exist,
more work is required to adapt them to the maritime
environment.
Migrating to real-time,
risk-based maintenance
The development of smart sensors, ship-shore
connectivity, databases and information management
systems will be essential enablers for smart
maintenance. That is, moving from the existing
Technologies and tools
Satellite and communication
technology
Condition monitoring technologies ,
smart sensors networks and actuators
Data storage and software algorithms
to process large amounts of data for
decision support
Distributed and cloud computing,
(the ability to run software on many
connected computers at the same
time)
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 65
scheduled maintenance approach, a process often
driven by supplier recommendations, to condition-
based maintenance, a process driven by the actual
condition of on-board components and systems, will
signiicantly reduce costs related to maintenance and
improve safety performance.
Condition-based maintenance will enable relevant
personnel to more effectively address the correct
timing and quantity of maintenance for speciic
monitored components. And as experience with
such systems grows and more data is collected on
failure processes, the accuracy of both diagnostic and
prognostic algorithms will improve signiicantly. In
time, these improvements will enable more proactive
risk-based maintenance, where the health status
of components is evaluated in real-time, allowing
personnel to take action to maintain or reduce the
systems risk level.
Benefits
Diagnostics, prognostics and risk tools
Increased safety and reliability and industry
transparency
Reduced number and frequency
of inspections and repairs
Improved spare parts exchange
and logistics
Reduced costs related to maintenance and
downtime and to preserve asset value
Improved design
66 THE FUTURE OF SHIPPING
PATHWAYS THE CONNECTED SHIP
Automation and
remote operations
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Over the last decade, expanding computing power
and faster processing times have outpaced the ability
of humans to manage complex systems effectively.
Indeed, computers are much more effective
at managing low-level intensity situations (e.g.
monitoring engine performance), than humans, and
have proven effective in supporting personnel during
high-intensity events (e.g. anchor handling). In other
industries, more and more systems are automated or
controlled from remote locations.
Over the next decade, it seems likely that the shipping
industry will increasingly look to the offshore industry,
which has developed a number of automated systems
with marine applications, to improve performance.
And while the idea of remotely operated vessels
remains controversial, the development of such
systems will not be limited by technology. Rather,
the industry will have to weigh the beneits of remote
operation, which include reduced manning costs,
increased safety and improved vessel condition,
against their perceived risks.
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
The ship gets a nervous system
The use of sophisticated robotics and automation is
now commonplace for many land-based industries,
particularly in manufacturing. In the past decade, we
have seen the deployment of a number of unmanned
autonomous and remotely operated vehicles,
including Unmanned Aerial Vehicles (UAVs), Remote
Operated Vehicles (ROVs), and the development of
driverless trucks and autonomous cars.
For shipping, remote operations will require
automation of the engine and other integrated
systems, alongside advanced navigation systems and
sophisticated software that can manage smart sensor
and actuator networks, maintain a vessels course in
changing sea and weather conditions, avoid collisions,
and operate the ship eficiently, within speciied safety
parameters. This system will also rely on robust and
secure communications via satellite and land-based
systems. The on-board ship control and decision
management system can be adjusted to allow
different levels of autonomy, but with further advances
in these enabling technologies, we can imagine a
completely autonomous ship that reports to shore-

"Over the last decade, expanding computing power and faster processing times have outpaced
the ability of humans to manage complex systems effectively"
based operators only when human input is
needed or if emergency situations arise.
The advent of onshore control centres
Shipping will beneit from developments in the
offshore, aviation, aerospace, and automotive
industries which have been the primary drivers for
advances in automation and remote operations.
Shipping will likely apply these technologies to
instrumented machinery irst and then gradually to
vessel navigation, which will be operated remotely
from shore-based centres. These solutions will
increasingly rely on sensor technologies and
computers to manage on-board systems from
remote locations. As more on-board systems
become automated, the number of on-board
personnel will be reduced, and more decisions
will be made from shore-based control centres.
Technologies and tools
Satellite and communication
technology
Sensors, automation and
monitoring technologies
Surveillance and navigation
technologies (monitoring, AIS,
radar, laser, electronic maps)
Software algorithms for analytics
and decision support
Robotics, smart materials and
automated maintenance
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 67
Onshore control centres will be responsible for the
condition management of the ship and risk related
to the failure of on-board equipment or broken
communication links. These control centres will be
responsible for operating vessels in congested sea
lanes, or in proximity to ports and terminals, and in
emergency situations. To manage these tasks, control
centres will be equipped with system simulators
designed to select optimal routing procedures and
interfaces with land-based supply chain networks. As
with many emerging technologies, the ability of the
system to manage the interaction between man and
machine will be critical. Such systems should provide
accurate representations of risk and allow humans
to take full control of vessels from a remote location,
when necessary.
Benefits
Improved safety performance
Reduced manning costs, fatigue
and routine tasks workload
Improved operational eficiency
Improved quality management,
monitoring and reporting
Increased reliability, risk awareness
and responsiveness
68 THE FUTURE OF SHIPPING
THE CONNECTED SHIP
A POSSIBLE FUTURE
Monitoring of ship machinery components by
sensors enabling condition based maintenance
Maintenance data gathered from operations
as part of input to the design phase
TODAY
The steady advance of ICT and access to
vast amounts of data will continue to drive
unprecedented human connectivity. For the
shipping industry, the digital age will open up a new
landscape of opportunities to get smarter. In the
short term, several relatively minor subsystems in
ships are expected to grow more automated. One
such important system is instrumented machinery,
which can be monitored from a centralised, shore-
based data centre. At irst, maintenance and logistics
planning may be performed by human analysts,
but over time, these tasks will increasingly be
handled by computers, which will make decisions on
maintenance, ordering parts and scheduling work.
Today, some manufacturers offer systems to monitor
on-board conditions. This process is likely to become
Introduction of performance-based agreements
where OEMs take responsibility for maintenance
Use of prognostics for maintenance scheduling and to
determine the remaining useful life of components
more mainstream in the next decade and, by 2020,
data collection from machinery will be performed
on advanced ships, such as offshore vessels. Data
collected on-board will be used for diagnostic
testing to determine the condition of various
components and if they need to be inspected,
overhauled, or replaced.
The irst prototype of a fully autonomous ship may
appear as early as 2015, with fully automated ships
entering the market by 2025. In 2035, many types of
ships may routinely be delivered with autonomous
operation capabilities. At the same time, ports will
have more automated systems for the loading and
unloading of cargo. If so, it is conceivable that some
segments, like container transportation, may be fully
automated by 2050.
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 69

Risk based maintenance based on accurate Robots will be used for many maintenance tasks,
real-time data integrated into risk models like painting and faulty components substitution

Design for maintainability will be Introduction of remotely controlled ships

integrated into the lifecycle design of ships and in some cases fully autonomous ships

2050
Other expected developments include collaborative
software tools to enable seamless co-ordination
between various stakeholders, on-board robots, "In 2035, many types of ships
modular designs, autonomous decision support may routinely be delivered with
systems, and tools for virtual operations, such as autonomous operation capabilities"
virtual surveys, virtual guidance from land-based
operators, etc. While the deployment of ICT in
shipping is likely to reshape established business
models through more data-centric and more
collaborative, extended value chains, we believe that
these technologies will enable safer, smarter and
greener operations and maintenance procedures.
70 THE FUTURE OF SHIPPING

FUTURE MATERIALS
Imagine a ship with self-healing skin, capable of continuously adjusting to changing
sea and wind conditions, one that can generate its own energy and is equipped with
embedded sensors that can provide real-time information to the bridge and shore-based
facilities. Thanks to the developments in materials technology, these and other beneits
will have an enormous impact on shipping, enabling new vessel concepts, saving energy,
minimising maintenance, and extending the life cycle of vessels by decades.

Today, many new materials are rare and expensive,
but further research and development as well as
introduction of new manufacturing methods will
bring these costs down, making these materials
available to the shipping industry in the decades to
come.
The revolution in materials technologies will have
an enormous impact on ships, allowing them to
carry more payload at the same displacement as
today, and at higher speeds using less energy. These
capabilities are not science iction; such a ship could
almost be built today with existing technology,
budget permitting.
Beyond steel
Since the late 19th century, steel has been the
primary material for shipbuilding. This essential
material is cheap and readily available. With a
global recovery rate of more than 70 per cent,
steel is also the most recycled material on the
planet. However, history suggests that signiicant
developments in materials technology can have a
dramatic transformative impact on the industry. Just
as steel replaced wood and the microchip replaced
the electron tube, emerging materials technology
will enable owners to produce safer, lighter and
maintenance-free vessels.
The shipping industry is increasingly looking towards
technology to manage stricter regulations, rising fuel
costs, tighter margins and increased maintenance
costs. At the same time, the industry is expanding
into deeper waters and operating in colder, harsher
climates, exposing their personnel and assets to
greater risk. Indeed, sub-sea activities are already
pushing the material properties of steel to their
limits. In order to take the next step within shipping
operations, new materials may be the only solution.
High cost, high reward
At present, new materials tend to be expensive
to develop and produce, and therefore require
signiicant capital to utilise. In addition, new materials
must compete with the steel industry, which
continues to produce steel with more strength and
less weight. Steel is cost-effective, versatile and easily
recycled, and because it remains a preferred material
for shipbuilding, it will take some time before new
materials can begin to replace or augment it. At the
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 71
same time, shipyards are conigured for steel mass-
production, and there are no signs indicating that the
mainstay of ship structures for most segments will
change in the foreseeable future.
As with many other technologies adopted by the
shipping industry, future materials are likely to be
developed, tested and used by other industries
(e.g. aviation, aerospace and automotive) before
being applied to the merchant leet. Innovation in
the shipping industry is often slowed by high unit
investment costs, uncertainties related to the global
availability of new material, competence necessary
for maintenance, short ownership horizons and asset
play in a compliance-driven industry.
Future materials solutions
Materials impact upon safety, the environment and
commercial sustainability. For example, dangerous
materials, such as asbestos, PCB and lead are today
banned or strictly controlled to minimise risk to
seafarers. Materials with special properties are also
important to ensue hull integrity and therefore the
safety of the crew. Environmental performance can
be inluenced by the properties of various materials
and surface quality, helping to reduce fuel usage and
extending the life of a ship. Issues such as insulation,
heat absorption, energy generation and preservation
are all related to materials technologies.
The industry continues to seek alternatives to steel
to produce lightweight ships, which reduce fuel
consumption, corresponding emissions and speed,
impacting upon competitiveness. Developments
in composites and aluminium have been utilised
in some segments, but these materials currently
have no viable application for deep-sea shipping.
For example, the use of glass ibre reinforced
composites is currently very limited in deep-sea
shipping, due to SOLAS requirements on ire
performance. However, as equivalent ire safety
measures are applied to composites, we may see
more interest among owners.
In this section, we have identiied three promising
future materials, and how they might be applied
to the shipping industry: lightweight materials,
intelligent materials and powerful materials.
72 THE FUTURE OF SHIPPING
PATHWAYS FUTURE MATERIALS
Lightweight materials
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Ultra-strong, lightweight materials will ensure safer,
lighter and more robust structures that will improve
range, payload, fuel consumption and operational
expenses for ships at sea. As we have seen in the
defence industry, Glass Fibre Reinforced Plastics
(GRP) and aluminium are being used on increasingly
larger warships, subject to strict naval regulations and
standards, and increasingly on major components in
the civil maritime industry. Further developments in
lightweight materials will allow for operations in more
extreme conditions and extend the lifetime of a vessel
signiicantly.
Evwbling technologies
Graphene, the irst ever two-dimensional material,
was discovered around 10 years ago. Made up of
one-atom thick layers of carbon, a single strand of
graphene is the thinnest material ever observed. Up
to 200 times stronger than common steel, graphene
is lexible, light, nearly transparent and an excellent
conductor of heat and electricity. As it is both stronger
and stiffer than any known material, it could be used
to manufacture products and structures that would
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
be a fraction of the weight and exponentially stronger
than anything produced today. Graphene could also
be used to strengthen polymer or metal composites.
Another exciting development within the ield of
lightweight materials is 3D woven fabrics. Until
recently, the increasing application of composites to
make structures lighter and more corrosion-resistant
has been slowed by the ineficient manual joining
processes used today. Improving the reliability and
eficiency of composite joining processes requires
replacing traditional hand-lay-up processes with
new 3D weaving technologies. The new approach
to joining structures signiicantly simpliies the
complexity of parts and reduces the number of
components used, dramatically improving the viability
of composite lightweight solutions.
Aluminium oxynitride or AlON represents another
promising development in lightweight materials. Once
considered science iction, lightweight transparent
alumina is now a reality. AION is a transparent
polycrystalline ceramic that is optically transparent
and about three times harder than steel of the same

thickness. The material remains solid up to 1200C,
and has good resistance to corrosion and damage
from radiation and oxidation. Typical applications are
domes, tubes, transparent windows, rods and plates.
Finally, the introduction of metal foam will change how
ships are designed, constructed and operated. Metal
foam dramatically improves the weight-to-stiffness
ratio, energy dissipation and it will have a positive
effect on a vessels vibration, thermal, and acoustic
performance. Another advantage is the mitigation
of buckling, both for rods and plates, which will help
improve safety and reduce maintenance costs. Metal
foam decreases density and weight while increasing
apparent thickness - a new design variable in steel
material selection.
By controlling density, the properties of steel
components can be signiicantly modiied, expanding
design space for steel applications towards more
collision resistant structures. Properly constructed,
foamed components can have higher bending stiffness
and weigh less than solid steel. A sandwich panel with
steel faces of one millimetre with a 14 mm metal foam
core has a comparable bending stiffness of a 10 mm
solid steel plate, at merely 35 per cent of the weight.
Technologies and tools
Glass Fibre Reinforced Plastics (GRP)
Aluminium
Graphene (one-atom thick layers of
carbon)
3D weaving technologies for
composites
Aluminium oxynitride, AlON
(transparent alumina)
Metal foam
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 73
E ypected developments
In less than 10 years, graphene has gone from the
lab into pilot products all over the world. Recent
developments in graphene production methods
indicate the feasibility of mass production from
numerous raw materials, including environmentally
friendly and relatively low-cost chemicals. For joining
technology, adhesive bonding is common today, but
one should see more widespread use in lightweight
structures not only for composite structures but also
steel.Weaving technology, perhaps in combination
with 3D printing, will also be used to ind solutions
for structural damage repair. Future applications for
AION include sensor windows, transparent armour,
insulators and heat radiation plates, opto-electronic
devices, metal matrix composites, and translucent
ceramics. In the future, cruise ships may have large
structures made of transparent alumina to provide
passengers with better views while staying in
compliance with strength integrity regulations.
Benefits
Lighter structures and reduced fuel
consumption
Less need for ballast
Increased speed
Safer structures
Improved noise and vibration properties
Improved corrosion-resistance and reduced
maintenance
Extended lifetime
Allow operations in more extreme conditions
74 THE FUTURE OF SHIPPING
PATHWAYS FUTURE MATERIALS
Intelligent materials
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Intelligent materials offer a broad range of beneits
to the shipping industry. Structures embedded with
millions of miniaturised smart sensors can generate
vast amounts of information, which can be streamed
to relevant onshore personnel. Friction-reducing riblet
technologies not only reduce drag, but also help
to mitigate risks associated with the transportation
of invasive species from one ecosystem to another.
Some intelligent materials are self-healing, able to
sense cracks or failures before damage occurs, while
functionally graded materials will contribute to the
increased lifetime of vessels by eliminating corrosion
and metal fatigue.
Ez{bling technologies
Self-healing materials are deined by their ability
to detect, heal and repair damage automatically.
Different types of materials, such as plastics, polymers,
paints, coatings, metals, alloys, ceramics and concrete
have their own self-healing mechanisms. Some
materials may include healing agents, which are
released into the crack-plane through capillary action.
When a crack ruptures the embedded microcapsules,
a polymerization process is triggered, bonding the
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
crack faces. This technology can be utilised on any
surface on a ship, including tanks and hard-to-reach
structural areas.
Materials of the future will also have sensing
capabilities that will allow them to provide information
about their immediate environment and their own
condition. Relevant sensing technologies include
laser-based interferometry, LED-based optical sensors,
spectroscopy and spectrophotometry. Advances in
production will allow sensors to be manufactured
on a microscopic scale. Today, sensors can measure
as small as 0.05 mm by 0.05 mm, but as new
manufacturing techniques are developed, they will
become even smaller.
Intelligent materials also include smart coatings, which
incorporate functional ingredients such as nano-
particles, micro-electromechanical systems (MEMS)
and Radio-Frequency Identiication (RFIDs), among
others. These technologies enable self-repair, self-
healing and sensing. In the future, smart coatings may
incorporate pH sensitive microcapsules for corrosion
monitoring and deliver corrosion inhibitors. Likewise,
work to develop and produce smart dust a network

of microscopic wireless MEMS sensors may provide
a whole range of beneits to the shipping industry.
These microscopic sensors act like computers that
function together as a wireless network. Applications
related to the maritime industry include tracking of
sea surface temperatures and circulating currents, or
monitoring of the corrosion rate of hull structures.
Over the past decade, researchers have turned to
the natural world for inspiration in developing smart
materials. For example, studies have shown that the
unique properties of shark skin not only reduce drag
by 10 per cent, they also hinder microscopic aquatic
organisms from adhering to the shark. Riblet surfaces
are made up of very small grooves with sharp ridges
aligned with the mean low. Reducing friction is
achieved by the reduction of the turbulent span-wise
motion near the wall. Developments on mimicking
the properties of shark skin riblets may soon lead
to coatings that would reduce drag and limit the
bio-fouling on surfaces, and prevent transportation
of biological substances. The industry is also likely
to beneit from developments in functionally graded
materials. These types of materials have properties
that change with location, e.g. surface properties are
different to core material properties. Functionally
graded materials may be used to inhibit the
Technologies and tools
Self-healing properties
Sensing capabilities (microscopic
sensors, LED-based optical sensors,
MEMS, RFID)
Nano-technology
Smart dust a network of
microscopic wireless sensors
Functionally graded materials
(properties that change with location)
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 75
development of cracks, which can occur in engines,
hulls or other vital parts of the ship. They can also
have a unique ability to act as a thermal barrier, ideal
for use on structures or engine parts exposed to high
extreme temperatures.
E |pected developments
While many smart materials already exist, further
research and development is required to reduce
manufacturing costs. For example, functionally
graded materials remain prohibitively expensive
due to existing limitations of the powder processing
and fabrication methods. Solid, freeform fabrication
techniques such as 3D printing offer greater
advantages for producing functionally graded
materials, but more work needs to be done.
Advances in sensing technologies will allow more
sensors to be manufactured on a microscopic scale.
While it is still unclear when these technologies will be
commercially viable, future materials will have sensing
capabilities allowing them to provide information
about their condition and the immediate environment.
In this context, the two technologies that have the
potential to be used on a global scale, regardless of
material, are smart coatings and smart dust.
Benefits
Reduced hull friction
and fuel consumption
Increased lifetime
Reduced maintenance
Improved safety
Reduced transportation of invasive
species between ecosystems
76 THE FUTURE OF SHIPPING
PATHWAYS FUTURE MATERIALS
Powerful materials
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Developments in this ield will turn composite
structures into huge capacitors, powering a ship
using printable photovoltaic cells that cover the entire
ship exterior. Electric carbon nanotubes will carry an
immense amount of current and minimise energy
loss. Likewise, stricter environmental regulations may
encourage the development of both electrical energy
storage and on-board solar energy production, such
as printable plastic solar cells that can signiicantly
reduce energy consumption and reduce emissions.
Work is being focused on increasing the eficiency of
the organic thin ilm cells, while keeping the cost of
mass production low.
E}~bling technologies
Developments in carbon ibre and specially
formulated polymers have enabled light electrical
energy storage. The charge is stored electro-statically,
rather than as a chemical reaction. The energy device
then behaves more like a capacitor, or ultra-capacitor,
than a battery. The device can store and discharge
electrical energy in addition to being strong and
lightweight, suitable for use in structures.
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
For power generation, the industry may turn to
printable plastic solar cells. Solar cells can be printed
directly onto steel or other surfaces, acting as
photovoltaic material made from semi-conducting
polymers and nano-engineered materials. The active
material absorbs photons to trigger the release
of electrons, which are then transported to create
electricity. Photo-reactive materials can be printed
or coated inexpensively onto lexible substrates
using roll-to-roll manufacturing, similar to the way
newspaper is printed on large rolls. The process is
non-toxic and environmentally friendly, and because
its conducted at low temperatures, it is less energy
intensive than other production technologies. The
process is ive times more affordable than producing
traditional solar panels and has the added beneits of
being lightweight, versatile and lexible. In the future,
we may see large areas of ship structures covered with
printable solar cells.
For the storage and transfer of energy, the shipping
industry will welcome developments in carbon
nanotubes. Unlike copper wires, these hexagonal
strand formations are 40,000 times thinner than a
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 77

human hair. Carbon nanotubes are ideal for use with

high voltage power lines. Mechanically strong, yet
lexible enough to be knotted or woven together into
long lengths of wire, they are capable of carrying about
100,000 amps of current per square centimetre of
material about the same amount as copper wires, but
at one sixth of the weight. Carbon nanotubes are able
to carry more electricity over longer distances without
losing energy to heat - a problem with todays electrical
grid and with computer chips. Since the nanotubes are "Solar cells can be printed directly
made of carbon and not metal, they dont corrode. onto steel or other surfaces, acting
as photovoltaic material made from
semi-conducting polymers and
Epected developments nano-engineered materials"
Electricity storage, solar cells and carbon nanotubes
are existing technologies, but more work is required
before they can be applied to the shipping industry.
However, it is likely that photovoltaic and battery
technology will soon be available to help power hybrid
engines. Also, the industry is likely to adopt relective
coatings for ships operating in temperate climates,
which will help reduce energy consumption and
corresponding emissions.

Technologies and tools Benefits

Composites for electrical energy storage Reduction in fuel consumption

Printable plastic solar cells Improved on-board power management
Carbon nanotubes (for transfer of energy)
Relective coatings
78 THE FUTURE OF SHIPPING
FUTURE MATERIALS
A POSSIBLE FUTURE
Composite superstructures common
in offshore and short sea shipping
Relective coatings for cruise ships in hot
climates to reduce energy consumption
TODAY
Developments in materials technology are likely to
have a profound impact on shipping. New material
solutions are needed to meet future environmental
regulations and to replace fossil fuels with renewable
energies.
Due to the number, diversity and complexity of
materials now being developed, it is dificult to
predict which, and in what order, solutions will be
available to the shipping industry in the decades to
come. However, by 2020 we expect the introduction
of lightweight structures and metal foamed sandwich
structures, nanotech coatings for the prevention
of marine growth on the outside of the hull, and
photovoltaic and battery technology development
for hybrid engines.
Printable photovoltaic cells covering
an entire superstructure and hull
First secondary structures made of hybrid
construction and metal foamed sandwich structures
In 2030, we are likely to see very large, lightweight
superstructures built on some ships (e.g. cruise
ships), while small and medium sized vessels made
entirely out of composites will begin to be more
common. Maintenance will be optimised using
massively distributed sensor networks, and more
ships will be equipped with carbon nanotubes and
micro-turbines with advanced alloys to reduce fuel
consumption. Also, spray-painted or printable micro
batteries will be available to generate energy and
supply energy to smart grids.
By 2050, the irst large all-composite commercial
ships will be constructed, while the use of hybrid
and metal foam sandwich structures will become
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 79

Shutterstock
Composite structures are inherent Super-smooth, bubble-emitting riblet coatings repel
capacitors that will act as huge batteries marine species and ice, and decimate hull friction

Introduction of cables with conducting Sensing and self-healing

electric carbon nano-tubes technology introduced

2050
more common. Smart materials will develop to the
point where vessels can be customised, designed
and fabricated in a fully digital value chain. More "New material solutions are needed to
and more ships will have spray-painted or printable meet future environmental regulations
micro-batteries to generate energy and supply and to replace fossil fuels with
energy to a smart grid. Nano-technology fuel cells
renewable energies"
and high-density energy storage materials will
enable ships to run entirely on renewable energy
and create zero emissions.
80 THE FUTURE OF SHIPPING

EFFICIENT SHIPPING
We can see how developments in alternative fuels, ICT, materials technology and
advanced ship design will enable more eficient ships. But until the industry works
with other stakeholders to address ineficient value chains and logistics networks, it
cannot capture the full beneit of any individual technology. To meet its sustainability
targets, the shipping industry must optimise shippings role in global transportation
networks by reducing costs per transported unit, increasing asset utilisation and
adopting new technologies and operating practices.

"Demand for seaborne transport is projected to increase, especially in intra-regional trades"
Shipping has capitalised on economies of scale
(cargo capacity) to become the most eficient form
of transport available to man. Yet a comprehensive
view of todays land-sea transportation networks
reveals signiicant potential to improve eficiencies
throughout the value chain. For the industry to
capitalise on this potential, the size, operations and
functionality of ships must be aligned with land-
based infrastructure and solutions, logistics systems
and supply chain management. Furthermore, with
rapid growth in inter-regional trade expected, the
industry can capture signiicant eficiency gains in
short-sea shipping.
Today, short-sea shipping is highly fragmented, but
with the development of improved ICT solutions and
industry consolidation, future supply chains will be
far more integrated. To achieve eficiency gains in
this segment, the industry and related stakeholders
must work together to reduce transhipment time and
costs through eficient terminal operations and port-
and hinterland structures.
The pressure to perform
Demand for seaborne transport is projected to
increase, especially in intra-regional trades. At the
same time, pressure from society on the shipping
industry to improve environmental performance
will grow. Eficient shipping will thus have a double
objective: To remain competitive, each player must
strive to reduce costs per transported unit. And to
satisfy sustainability requirements, more eficient
value chains for new and existing trades must be
developed, asset utilisation must be increased and
new technology and operating practices must be
adopted.
Breaking barriers
It wont be easy. The scale and complexity of
global transportation networks - a system that has
developed over many decades (if not centuries) -
makes it dificult and expensive to change. Legacy
industry practices, culture, and established supply
chains resist a quick ix, and for a system that
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 81
involves so many stakeholders, coordinated action
or synchronised behaviour represents a signiicant
challenge. Moreover, eficient shipping solutions
often rely on advanced ICT systems to optimise
logistics through the value chain. Yet todays systems
are fragmented, characterised by proprietary or
legacy systems, limited standardisation of data
formats, inadequate data sharing and poor systems
integration.
Today, individual players are more likely to
adopt minimum standards due to regulation and
competitive pressure in the absence of industry-level
requirements and incentives to improve eficiency.
As such, triggering the overall eficiency potentials,
a process that will require concerted efforts by
multiple stakeholders, will be dificult, as the value-
capture mechanisms for each player are complex
and uncertain. In many cases the greater good
will also require that certain stakeholders sacriice
some of their proits or beneits (or bargaining
power/control), which will of course not happen
without some kind of pressure or regulation. Finally,
improving logistics and value chain networks will
often also require the construction or expansion of
costly land-based infrastructure that may face local
opposition.
Harmonising the value chain
Assuming a continuation of the status quo (e.g.
that the industry is not subject to any systemic
upheavals or radical shifts), we believe that eficiency
improvements are still achievable by focusing on
the following aspects: economies of scale, which
refers to size of vessels, operational organisations
and supply chain networks, value chain eficiency,
which refers to improved operational lexibility and
optimisation, improved value chain integration and
information low, and more eficient and integrated
supply chain networks, and short-sea shipping,
which has a large potential for improvement through
improved cargo handling and modal shift eficiency,
local issues related to contract structures, and further
integration of supply chains.
82 THE FUTURE OF SHIPPING
PATHWAYS EFFICIENT SHIPPING
Economies of scale
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Economies of scale apply to multiple areas of the
supply chain network. In brief, by rightsizing
throughout the value chain, the industry can reduce
unit costs and transaction costs, increase bargaining
power and asset utilisation, achieve improved supply
chain integration, and capture eficiency beneits with
expanded logistics networks.
As we have seen in the past, ship transport is an area
that scales well, meaning that costs of constructing
and operating larger vessels does not increase in
proportion to the capacity. Furthermore, studies have
shown that even the largest vessels constructed in any
given segment are well under the maximum physical
or practical limits of existing design and technical or
structural parameters.
However, the advantages of increasing vessel capacity
vary from segment to segment. For example, while
increasing the size of bulk carriers and crude oil
tankers may generally offer lower sea freight unit
costs, history shows that vessels larger than the
established market standard will not be able to
capitalise on their theoretical advantage. This is due
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
to issues such as restricted port and terminal capacity,
inventory cost optimisation, limits to commercial
trading lots and systems, and the physical barriers
encountered by large ships transiting narrow canals or
straits.
On the other hand, container shipping has probably
not reached the point of maturity with a maximum
size. Indeed, upsizing cargo capacity has represented
a tremendous value to container shipping, where the
deployment of ever-larger container ships on primary
trades has improved the eficiency throughout the
entire value chain.
The industry would also beneit from larger
organisational units, both on a corporate level and
through pooling of resources, as we see in container
alliances. Horizontal integration increases
eficiency by improving organisational eficiency
and scale-effects in operations. Furthermore,
larger organisational units will have increased
bargaining power, a higher degree of integration
and harmonisation between different business and
systems, and it will also be more lexible, thanks to
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 83

"We expect significant increases in ship sizes employed in regional trades: as volumes grow,
larger vessels will be employed"

the ability to create a larger pool of assets that can Technologies to develop and improve organisational
be marshalled to meet the speciic transportation and supply chain integration economies of scale will
requirements of certain goods. require the further development of ICT and SCM
systems. Such systems will enable a higher degree
Economies of scale may also be achieved via of automation of terminal and port operations, the
the vertical integration in value chains. Vertical ability to track and trace goods, delivery of forecasts,
integration increases eficiency by allowing one synchronisation of logistics processes and modes to
organisation to take control of more than one link in achieve lean and agile logistics.
the chain, such as owning or operating both ships and
terminals or the logistics operations and warehousing
and terminal facilities, thereby reducing transaction Expected developments
costs. Vertical integration is supported by advances We expect signiicant increases in ship sizes
in ICT systems and Supply Chain Management (SCM) employed in regional trades: as volumes grow, larger
systems, which also improve competitiveness by vessels will be employed. For deep-sea trades, the
offering more diverse services. Vertical integration anticipated development is different: The dry bulk
may also be combined with efforts to achieve volume and container segments will continue to see ever-
increases to release regular scale eficiencies, which larger vessels entering into service. And as the scale
will in turn produce larger value chains. of these vessels grows, it will drive the development
of expanded port and terminal infrastructure, which
will in turn encourage the upsizing of land-based
Ebling technologies infrastructure. Further consolidation will increase the
At present, the physical/technical constraints on the size of organisations, while larger and more complex
size of ships have not been reached, although as and integrated value chains will play an increasingly
noted, limited port and terminal capacity (among other important role, particularly in the box trade and for
issues) acts as a cap on vessel sizes in many segments. inished goods.

Technologies and tools Benefits

Port and terminal capacity Improved local air quality

Further development of ICT and
supply chain management systems
Consolidation and pooling of ships
Containerisation of semi-inished
goods and high value raw materials
Automation of terminal and port operations
and lower pollution
Reduced freight costs per unit
Increased reliability of service
Higher asset utilisation in all
parts of the value chain
84 THE FUTURE OF SHIPPING

PATHWAYS EFFICIENT SHIPPING

Value chain eiciency

Impact level: None Low Medium High

CO2 SO x NO x Invasive Recycled Oil spill Lives lost Freight Insurance

emissions emissions emissions species materials at sea cost claims

Eficiency potentials in existing or new transport
chains can be realised by implementing systems to
improve how the different links in the chain interact.
Optimising value chain eficiency will require an
improved utilisation of ships and other infrastructure,
including reduction/elimination of waiting time,
removal of established practices and behaviours that
act as barriers for change, a reduction of transaction
costs and interface costs via ICT system compatibility,
supply chain management systems, terminal
operations and modal shifts. While the total cost
savings are dificult to estimate, some studies indicate
that the energy savings potential associated with such
logistics and supply chain improvements could reach
20 to 30 per cent.
Ebling technologies
While many of the systems, technologies and
solutions required to achieve improved value chain
eficiency are available, they will be dificult to
implement due to the number of stakeholders, legacy
systems and a perceived reluctance by value chain
owners to abandon existing practices. Nevertheless,
systems for the virtual arrival of vessels and for
pre-assigning slots would allow all vessels to sail at
the most economical speed instead of dashing to
the port to secure a spot in the queue. The direct fuel
savings from such an approach are substantial. Also,
such systems would allow cargo owners to reduce
warehousing costs and improve planning eficiency.
At the same time, further development of ICT systems
will address ineficiency related to transaction costs,
transit time, transparency, tracking and punctuality.
An enabler to this development will be the availability
of common standards for transparent supply chain
information available to all stakeholders. Finally, more
robust on-board ICT systems can provide veriied and
trusted data related to vessel operations that may
form the basis for performance-based energy eficient
operations and practices, contractual clauses that
stimulate and reward energy savings, and accurate
documentation of deviations that result in lost time
or higher costs.
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 85

"The capability to manage larger and more complex supply chains will increase substantially
due to the continued, rapid development of ICT and supply chain management solutions"

Epected developments
We expect that the capability to manage larger
and more complex supply chains will increase
substantially due to the continued, rapid
development of ICT and supply chain management
solutions. This capability will be a strong incentive
to realise economy of scale beneits by increasing
the vertical integration and develop leaner supply
chains. Naturally, the players with the largest
potential beneit will have the largest incentives.
If so, we anticipate that it will be the owner of the
value chain who drives this development. It should
be noted that characteristics of supply chains vary
considerably between shipping segments, so
whereas best-practice solutions will be outlined
or identiied, the actual application will vary,
depending on the needs of speciic segments.

Technologies and tools Benefits

Pre-assigned port slots Signiicant energy savings

ICT and supply chain management Reduced emissions
Improved local air quality
solutions
Sensor and communication
Reduced unit freight costs
technologies for tracking and
identiication of vessel and goods Improved reliability of service
Contractual clauses that stimulate and Improved utilisation of assets
reward energy savings
86 THE FUTURE OF SHIPPING
PATHWAYS EFFICIENT SHIPPING
Eicient short-sea shipping
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Perhaps more than any other segment, short-sea
shipping stands to gain by improving eficiency along
the lines described above. Towards 2050, global
seaborne trade will see a rapid growth of intra-
regional trade and (in relative terms), this will be much
higher than the growth in the deep-sea transport.
This trend will lead to new trade patterns and a
growing demand for new eficient shipping solutions,
including more eficient interaction between short-sea
and deep-sea shipping, inland shipping and rail and
road transport. Eficient short-sea shipping of unitised
cargo relies on the integration with other transport
systems in the value chain, from origin to inal
destination. These networks must factor in total lead
time, frequency and capacity of the transportation
adapted to the cargo volumes and capacity of
hinterland infrastructure, reliability of on-time delivery,
eficient port terminals, eficient pick-up and delivery
hinterland distribution networks from/to the ports
and cargo carriers (e.g. containers, pallets, trailers and
other standard units).
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
Ebling systems and technologies
Short-sea shipping can beneit from the utilisation of
a number of systems and technologies to improve
eficiency. These include technologies for more
effective modal shift (such as automated cargo
handling systems between ships and rail/truck, or via
a depot or port terminal), improved contract structures
that enable the integration of the supply chain both
through consolidation and vertical integration, and
more advanced ICT systems, including supply chain
planning and optimisation tools. However, unless the
infrastructure to support increased volumes is in place,
speciically referring to upgraded ports, terminals and
road and rail networks, these solutions will have
a limited total impact.
Expected developments
Development will be driven by competitive pressure
from road transportation, further developments in
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 87

"Efficient short-sea shipping of unitised cargo relies on the integration with other transport
systems in the value chain, from origin to final destination"

technology and government-driven regulations,

schemes and incentives. We expect that
development will mainly occur in regions with
large economic and population growth, densely
populated countries with inadequate inland
infrastructure (e.g. India, Vietnam) and in areas with
pressure on their hinterland infrastructure driving
schemes to change transport structure (e.g. Europe).

As many short-sea vessels trade in ECAs, we expect

the segment to be the irst to embrace new, low
emissions fuel sources such as batteries, fuel cells
and LNG. The segment will also employ more
eficient cargo handling systems, and new terminal
and crane solutions will allow for considerably higher
loading/unloading capacities, automated mooring
and in some ports, fully automated cargo handling.
We could also see the emergence of new solutions
for reducing costs and transit times via direct ship-to-
ship and ship-to-road transfer.

Technologies and tools Benefits

Technologies for more effective Reduced local pollution and lower

modal shift such as automated cargo
handling systems, and new terminal
and crane solutions
Improved contract structures
ICT systems including supply chain
planning and optimisation tools
emissions
Reduced freight costs per unit both for
sea transport leg and total supply chain
Reduced lead time and increased
reliability
Higher utilisation of ships and other
assets in the supply chain
More it for purpose, lexible ships
Increase asset utilisation, lower unit costs
 88 THE FUTURE OF SHIPPING
Shutterstock
EFFICIENT SHIPPING
A POSSIBLE FUTURE
New contracts and incentive schemes
between owner and charterer
Increased consolidation, pooling ships
in order to increase bargaining power
TODAY
Signiicant shipping eficiency improvements are
attainable without radical systemic changes to the
industry, utilising technologies and solutions that are
either available today, or that will be shortly. Over the
next decades, we expect the structure of shipping
to gradually shift towards a higher focus on regional
shipping, driven by continued economic growth in
Asia, leading to growing trade volumes in the region.
Port and hinterland infrastructure will require huge
investments; without these upgrades the shipping
eficiency improvements will be severely limited.
In our view, the largest eficiency improvement
potential is related not only to the relative size of the
value chain, but how it is structured.
By 2020, we expect to see more consolidation,
pooling of ships and other resources among ship
Regional shipping growing rapidly with
rising demand for feeder-size vessels
Integrated supply chains with transparent
information for all players in the chain
owners in order to reduce costs, and increase
lexibility and bargaining power. While port
development and investment projects will continue
to be slowed by politics and public opposition from
interest groups (particularly in Europe and the US),
development of test installations of highly automated
cargo handling systems will gain pace. Massive
investments in port and distribution infrastructure to
support the development of trade and consumption,
particularly in Asia and Africa, will emerge towards
2030. New terminal facilities will apply automated
cargo handling and terminal equipment.
Meanwhile, regional changes in economy and
production, consumption and transport of resources
will result in rapid growth in intra-regional shipping,
creating increased demand for vessels in all
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 89

Massive investments in port and distribution Equatorial trunk lines with megaships
infrastructure, particularly in Asia and Africa (30-35000 TEU) between trans-shipment hubs

New solutions allow handling of multiple Container and break-bulk terminals and
containers or mega-boxes in one move distribution network heavily automated

2050
segments operating within the regional logistics Large-scale consolidation will give highly automated
networks. Also, we expect more containerisation of and eficient logistics networks, driven by the
semi-inished goods and high value raw materials, intra-regional development in Asia, requiring new
which will lead to development of new solutions, specialised vessel types in all major segments.
based on standard container formats, to allow Eficient shipping is perhaps the most challenging
handling of multiple containers or mega-boxes. and complex pathway to sustainable shipping, but if
the industry and other stakeholders are committed
Due to the superior eficiency of large and fully to reducing the environmental impact of the entire
integrated supply chains, huge logistics networks transportation sector, it is a logical place to start.
will emerge by 2050, requiring a higher degree
of specialisation in all ship segments. As ships are
more speciically tied to value chains, this will take
much of the volatility out of the shipping markets,
and will also shrink the market for traditional asset
players. Regional and short-sea shipping will see a
much larger growth (both in volume and number of
vessels) than deep-sea.
90 THE FUTURE OF SHIPPING

LOW CARBON ENERGY

For more than a century, the shipping industry has relied almost exclusively on heavy
fuel oil. But with the introduction of strict environmental regulations, rising fuel prices
and concerns regarding the security of energy supply, the industry is on the brink of
a revolution in marine fuels. What will fuel the ships of tomorrow to help the industry
reach the CO2 reduction ambition?

To ensure a sustainable planet, humanity must limit
global temperature increases to 2C, achievable
primarily by lowering carbon emissions. The
shipping industry can be expected to reduce its total
carbon output by at least 60 per cent below present
levels.
Achieving this ambition will not be easy. Consider
that the world leet is expected to expand over
the next four decades to meet expected growth in
global trade. And while improving on-board energy
eficiency certainly plays a role in meeting carbon
reduction targets, such measures alone will only go
so far in reducing emissions. If so, the development
of low carbon sources of energy represents the
industrys best option for lowering its total carbon
output.
Moving away from fossil fuels
There are two primary trends driving developments
in low carbon energy. First, growing public concerns
regarding the industrys impact on health and the
coastal environment has led to increasingly strict
regulations on emissions a trend likely to continue.
At present, regulators have introduced stringent SOx
and NOx emission limits in some regions, and the
IMO has introduced mandatory eficiency standards
(EEDI and SEEMP) to help address CO2 emissions.
In the future, we may see shipping included
in additional state-sponsored CO2 reduction
agreements, such as a carbon tax or an emissions
trading scheme. If so, these regulatory requirements
could drive the introduction of various alternative
fuels.
Second, the growing scarcity of fossil fuels has
resulted in the steady rise in bunkering costs,
concerns related to energy security and the long-
term availability of fossil fuels. At the same time,
sustained political unrest in energy producing
countries could lead to an extended global
energy crisis, driving oil prices up further. Indeed,
a long-term energy crisis would likely trigger
rapid developments in technologies to manage
shortages of fossil fuels especially alternative fuels.
On the other hand, high oil prices have led to the
development of unconventional fossil fuels, such
as shale gas and shale oil, which may help stabilise
energy prices over time.
Breaking the deadlock
New fuels require new on-board systems and
machinery, so changing from one fuel (HFO,
MDO) to another (e.g. LNG) will take some time.
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 91
For pioneers owners who take the risk to invest in
new solutions unforeseen technical issues often
result in signiicant delays, requiring additional
capital. At the same time, bunker costs for certain
shipping segments are paid for by the charterer,
removing incentives for owners to explore alternative
fuels. Patchwork regulations, enforced by different
government bodies that often apply different
standards, have also slowed coordinated action.
Lack of appropriate infrastructure, such as bunkering
facilities and supply chain networks, and the long-
term availability of certain fuel types are additional
barriers for the introduction of any new fuel. That
is, owners will not start using new fuels if the
infrastructure is not available, and energy providers
will not inance expensive infrastructure without
irst securing customers. Breaking this deadlock will
require a coordinated, industry-wide effort and the
political will to invest in the development of new
infrastructure.
Low carbon energy solutions
Over the next four decades, it is likely that the
energy mix will be characterised by a high degree
of diversiication. LNG has the potential to become
the fuel of choice for all shipping segments,
provided the infrastructure is in place, while liquid
biofuels could gradually also replace oil-based fuels.
Electricity from the grid will most likely be used more
and more to charge batteries for ship operations in
ports, but also for propulsion. Renewable electricity
could also be used to produce hydrogen, which
can in turn be used to power fuel cells, providing
auxiliary or propulsion power. If drastic reductions
of greenhouse gas emissions are required and
appropriate alternative fuels are not readily available,
carbon capture systems could provide a radical
solution for substantial reduction of CO2.
Expectations for a broader application of nuclear
power for commercial vessels are limited. While
a proven solution, uranium-based nuclear power
is currently considered too controversial to be a
viable alternative for ships. That being said, a shift in
opinion may happen. We could see fossil fuels being
banned or heavily regulated, to the point of forcing
the public and politicians to reconsider their attitude
towards nuclear powered ships. Developments in
thorium-based nuclear power, which remove many
of the security and waste disposal risks associated
with uranium-based systems, may progress to the
point where marine applications are possible and
acceptable.
92 THE FUTURE OF SHIPPING
PATHWAYS LOW CARBON ENERGY
Liqueied natural gas
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Using LNG as fuel offers clear environmental
beneits: elimination of SOx emissions and particulate
matter; signiicant reductions of NOx and about
20% reduction of CO2 emissions. While LNG fuel
cannot reduce CO2 emissions to the required levels,
it remains an attractive option to meet current
emission requirements. Furthermore, the number of
LNG-fuelled ships is rapidly increasing, encouraging
investment and construction of infrastructure projects
along the main shipping lanes in the world, making
LNG the leading short-term alternative fuel.
Ebling technologies
LNG as fuel is now a proven and available solution,
with gas engines being produced covering a broad
range of power outputs. Engine concepts include
gas-only engines, dual fuel four-stroke and two-stroke
engines. Some of the latest two-stroke engines help
avoid methane slip (release of methane) during
combustion, and further reductions are expected
from four-stroke engines. On the production side,
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
the recent boom in non-traditional gas (shale) has had
a dramatic effect on the market for gas, particularly
in North America. Exploitation of shale gas in other
parts of the world could also prove to be signiicant
for a more rapid uptake of LNG as fuel for ships.
However, the extraction process (hydraulic fracturing
or fracking) remains a controversial technology, due
to growing public concerns over its impact on public
health and the environment.
Expected developments
Rapid LNG uptake is expected in the next ive to 10
years, irst on short sea ships operating in areas with
developed gas bunkering infrastructure, followed
by larger ocean-going vessels when bunkering
infrastructure becomes available around the world.
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 93

DNV-GL

Technologies and tools Benefits

Gas engines (gas-only, dual fuel four-stroke 20% CO2 reduction

Up to 90% NOx reduction
and two-stroke engines)
Fuel tanks
Eliminated SOx and PM emissions
Production of non-traditional gas (shale gas)
Eliminated oil spills
94 THE FUTURE OF SHIPPING
PATHWAYS LOW CARBON ENERGY
Ship electriication
and renewables
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Recent developments in ship electriication hold
signiicant promise for more eficient use of energy.
Renewable power production can be exploited to
produce electricity in order to power ships at berth
and to charge batteries for fully electric and hybrid
ships. Enhancing the role of electricity on ships will
contribute towards improved energy management
and fuel eficiency on larger vessels. For example,
shifting from AC to on-board DC grids allows engines
to operate at variable speeds, helping to reduce
energy usage. Additional beneits include power
redundancy and noise and vibration reduction.
Renewable electricity can also be used to produce
hydrogen, which can power fuel cells on-board ships.
This solution will also help owners manage challenges
related to the intermittent nature of many renewable
energy sources. Indeed, hydrogen is the lightest of
all gas molecules, thus offering the best energy-to-
weight storage ratio of all fuels. However, hydrogen as
fuel can be dificult and costly to produce, resulting in
the signiicant loss of energy. Compressed hydrogen
has a very low energy density by volume, requiring six
to seven times more space than HFO. Alternatively,
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
cryogenic storage in well-insulated tanks at very low
temperatures (-253C) can be used, but this process is
associated with large energy losses.
If renewable energy from the sun or wind is not readily
available, conventional power plants can be used. If
so, greenhouse gases and other pollutants will still
be emitted, but they can be reduced through exhaust
gas cleaning systems or carbon capture and storage.
Alternatively, nuclear power on shore could be used
for emissions-free electricity production.
Ebling technologies
Energy storage is critical both for the use of electricity
for ship propulsion and to optimise the use of energy
on hybrid ships. At present, there are a number
of energy storage technologies available. Battery
powered propulsion systems are already being
engineered for smaller ships and for larger vessels,
with engine manufacturers focussed on hybrid
battery solutions. Challenges related to safety and
the availability of some materials must be addressed
to ensure that a battery driven vessel is as safe as

an ordinary vessel, but the pace of technology is
advancing rapidly and solutions to these issues are
likely to be developed.
Fuel cells are commonly used to convert the chemical
energy of hydrogen into electricity. When a fuel
reformer is available, other fuels, such as natural
gas or methanol, can power a fuel cell. Although
research has indicated that fuel cell technology can
be applied successfully to the maritime environment,
further R&D is necessary before fuel cells can be used
to complement existing power systems on ships.
Challenges with fuel cell technology include high
investment costs, the dimensions and weight of fuel
cell installations and the expected lifetime of the
system. Also, more work must be done to ensure
the safe storage of hydrogen on-board ships.
Epected developments
For ship types with frequent load variations such as
harbour tugs, offshore service vessels, and ferries,
Technologies and tools
Battery technology
DC grid
Fuel cell (based on hydrogen)
Storage of hydrogen
Land based renewable energy
production (wind, solar, etc)
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 95
electriication is increasingly seen as an effective
means to reduce fuel usage and corresponding
emissions. At the same time, the construction of more
hybrid ships is expected to be common towards
2020. After 2020, improvements in energy storage
technology will enable some degree of hybridisation
for most ships. For large, deep sea vessels, the hybrid
architecture will be utilised for manoeuvring and
port operations to reduce local emissions when in
populated areas.
Signiicant reduction in costs is required if fuel cell
technologies are to become a viable solution for
maritime transport. With the recent commercialisation
of certain land-based fuel cell applications, there
is reason to believe that costs will fall. For ship
applications, a reduction of the size and weight of fuel
cells is critical. However, fuel cells are likely to play
a larger role in future power production on ships. In
the short-term, it might be possible to see successful
niche applications for fuel cells on some specialised
ships, particularly in combination with hybrid systems.
Benefits
Signiicant reductions of CO2, NOx and
SOx, depending on how electricity/
hydrogen is generated
Opportunity to use renewable power
production
Reduced transport cost
Reduced maintenance
Power redundancy
Noise and vibration reduction
Elimination of oil spills
96 THE FUTURE OF SHIPPING
PATHWAYS LOW CARBON ENERGY
Biofuels
Impact level: None Low Medium High
CO2 SO x NO x Invasive
emissions emissions emissions species
Biofuels can be derived from three primary sources:
edible crops, non-edible crops (waste, or crops
harvested on marginal land) and algae, which can
grow in water. In addition to having the potential
to contribute to a substantial reduction in overall
greenhouse gas emissions, biofuels derived from
plants or organisms also biodegrade rapidly, posing
less of a risk to the marine environment in the event
of a spill. Biofuels are also lexible: they can be mixed
with conventional fossil fuels to power everything
from city buses to larger power trains, while biogas
produced from waste can be used to replace LNG.
Ebling technologies
Biofuels derived from waste have many beneits,
but securing the necessary production volume is
a challenge. Consider that the land required for
production of biofuel supplying the shipping industry
(300 MT per year) based on todays irst-generation
biofuels technology is equal to the size of Norway
and Sweden combined or about ive per cent of the
current agricultural land in the world. While second
Recycled Oil spill Lives lost Freight Insurance
materials at sea cost claims
and third-generation biofuels will not compete with
agricultural land, more research is required before
these next-generation biofuels will be viable.
Algae-based biofuels seem to be the most eficient
and have the added beneit of not competing with
arable land, while consuming signiicant quantities
of CO2, but more work needs to be done to identify
algae strains that would be suitable for eficient large
scale production. Concerns related to long-term
storage of biofuels on-board ships also need to be
addressed.
Expected developments
Experimentation with biofuels has already started on
large vessels, and preliminary results are encouraging.
However, advances in the development of biofuels
derived from waste or algae will depend on the price
of oil and gas. As a result, biofuels will have only
limited penetration in the marine fuels market in the
next decade. However by 2030, biofuels are set to
play a larger role, provided that signiicant quantities
can be produced sustainably and at an attractive price.
 PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 97

Technologies and tools Benefits

Second and third-generation biofuels 20-80 % reduction of CO2

Technologies for long-term storage of Eliminated SOx emissions
Oil spills less dangerous, due to
biofuels
biodegradable fuels
98 THE FUTURE OF SHIPPING

PATHWAYS LOW CARBON ENERGY

Carbon capture and storage

Impact level: None Low Medium High

CO2 SO x NO x Invasive Recycled Oil spill Lives lost Freight Insurance

emissions emissions emissions species materials at sea cost claims

While not an alternative fuel, carbon capture and
storage (CCS) tackles carbon emissions at its source:
exhaust gas. CCS systems are a proven solution,
having been used since the 1970s mainly for
enhanced oil recovery, but few commercial plants
are in operation for the sole purpose of emission
reduction. As for marine applications of CCS, only
simulation studies have been carried out so far. The
results are promising, but the process consumes a lot
of fuel.
Ebling technologies
Currently, three different types of carbon capture
technologies exist: Chemical absorption, which uses a
chemical solvent to absorb the CO2 from the exhaust
gas; membrane separation, which involves passing
the exhaust gas stream through a set of membranes
which separate various components in the gas from
each other; and pressure swing absorption, which
exploits the tendency of gasses to be attracted to
solid surfaces under high pressure, allowing for
the separation of CO2 from exhaust gas. These
systems are energy-intensive and can be expensive
to operate, and researchers are working to mitigate
the environmental risks of storing carbon on land or
sea, but if carbon is commercialised into a tradable
product, developments in CCS technologies could
potentially accelerate rapidly.
Expected developments
Developments in carbon capture technologies have
slowed down in recent years, due to high capital
requirements, operating cost, and lack of incentives or
of a CO2 market. The cost of installing and operating
CCS systems on-board ships will be prohibitive, unless
an appropriate carbon market is established in the
future with prices making these operations attractive.
Otherwise, the introduction of this technology would
only take place in response to increasingly strict
regulations on targeting greenhouse gas emissions.
Alternatively, CCS could be used on land based power
plants to produce carbon neutral fuels.

Technologies and tools
Carbon capture technologies
(Chemical absorption, membrane
separation, pressure swing absorption)
Storage of CO2
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 99
Benefits
At least 50% reduction of CO2
Assuming carbon is commercialised,
CCS could provide an additional
revenue stream
100 THE FUTURE OF SHIPPING
LOW CARBON ENERGY
A POSSIBLE FUTURE
Testing of methanol, ethanol,
DME, biodiesel and biogas
LNG bunkering infrastructure improving
High uptake in short sea segment
TODAY
Initially, the introduction of any alternative energy
source will take place at a very slow pace, as
technologies mature and necessary infrastructure
becomes available. In addition, the introduction of
any new fuel will most likely take place irst in regions
where the fuel supply will be secure in the long-
term. Due to uncertainty related to the inancing
development of appropriate infrastructure, the new
energy carriers will irst be utilised in smaller vessels
designed for short-sea trade. As technologies mature
and the infrastructure starts to develop, each new
fuel can be used in larger vessels, and eventually
on ocean going ships, provided that global
infrastructure becomes available.
Renewable energy sources, such as solar and
wind power, are not seen as a viable alternative
Hybrid systems in deep sea for auxiliary
systems during cargo operations
LNG penetrating the deep
sea shipping segment
for propulsion on commercial ships at this time.
Certainly, vessels equipped with sails, wind
kites or solar panels may be able to supplement
existing power generating systems, but the relative
unreliability of these energy sources make them ill-
suited for deep sea transport or operations in some
latitudes at certain times of the year and/or seasonal
weather conditions.
At present, LNG represents the irst and most likely
alternative fuel to be seen as a genuine replacement
for HFO for ships constructed after 2020. The
adoption of LNG will be driven by regulation,
increased availability of gas and the construction
of the appropriate infrastructure. The introduction
of batteries in ships for assisting propulsion and
auxiliary power demands is also a promising

Piloting of fuel cells running on hydrogen
as auxiliary propulsion power
Biofuels and biogas part of the fuel
mix for niche trades and regional use
source of low carbon energy. Ship types involved
in frequent transient operations (such as dynamic
positioning, frequent manoeuvring, etc.) can beneit
most from the introduction of batteries. Cold ironing
will probably become a standard procedure in many
ports around the world, helping to reduce harmful
local emissions.
The pace of development for other alternative fuels,
particularly biofuels produced from locally available
biomass, will accelerate, and may soon complement
or challenge LNG and electriication. Indeed, it
is likely that a number of different biofuels could
become the norm in different parts of the world after
2030. However, acceptance of biofuels in deep-sea
transportation can only take place if these fuels can
be produced in large volumes and at a competitive
price around the world.
PATHWAYS TOWARDS SAFER, SMARTER AND GREENER SHIPPING 101
Shutterstock
A diverse fuel mix with LNG, biofuels,
batteries and hydrogen in use
Fuel cell with hydrogen fuel
produced from renewables
2050
There are many possible solutions the industry can
adopt to achieve the sustainability ambitions for
shipping in 2050, but no alternative fuel solution has
yet emerged as the most likely candidate. Therefore,
there will be a more diverse fuel mix where biofuels,
hydrogen and batteries are the main energy carriers.
Electriication and energy storage will enable a
broader range of energy sources, while renewable
energy, such as wind and solar, will be produced
on land and stored for use on ships either using
batteries or as hydrogen.
While HFO and MDO will likely be a (declining) part
of the maritime energy mix for decades to come,
the development of alternative fuels represents the
future of a more sustainable industry.
102 THE FUTURE OF SHIPPING

THE WAY FORWARD

SHIPPING TOWARDS 2050
 THE WAY FORWARD SHIPPING TOWARDS 2050 103

Rising public demand for sustainability and more transparency is re- writing the rules
for all industries. For shipping, the future will be characterised by tougher regulations
and ierce competition, as owners seek to gain a competitive advantage by investing in
systems to increase eficiency, lexibility and reliability. But to become truly sustainable,
the industry must embrace new technologies and practices to improve safety
performance and reduce its carbon footprint.
104 THE FUTURE OF SHIPPING
ustainability a game-changer for shipping
The growing frequency of natural disasters
associated with climate change and increased
public awareness of the impact of local pollution
on health, have resulted in a rapid decline in public
tolerance for environmental damage. Over the past
two decades, environmental awareness has become
a public policy issue that is re-shaping business,
politics and individual businesses all over the world.
The trends are clear: The world population will grow,
and an expected increase in economic activity and
global trade will lift millions of people out of poverty.
An expanding, educated middle class will have
access to technologies that will enable them to learn,
gather and share information about everything,
including the degradation of the environment.
As our world becomes smaller and increasingly
interconnected, public awareness of environmental
issues will rise, leading to more vocal and organised
demand for transparency and sustainability from
all industries, including shipping. The industry must
rise to this challenge by taking action to improve its
safety and environmental performance.
A whole new safety mindset
By 2050, we can expect the shipping industry to
embrace a new safety mindset, resulting in a step-
change in how the industry understands human
psychology and the interplay between humans and
machines. Dramatic advances in information and
communication technologies, materials and design
will demand a holistic approach to developing
systems that align technologies, organisations and
strategies with human behaviour.
At present, about 900 people die in ship-related
accidents per year in international shipping. If we
include occupational accidents, the crew fatality
rate is 10 times higher than best-practice rates
for industries in OECD countries. Major accidents,
especially those in the ferry and cruise segments
that involve many passengers and events resulting
in signiicant environmental damage, remain a
particular concern. In addition to the human cost
of fatalities at sea and the long-term impact of
environmental damage, accidents attract extensive
and negative media coverage, which can represent
an existential threat to a shipping company following
a disaster.
Avoiding accidents and ensuring the safety of
on-board personnel represents one of the most
complex challenges faced by owners and ship
managers. Unlike mechanical or technical systems,
safety systems must account for the seemingly
ininite variables of human behaviour. On-board
personnel regularly interact with each other, heavy
machinery and a broad range of control and data
systems in a loating workplace, often subject to
severe weather and harsh conditions far from land.
Rather than focusing on individual components,
the industry would beneit by embracing a more
comprehensive approach to safety, one that
establishes effective barriers that prevent or mitigate
the impact of accidents.
Today, more and more systems are controlled
and integrated by software, which introduces new
challenges for operations, maintenance, testing
and veriication a trend likely to continue. These
increasingly complex on-board systems will require
a new safety mindset. At the same time, advances
in digital technology will play a greater role in the
design phase, allowing for more accurate modelling
of hull forms that take into account wind, weather
and the vessels operating proile. Virtual emulation
(or mirroring) will enable on-board personnel to
acquire virtual experience across the entire range
of vessel operations, from normal operations to
maintenance, repairs to surveys, risk management to
emergency and evacuation procedures. The further
development of automated systems and advanced
decision support tools will contribute signiicantly to
on-board safety.
In the subsea industry, remote operations
are already a reality, and systems with proven
marine applications are likely to be adopted by
merchant shipping. In time, the development of
fully automated, unmanned, remotely operated
vessels could be a reality. Combined with advances
in materials requiring limited maintenance,
autonomous shipping would eliminate occupational
risks on-board. While the unmanned vessel concept
would likely face signiicant public scepticism,
we believe that many on-board systems will be
autonomous by 2050, reducing the number of
on-board personnel and therefore improving the
industrys safety performance.
 THE WAY FORWARD SHIPPING TOWARDS 2050 105

PATHWAYS TO SUSTAINABILITY

Organising
for safety

Dynamic risk
management

System
resilience Safe operation

Virtual ship
laboratory

Energy
efcient design

Next generation
emulation
Advanced ship design
Smart
maintenance

Automation and Safety

remote operations

Lightweight
material
The connected ship
Intelligent
material
Efciency
Powerful
material

Economies
of scale

Efcient short Future materials

sea shipping
Environment
Value chain
efciency

LNG

Biofuels Efcient shipping

Ship electrication
and renewables

Carbon capture
and storage
Figure 11. The igure shows an
overview of the solutions and pathways
and how they contribute towards
Low carbon energy
a sustainable shipping industry
 AMBITION
REDUCE
FATALITY RATES
90 % BELOW
PRESENT LEVELS
Achieving this target
requires a new safety
mindset and continuous
focus on multiple issues
related to technologies
and how organisations are
structured and function.
Building a robust safety
culture where humans,
organisations and
regulators systematically
gather information and
learn from failures will
be critical to achieving a
90 per cent reduction in
fatalities.
AMBITION
REDUCE FLEET
CO2 EMISSIONS
60 % BELOW
PRESENT LEVELS
Currently, no single
solution can ensure the
industry achieves a 60
per cent reduction of
CO2 emissions, especially
considering the expected
increase in transport
demand. Energy efficiency
is certainly part of the
solution, but the target
cannot be reached unless
the industry shifts to low
carbon solutions. The
technologies are there, but
the barriers are significant
the lack of adequate
infrastructure and security
of energy supply
AMBITION
MAINTAIN
OR REDUCE
PRESENT
FREIGHT COST
LEVELS
The potential for the
shipping industry to
reduce costs and increase
reliability by embracing
smarter solutions is vast.
Owners will have to
increase investments in
systems to enhance safety
and reduce emissions,
but to maintain cost
levels they can apply new
technologies and solutions
to become more efficient,
thereby keeping freight
costs within acceptable
limits.

C bo - utral shipping on NOx and SOx. Over time, other low-carbon

Shipping is the most climate-friendly form of freight
transport, yet the fuel that powers the industry is
a cocktail of pollutants, emitting not only climate-
warming carbon to the atmosphere but also SOx
and NOx which represent a signiicant public health
hazard. Growing awareness of these issues will put
increasing pressure on regulators and industry to
take action.
To ensure a sustainable planet, humanity must limit
global temperature increases to 2C, achievable
primarily by lowering carbon emissions. Today,
shipping contributes to three per cent of global
anthropogenic CO2 emissions and is a major
contributor to local pollution in densely populated
coastal areas. For shipping to do its part, the industry
must reduce emissions by 60 per cent of todays
emission levels. Incremental wins in energy eficiency
will not be enough; the industry will have to seek
alternative solutions to power vessels.
We are entering the age of alternative fuels. The irst
stage will see more vessels powered by LNG,
a process driven by high oil prices and regulations
solutions, such as ship electriication, biofuels,
batteries and fuel cells powered by renewable
energy sources will be adopted, increasing the
diversity of the industrys fuel mix. More controversial
solutions, such as nuclear power and carbon
capture and storage, are not likely to be seen
aboard merchant vessels anytime soon, but given
advances in technology and the introduction of more
emissions regulations, these solutions may gain
wider acceptance.
Digital technology a catalyst for smarter shipping
A sustainable world will also be a digital world.
The steady advance of communications technology
and access to ever increasing amounts of data
will continue to drive unprecedented human
connectivity. For the shipping industry, the Digital
Age will open up a new landscape of opportunities
for the industry to get smarter from ultra-
eficient supply chain coordination to virtual design
laboratories capable of producing next-generation
vessels with radically reduced operating costs and
energy consumption.

Increased connectivity has already changed the
shipping industry. With more ships connected to the
Internet via broadband satellite networks, and more
on-board systems connected to each other and the
Internet, merchant shipping is becoming a more
data-centric industry. Increasingly, on-board systems
are being integrated, automated and controlled
through software. At the same time, the ability to
collect, store, manage and utilise large volumes of
data has improved.
Communications and data analysis can improve
logistics operations with a focus on the total value
chain. More powerful computers will be able to
model realistic conditions a vessel may face at sea
and in different weather conditions, and be used to
design more optimal hull and machinery systems.
Advances in sensor technology will enable improved
condition-based monitoring and maintenance
procedures and allow owners to run remote
diagnostics and, when necessary, recommend ixes.
U derstanding the barriers to change
The most common barrier for the introduction
of any new technology is the capital investment
required. Research has indicated that owners are
reluctant to invest in cost reduction measures and
technologies, even in those with a relatively short
payback time. Many owners often struggle to ind the
capital resources internally to invest in new systems,
and those seeking external inancing are often
disappointed. Likewise, owners operating tonnage
in segments where the charter pays for the fuel may
have few incentives to explore alternative fuels or
invest in energy eficient measures.
Many owners are wary of implementing new
technologies that represent a inancial risk.
Unforeseen technical issues often result in signiicant
operational problems, requiring additional capital
to remedy, and causing loss of revenue. At the
same time, new systems require additional training
of personnel to ensure that the operation of new
technologies will actually meet future regulations
and requirements. Likewise, the introduction of
certain alternative fuels has raised reasonable
concerns among owners regarding how inadequate
infrastructure and uncertain security of future fuel
supply will impact operations. In addition, the
introduction of new technologies often requires new
regulations, standards and software tools. Finally,
deep-seated industry practices, established supply
chains, legacy IT systems and organisational inertia
may slow adoption of low carbon solutions.
THE WAY FORWARD SHIPPING TOWARDS 2050 107
The way forward
Three forces are acting on the shipping industry
to drive change: increased regulations, which set
more stringent minimum safety and environmental
performance requirements; competitive pressure,
which encourages more cost-eficient operations;
and public demand for more transparency and
sustainability. This societal pressure is not only
directed at government authorities and ship owners,
but also at cargo owners, who are under increased
pressure to do business with owners who operate
vessels beyond compliance.
Regulations will continue to be an important driver
for sustainability in three critical areas: safety,
eficiency and the environment. However, regulators
should be sensitive to the inancial impact of these
requirements and work with the industry to ind
workable solutions. As we gain more knowledge
about the impact of shipping on the environment,
the industry will be in a better position to evaluate
various regulatory solutions that both create value
for society and provide a level playing ield for
various segments and companies.
Shipping companies and cargo owners may also
adopt new inancial models where both parties
share the beneits of fuel savings and investments
in energy eficiency. By incentivising the entire value
chain, the industry can act decisively, creating a more
eficient and sustainable leet. Government also
has a role. By funding research in co-operation with
shipping companies and cargo owners to manage
technical issues, and investing in the construction
of required infrastructure, the shift towards a low
carbon industry will occur at a faster rate.
We recognise that the pathways towards a more
sustainable industry will occur incrementally and
that not all the solutions described in this report are
available today. Likewise, we are aware that, as in the
past, game-changing events could impact shipping
in ways impossible to foresee. As noted, this report
is not intended to forecast the future of shipping,
but rather to offer a set of achievable ambitions the
industry can and should pursue. Looking ahead to
2050, we are conident that the impact of tougher
regulations, competitive pressure and advances in
technology will create new opportunities for the
industry to become safer, smarter and greener.
Those players that lead the way will deine the new
competitive landscape.
After all, the future does not start tomorrow
it starts today.
108 THE FUTURE OF SHIPPING
THE WAY FORWARD SHIPPING TOWARDS 2050 109
110 THE FUTURE OF SHIPPING
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114 THE FUTURE OF SHIPPING
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