Latest / UnDocked: The Maritime Transformation Show / Who’s Liable When Ship Control Moves Ashore? Cyber Risk and Maritime Law
Transcript
- Raal: Who Pays When an Autonomous Tanker Spills Oil? it gets to the heart of a topic that you and I have discussed a few times. around the unintended consequences of that technology layer being applied and where does liability sit? Hello everybody and welcome to this week's episode of Undocked and hello to you, Nick Chubb Nick Chubb: Hello, Raal Harris. How are you on this fine day? Raal: I'm doing very well indeed, thanks. And how are you? You just got off a webinar, I understand. Nick Chubb: Yeah, I'm good. I've been a bit busy today. I've been webinaring, but it's been an excellent session. it was it was co-hosted by us and GTT Marine. So we had the CEO, Casper, on and we had Peter Hadjipateras who's the Chief Information and Sustainability Officer at Dorian LPG. yeah, so it really interesting. Wha one actually, just that those two job titles go together, which I I I quite like, is that IT and sustainability actually are these days sort of intrinsically linked. but the discussion itself was about whether a ship owner should look to have a single IT platform. or look to have a best of breed approach and get the best software, point solution in every category and then work out how to integrate them. Which is obviously a topic that is dear to our hearts on this show. Raal: Yeah, it's come up a few times, isn't it? think it's one of those things that swings backwards and forwards a bit like a pendulum, doesn't it? And I think we talked about AI enabling that kind of best to breed approach because it's much easier to interface between different systems. Was that a theme? Nick Chubb: Yeah, we talked about AI a bit, but actually what was quite nice about it was that we ended up kind of displitting the Conversation into three layers. So one is like data collection on the vessel, making sure you've got good data coming off the vessel, and that it's of a level of quality, that you can get it off the vessel fairly securely, that it's collected efficiently, that you're not running up massive costs to actually get the data off in the first place. Then how do you actually manage that data once it comes into the organization? know, d funny things that you just you just sort of wouldn't wouldn't really even think about, but different vendors having different names for particular types of data coming from different sensors. So if you've got a fleet of twenty five ships and they've they've you know, some are charted in, you know, some are new build, some are old. Actually th that means you can have four or five different tags for this this this one piece of data. Raal: Yeah. Yeah. Nick Chubb: and Peter even said that sometimes from the same vendor you get different tags for Raal: Yeah. Nick Chubb: the same piece of data. Raal: Every voyage means thousands of small decisions on fuel burn, maintenance timing, emissions, and cost. Made well, they compound. Made blind, they compound too. Insight and SmartSea help operators bring route optimization and predictive maintenance into everyday operations through one connected digital environment, turning sustainability and efficiency from a separate initiative into simply how the fleet performs, voyage after voyage. Because the best gains aren't the ones you chase once, they're the ones built into how you already operate. Take the next step with Insight. Follow the link in the episode description. Nick Chubb: So that was the kind of secondary, kind of how how you get it all working in the organization. And the third is kind of how you get it into people's hands and the what that means and and the approach that Dorian took in the end, they he actually took us through a really interesting potted history of of kind of their IT approach over the last decade. They tried to do a kind of single platform to make everything work, and in the end they found they just they just couldn't make it work. So nowadays what they do is they they pull the data in from the vessel, it all goes to a common data lake. they've constructed and then Specific applications that do the point solution work can draw off that common data lake. So they end up with this kind of single source of truth in the organization, and then any application can kind of ping into it, which I thought is quite a nice way of setting it up. But he he he did talk about, which I thought was really interesting, particularly for any startups listening or anyone who is developing software. He talked about a kind of a a deadly sin that he sees in the in the software world, and that is overinvesting in UI. And features and underinvesting in the in the actual kind of data infrastructure side. He said when they were first looking at performance solutions, they tested four or five in the space of a year. And in the end, they went with VPS operating out of Denmark. And the reason they went with them is that actually they didn't have a very flashy UI or anything like that. They just had the fundamentals down in terms of getting the together, the actual models for how they do the digital twins and all of that sort of stuff. And they had lot of vendors that they worked with really lovely UIs, but ultimately the data underneath was quite bad. And what that led to was sort of suboptimal decisions in the performance team. And so you very, very quickly degrade trust in the system overinvest in the UI and underinvest in the data, which I thought was quite an interesting insight. Yeah. Raal: Yes, all the glitters as well. Sometimes the most, I mean, I don't know where it stands at the moment. I remember there was a brief point where performance of the UI was a very good indication of how good the underlying structural data was. I'm not sure that that's sort of true anymore. I don't know how reliable that is, but you know what I mean? If it was able to Nick Chubb: Yeah, yeah. Raal: very quickly visualize data, that was a very healthy sign that that the underlying data structures and architecture of the application stuff was very sound. Nick Chubb: I think polish used to be a signal for rigor. And Raal: Yeah. Nick Chubb: now AI enables you to polish a turd. and so it Raal: Yeah. Nick Chubb: just no longer maps. and so yeah, and and then I think people rely on the polished output because it looks good. and then you end up degrading trust very, very quickly because actually you realize it's it's not we know what's underneath the hood just isn't quite there. Raal: Yeah. Yeah, it's interesting. A few couple of things to pick out there. I think first and foremost, was around the inherent fragmentation of the space, which does undermine somewhat the single vendor idea, because unless they can completely overcome fragmentation, which is going to be very, difficult in maritime where assets are fragmented, where things are very separate. Nick Chubb: Yeah. Raal: It does mean you've always got that interpretation there. the other thing, I think is something that I want to come to in today's discussion, is around the design of things being very much based on the idea of these kind of these separate assets out at sea, autonomous, completely enclosed. And Nick Chubb: Yeah. Raal: therefore, things like what you call something, you your nomenclature, your classification, your taxonomy, it doesn't matter, right? It's got to work within the ecosystem that it's, yeah, within Nick Chubb: Within the ship. Yeah, yeah, yeah. Raal: the ship. And then what happens when you start to then take this kind of, you know, millennia old kind of model of which is Nick Chubb: Yeah. Raal: obviously, you know, evolved with technology, but essentially it's been the same. And then what happens when you start to kind of like apply this technology layer on it I remember one, just one example of the fragmentation talk about was something really simple for people to get their heads around in the maritime e-learning space, which as you know is my background, ranks. Like you couldn't imagine anything more simple, right? Nick Chubb: Interesting. Yeah. Raal: Because this is classified, you know, in SCCW and all these kinds of, but the way in which different companies had and within companies also as well, because very often companies have grown by consolidation and, just the discrepancy between things that are basically the same. And we used to spend an enormous amount of time, you know, accounting for and trying to kind of have this flexibility that in over here, the rank is written up in this way and this way and another. And, know, even something as simple and classified as that, you will find differentiation in the maritime space. It's fascinating. Nick Chubb: this this becomes a really prominent issue any time you're trying to do something between the merchant navy and the Royal Navy. a a friend of mine has be or was for many years the Merchant Navy liaison officer for the Royal Navy, so he's a merchant navy captain but has a a Royal Naval Reserve role and in the Royal Navy there is a separation between rank and role. So you can be the captain of the ship but only be a lieutenant, or a lieutenant commander or and and then in the merchant navy, rank and role are the same thing. And so often you get merchant navy captains, when they sort of try and port over to the Royal Naval Reserve or something like that, are then suddenly not captains, but they are captains of the vessel, and so it just ends up in this whole confusion between like who's actually speaking with who and what does it all mean. which is why there is a liaison officer between the two, because otherwise it just becomes a a a bit of a a bit of a menace. Raal: Yeah, absolutely. And then when you start to then integrate into shore-based systems, classic example of this is two words for the same thing, enclosed spaces, confined spaces. Exactly the same thing, but there's lots of confined spaces in ports, which... have to have the same kind of safety protocols that you have in enclosed spaces, onboard ships. And even there, where you've got like a direct interface, just different nomenclatures is kind of this. Nick Chubb: what what one other quite interesting thing that came out of the of the webinar for me was let you hazard a guess actually. what do you think would be easier to integrate with an old ship that's maybe sort of, you know, fifteen years old or a brand new, straight out of the art, state of the art vessel? Raal: When you say integrate with him in what from a Nick Chubb: It it put pull data off. Raal: pull data off. I mean, with some reservations, I imagine it's probably going to be the older ship because it won't have Nick Chubb: Yeah. Raal: the kinds of management of that. you have more flexibility in terms of how you approach it. Nick Chubb: That's ex exac exactly right. Peter in the webinar was talking about the fact that OEMs these days have much, much tighter control over the equipment on board and and how you can access it and how you can pull data off it. and that causes a lot of issues. Whereas actually the older ships you literally could just plug straight into the mod bus and just pull read data straight off. And so one of the big arguments that came out of the webinar was sort of a much closer collaboration between the OEMs, the software vendors, and the shipowners, and trying to possibly break that model of OEMs charging a fortune to get access to data that the ship owner actually owns. Raal: Well, was where I was going to go next was like, you know, on the one level, yes, of course, data security is super important. There is another proprietary sort of layer to this as well, isn't it, for why people would want to constrain what data you're actually able to pull because it's potentially their commercial advantage and something that sort of gives them an extra USP or whatever. Nick Chubb: Yeah, and and it's that it comes back to that old thing of, you know, if you're advising a software vendor you'd say make it as sticky as possible and if you're advising a a ship owner, it's it's you know, work with multiple vendors and have an exit route from any one vendor. so Raal: Yeah. Nick Chubb: that I think that but I think that's a healthy tension, right? I think if in the market you get those two things right, you end up with a bit of a rising tide where everyone gets better and and it lifts all ships. Raal: Yeah, yeah, I think so. And I think as well, I we covered it the other week, if anyone's interested in following that sort of train of thought around that fragmentation point. It's not just data that's fragmented. That's the important thing in systems. It's also departments, people's roles, you mentioned different KPIs and that sort of stuff. So from a software vendor point of view, don't just come at this and think it's a technology problem. It may not just be a technology. Nick Chubb: Yeah. And actually on i on interoperability, you know, something that came out was was Interoperability between software is one thing, and that's important. But actually, you know, any any shipping company with a fleet of ships will will not have a static fleet. You know, you might have 15 ships one year, 20 ships the next year, down to three ships the year after that, you know, just depending on how the market runs. And so im interoperability between fleets as you bring fleets in and out of management or in and out of of a of a of a charter becomes really important. And and having software that enables that is is is critical. Yeah. Raal: Yeah, you just raised another point there, which I think is worth, since we've sort of been addressing the software vendor community there. One of the things that's interesting there that maybe people aren't so aware of. Now, when you're sort of doing your forecasting and you're preparing your reports for your investors and for the bank and people like that who are watching your business closely and you've got a certain amount of contracted business and In most terms, this is pretty simple. You're looking to kind of grow your subscription base Nick Chubb: Yeah. Raal: and you're looking to retain your customers. What you're not perhaps expecting is for that customer base to suddenly contract from being 250 licenses down to, it could be like 50 licenses Nick Chubb: Yeah. Raal: or the equivalent of how you've sliced it. But of course, when you're doing business with ship managers, for example, assets are coming in and going out of their portfolio. any contracts that you have are going to be dependent on them having the business that they have. So if they have any ships that go out of their management and or indeed an owner decides to sell some of their Nick Chubb: Yeah. Raal: inventory, which is not unusual as well, you then are not getting that subscripted revenue. Now, can work very much in your favor if you've got a company that's growing and acquiring ships and know, but you Nick Chubb: If you've got the people on the other Raal: can't take it for granted. It's just one of those, we've never discussed that before, but I think it's something that you need to prepare yourself for if you're planning to sell into that community. You'll be expected to, you know, to take that on the chin. Nick Chubb: It's quirk of the industry, it? Raal: Hmm, yeah. Nick Chubb: So I was chatting a couple of days ago with a ship owner, well, quote unquote ship owner, who actually right now has no ships. the way the kind of unit economics of shipping work is that a lot of owners, smaller owners, will run very, very lean shore operations. And so these guys are actually, three people sat in an office in Dubai, very, very small operation, have a small chartering operation. They outsource the technical management to a third party manager. And then they tend to bring ships in, they will buy them and then just charter them straight out. And the bit that they do, their kind of core focus is the chartering stuff. And they're very good at that. the market has gone hot, they've just sold all the ships and now they sort of sat on the cash waiting for the right opportunity to start buying again. And so if they were one of your customers, which they may well have been at some point Raoul, they would suddenly be not paying for their subscription because they don't need to. Raal: Yeah. And I mean, and I think if you, if you think about like sort of, does that mean? I mean, obviously it's very difficult if you've got, if you're in an early stage business where cashflow is a, is a real problem. But I think once you got over that bump, I think it's about being a really good partner and about understanding the ebb and flow Nick Chubb: Yeah. Raal: of these things and, and, and joining in with your customers, being flexible and supporting them. And that's sort of, that's where it becomes a true partnership and where you where your loyalty is hopefully rewarded and in most cases I think it is. Nick Chubb: Yeah, yeah, yeah, and actually I think often... Maybe not so much with ships moving in and out of management, but certainly with people moving around the industry. Often when someone key leaves an organization that's been a sort key relationship, often you'll actually end up with two customers because you'll keep the relationship you had with the other organization and then often pick up that relationship in wherever that person ends up. So it is, whatever's going on with the ships, it is very much a relationships game, this business. Raal: Yes, absolutely. So I was talking a little bit there around, I guess, the expectation of these assets and how that works. And I saw a story in Splash, which I really, really liked. I was happy to see it. The Splash story is entitled, Who Pays When an Autonomous Tanker Spills Oil? And I like to talk about oil spills, you understand, but what I... Nick Chubb: Interesting. Raal: What I liked about this was it gets to the heart of a topic that you and I have discussed a few times. We've sort of gravitated to sort of things around the unintended consequences of that technology layer being applied and where does liability sit? Now, the thing to say first of all, I think, is that when we talk about autonomous ships, I think very often people who are not sort of involved in that world imagine an autonomous vehicle type scenario where we're talking about Nick Chubb: Hmm. Raal: like the car is doing the driving fundamentally. In autonomous shipping term, that's not really what we're talking about in the main. It's more about the control of that vehicle being done remotely by a remote operator. Of course, there's lots of automation within that, but normally there's a human being involved in there. And I remember going on a visit as a member of Intermanager to Columbia Ship Management's digital control room in Cyprus, which was just incredible. Because it was like, I mean, this was at least 10 years ago, I think now, and it was like walking up onto a bridge inside their office there in Limassol. Nick Chubb: Right. Yeah. Raal: And you had these enormous screens and everything kind of, but it was very much like a bridge set up and very much like a mariner kind of on board it. So this is kind of at the heart of what we're talking about in this particular story. And they zoom in on these lovely pieces of legislation, which have sort of stood by us for long time. This one is the 1992 International Convention on Civil Liability for Oil Pollution Damage, otherwise known as Nick Chubb: the Raal: CLC 92. Are you familiar with this instrument? Nick Chubb: Snappy. It feels like something I should be but I'm not, I must admit. Raal: Well, it was probably older than you are, isn't it? 1992, I think. Well, of course, the first thing to say is that 1992 is this old piece of legislation that's been put in place. And if you think about like the, what it does fundamentally is it places the registered ship owner on the hook for any kind of pollution incident. there's various, no doubt. people thinking, ship owner's not necessarily liable for having caused the accident or whatever. But if you think about it in terms of like, when you get an oil spill like this, who is going to be bringing any kind of claim or suit? It's going to be a country, right? Because it's the shoreline that's damaged, that the cleanup operation will be done at a national level and that sort of stuff. So they don't want to have to be finding out an individual seafarer and kind of, you know. trying to kind of pin it on them, apart from anything else, if they actually got that liability down to an individual or group of individuals, it's extremely unlikely that they'd be able to squeeze from them the money to pay for a cleanup. Whereas of course ship Nick Chubb: Yeah. Raal: owner has insurance and all of those sorts of things has to have insurance to bear it. it's an easier way for them to sort of to manage this. And so yeah, if you're carrying more than 2000 tons of... of persistent oil, you've got to have the insurance that kind of allows for this sort of thing and or other financial security in place that would indemnify in any sort of claim. So the basic principle of this piece of legislation is that when there's an oil spill, the registered owner or their insurer pays and arguments about causation, you know, down to the level of the crew or whatever, are not something that we need to feature here. So the article posits or the chap that's referring to this who studied the law of this points to the fact that it deliberately kind of mentions certain people and roles within that. So crew, pilots, charters, managers, operators, various parties are protected from direct pollution. claims and where the article goes is to say that actually as we move to autonomous control of the vessel, the remote operator is not a named party and therefore this would potentially Nick Chubb: I see. Raal: open very different interpretations potentially, that's the other thing. Nick Chubb: Yeah. Raal: it would be down to the law of individual countries to then start to pick apart which would obviously cause confusion and all of that sort of stuff within it as well. So I thought that was kind of a really interesting example of where we are relying on the law is set up around us, an expected paradigm of this vessel with the crew on board, with an owner that's Nick Chubb: Yeah. Raal: over there. And as we start to experiment, let's say with with technology and exploiting what technology affords us to be able to do, it potentially disrupts this age old kind of legal and liability issue. Nick Chubb: That's super interesting. Raal: Mmm. Nick Chubb: think particularly in the context that recently, think in the last few weeks, international group of P &I clubs have announced that they are covering, I think it's autonomy under the IMO's mass framework. They're gonna cover third party liabilities that arise from... mass maritime autonomous surface ships from the shared pool. So like the P &I clubs are kind of, I guess, getting one step on top of it, but Raal: ahead of the... Nick Chubb: I don't know how clearly or how well defined the concept of the remote operator is. It's certainly not obviously legally defined in any serious way. And my guess is on this, if it can be insured, someone will take it. As in like, there will be some insurance provider, P &I or someone else. Insurance loves weird risk, because it's when it's hard to predict, you can create a level of obscurity in the pricing and then there's usually quite a lot of money to be made. You know, and it's the same with like, you know, the war risk, for example, that we've had this year. Raal: Hmm. Nick Chubb: So my guess is at some point in the next few months or years, some kind of insurance product will exist for this. I'd be shocked if it didn't. Raal: for sure. For sure. I think, but I think where, where it's actually, you know, where it actually gets really interesting is when you actually start to go down this rabbit hole of sort of thinking about what changes. If it's a like for like definition, right? Somebody did this on board a ship. Now that person is doing it here from a legal perspective. I think it would be relatively easy to defend. You might be able to say, Nick Chubb: Yeah. Raal: well, you know, actually this is everything that person did. This is everything that the duties, the responsibilities Nick Chubb: Yeah, yeah, Raal: map across directly. I think there, you you could start to say, where's the issue really? And that was one of the things I thought with this. thought, surely this isn't a massive stretch to kind of just go, but actually Nick Chubb: Yeah. Raal: it's what you think about some of the other things that are happening and whether there's other people involved in this as well. And what I mean by that is once you're doing that, it's not, it's not just like you've moved something, you're changing some other fundamental things in there. And then you've got like the actual software provision, the technology provision part of it that's enabling that. Is there some responsibility there? Nick Chubb: Yeah. Raal: so, it's an example of where the technology is moving faster than the regulation and everything else that needs to kind of keep up Nick Chubb: Yeah. Raal: with it. But I started kind of making a little list of things that also, know, what else fits into this kind of bucket in the way that the splash article has put it up. Obvious one, who is the master, right? If control is being split between Nick Chubb: Yeah. Raal: autonomous systems and people are sure who legally has command and ultimate responsibility. Solace, for example, very, very clear about the master's responsibilities and that sort of stuff. And of course that goes for even, yeah. perhaps that's an even bigger rabbit hole of going down the master's responsibility once technology is actually on the bridge. The other one, hours of rest and fatigue. So a remote Nick Chubb: Yep. Raal: operator. will be a shore worker rather than a seafarer. You've got SDCW, you've got MLC protections, all that sort of stuff. Where does that stand on someone controlling a ship? that something, Nick Chubb: Working ashore. Working ashore. Raal: that something, is that something that they might have to do? Now, our instinct is, well, they can't possibly be as tired as someone who's kind of working on shore, but it doesn't necessarily figure that Nick Chubb: Yeah, yeah. Raal: one, particularly in a scenario where you may have one operator, several ships, right? Nick Chubb: Yep. Raal: So at the moment, you've got to be physically present on the ship. So there's only one ship you can worry about. But if you're in a remote operation scenario and you're in, you you're not in a, in the kind of sea lanes that require continual work, particularly if, if more and more of that is being automated and guided, what's, you know, why not have several ships? This one I particularly like. See what you think of this one. Pilotage. Does the pilot still get on board? Nick Chubb: Yeah, yeah, yeah. Raal: This must be in the mass thing. This must be in mass, surely. Can you? Go on. Nick Chubb: I can tell you that I think it's fin traffic. It's either fin traffic or Danpilot. Apologies to either of those if I've got this wrong. But they started rolling out remote pilotage as a service where effectively what they would do is they would drop a box onto the ship that effectively acts as a kind of, you know, the pilot aid. box that has a kind of GPS on it. The pilot normally has it almost in their hand in front of them so they can see where they are. They have their own set of vectors and they have, it's called a pilot information system, something like that. They drop a box on board the ship that's sort of similar to that but with no screen and it just sort of sits on the bridge. And then a shore-based pilot will give orders to the ship based on the information they're getting from that box. But guess how the pilot and the ship communicate. Raal: Is it through the medium of dance? I don't know. Nick Chubb: No, I would like to watch that. No, it's Microsoft Teams. Raal: no, really? god. Nick Chubb: Because you need a two-way channel of communication that's always open. So you can't rely on VHF in case you sort of cross wires. Raal: You can't be well that's it. Nick Chubb: And so Microsoft Teams is how, at least this is a couple of years ago, the last I looked at it seriously, is how they were actually having that two-way channel of communication. And so the pilot is sat sort of in a control center with lots of screens, Raal: Yes. Nick Chubb: and they can see the data coming off this box. And then they talk to the captain or shout orders to the helmsman via Microsoft Teams, which just sort of slightly terrifies me having been on. Raal: Yeah, Nick Chubb: number of dodgy teams calls over the years. Raal: yeah, yeah we're trying to reconnect you. Nick Chubb: Yeah. Raal: What's slightly mad there is it's sort of like they're not relying on the same data. Why go to the Nick Chubb: Yeah. Raal: trouble of actually physically putting something on board the vessel? Nick Chubb: a few companies that offer these systems. Tidalis is one. And there's a company that was part of James Fisher, I think got divested, I can't remember their name now, is another. But essentially, it's like a tablet that the pilot has. Sometimes they can... connect into the vessel and pull in sensor data direct from the vessel. But the whole idea of it is that the pilot sets up their own totally independent set of GPS aerials and their independent view of ECTIS, guaranteed updated local charts. Often they will have much better updated notice to mariners. what's going on in the port than the Ectus on the, that's actually installed Raal: Mmm. Nick Chubb: on the bridge. And so they get a better view, if you like, they've got a better sort of data driven view of kind of, of what's going on. And this is also becoming much more important as S100, the new generation of hydrographic standards is starting to come live because in S100, we're gonna get right into the weeds here, but in, S57, which is like the kind of basic layer of, the old, I should say, layer of Vectis information is fairly static. S100 allows you to do things like live current information, live tidal information. So things like under keel clearance and all of that sort of stuff, can actually take live, stream the hydrographic data live from the port that will be going to the sort of palm pilot that the pilot has. And part of the reason for that is that... the pilot has to take the ship in and they have no real understanding of how good the equipment is on board, how well maintained it is. And Raal: Yeah. Nick Chubb: so they need to be totally certain that they can take the ship in. Beyond all the mechanical stuff, which can go wrong, but in terms of the navigation information they have in front of them, they need to be absolutely sure that they can do that safely. And so not relying on the ship is quite important. Raal: Yeah, and also that, yeah, if you look at it, if you flip it from the other way round and say that, you know, the pilot's, I guess, first duty of care is to the port community, isn't it? And the other vessels and stuff that are in port. so, and Nick Chubb: Yeah. Raal: particularly, I guess there's a big difference between him being physically present on the ship, being able to see the instruments, be satisfied that everything's working as it should be versus, just trust this data that we're sending you. on which to make Nick Chubb: Yeah, yeah. Raal: those decisions. it does make sense when you look at it through that lens that, yeah, but it seems quite mad that it still have that paradigm of having to kind of have the pilot sort of come on board in sort of robot form. Nick Chubb: Well, don't forget that when they're on board, they've got real skin in the game because there's something Raal: Yeah. Nick Chubb: wrong. They're physically on board. When they're remote, Raal: Yeah. Yeah. Nick Chubb: that's less of an issue. But Raal: Yeah. Nick Chubb: even so, I think it's still important for them to have an independent view of Raal: Yeah. Nick Chubb: the data coming off the ship. Raal: Yeah, yeah, interesting. Next one. Got a few of these. I've got a few of these Nick Chubb: You're cool. Yeah, yeah. Raal: search and rescue. So ships have obligations to assist people in distress. Nigel Farage, if you're watching, you can't just leave people to drown in the Nick Chubb: Yeah. Raal: So an unmanned ship can can divert, obviously, to where the issue is. But who's actually going to pull those people aboard and administer first aid and that sort of stuff? What's the? What's your view on that one Nick Chubb? Nick Chubb: Yeah, actually, there's a really interesting company called Zlim founded by a guy called Sam Mail, Fleetwood Nautical College cadet. Well, not ex, I mean, he finishes cadetship, but fellow Fleetwood Nautical College alumni, I should say. Raal: Mmm. Nick Chubb: They created a rapid onboard recovery system called SWIFT. And the idea is it is a fully unmanned craft, small craft, that works in offshore, things like offshore wind parks, offshore installations, and it stands by the whole time. And then when someone goes in the water, as does happen from time to time, It gets activated, goes and finds the person autonomously, and then it has this really quite amazing, apologies if you're listening, but I'm doing actions with my hands, amazing sort of conveyor system that pushes under the water from the bow. scoops the person up and then sort of conveyors them back onto the platform so that they're then on a platform and then humans can take over and do sort of medical control. The key technological innovation that became super useful out of making that system work was the man overboard detection. So I think that these days they provide a lot of man overboard detection software to people at cruise ships and offshore. But yes, there is a robot that can scoop a human out of the sea if they end up in it. Raal: But are you obliged by law to have one? That's the question if your ship is autonomous. you've got obligations today haven't you you've got obligations for under Nick Chubb: thought so. Raal: SAR so anyway we're not going to answer it but it's an example of what Nick Chubb: It's a good question. Raal: it's an example of what i'm talking about here and Nick Chubb: Yeah. Raal: also this one slightly more nuanced you may know the answer this one colregs the lookout one i think it's rule five requires a yeah exactly Nick Chubb: Yeah, yeah, starting the sight, sound, and all available means. Raal: look out by sight hearing all available means How do we translate that into camera sensors, AI potentially, as replacing that person with this? Nick Chubb: But I feel like that's one of the more straightforward ones Raal: Hmm. Nick Chubb: because it doesn't say people. It says sight, sound, and all available means. And so, Raal: Yeah. Nick Chubb: you know, actually I think if you cover off sight, which, you know, is covered off by computer vision systems, if you cover off sound, you know, lot of, if you take cruise ships, for example, they are having closed bridges and so you can't hear anything anyway but they have these things called elephant ears which are basically like mics that are positioned around the vessel and then they replay any sound back into the bridge digitally so that kind of already exists but the difference is you'd just be playing it to an autonomous system and then all available means you know that could be that could be things like LIDAR that could be radar it could be anything Raal: Could be a gateway. Sorry. It's an off. Yeah, an offer to come up with new ways. All right, you got you got that one. Nick Chubb: you Raal: I'll give you that one. Sea worthiness. Nick Chubb: Yeah. Raal: Two things, sea worthiness under this, under the definition to leave the key, the ship has to be, you know, found to be sea worthy. Software, cyber security risks, for example, anything that kind of attacks or whatever, does this mean that cyber security becomes a intrinsic part of sea worthiness and your ability to defend that aspect of it? Because there's no one else there to look after the vessel. And then where does that stand if we accept that that is part of the criteria or, then where would that stand on software updates that could change the nature and profile of the vessel? And by this, I'll give you an example. When I first went to Norway, met a guy with a Tesla for the first time, and, you know, was very impressed by all the amazing things it can do. Nick Chubb: Yeah. Raal: But one of the things that really blew my mind is he explained to me how he was now getting a much better performance out of the car because it just had a software update last week, you I was just like, Nick Chubb: Yeah, what Tesla did during the, there was a particularly bad hurricane year a few years ago and Florida was basically under an evacuation order. Tesla did an over-the-air update which increased the battery capacity of the people on the cheapest Teslas by something like 30 % so that they Raal: Exactly. Nick Chubb: didn't have to recharge because the batteries are artificially limited if you buy a cheap Tesla. And so yeah, so they were able to push an update that brought people more power capacity so they could get out of the way of the hurricane. But you're right, the reverse is theoretically true. If someone was able to hack into that system, they could take the battery capacity down to zero. or in a maritime instance, do something silly with the ship. Raal: Or even just something that was, you know, is it unusual for software companies to push out a patch that hasn't perhaps been as fully tested or something that they hadn't fully, Nick Chubb: Yep. Raal: you know, and then what do they do? You know, if it's just performance that's affected until they can kind of get a patch out, it's one thing if the vessel's sea worthiness of the vessel is compromised. So in other words, let's assume that sea worthiness can be established. let's say class come on, they're very happy with the arrangement, whoever, and the ship goes out to sail. But then a software update goes out while it's on voyage that completely changes the nature of the vessel itself. Nick Chubb: Yeah. Raal: So I'm not saying these are not surmountable problems, but they're ones that you kind of have this been thought about. Is this something that's going to... Nick Chubb: So on cyber risk management specifically, we did a three year research partnership with Cyber Owl and HFW, the law firm. And shout out to Tom Walters from HFW, who's a partner there, but specializes in cyber risk management and cyber response. I asked him exactly that question. I put him right on the spot because it was during a live panel discussion. And the short answer, I will paraphrase, is Probably, because cyber risk management is now part of ISM and ISM speaks to seaworthiness, probably cyber risk management... speaks to the seaworthiness of the vessel. However, it's not yet been tested in any courts in a meaningful way. And that was a couple of years ago, so maybe it has now. And Tom, if you want to come on the show and give us an update, we'd love to have you. But as I understand it, yes, the short answer is yes, it certainly could. If your cyber risk management posture is bad, the seaworthiness of the vessel could be in doubt. which then voids Raal: Yeah. Nick Chubb: your insurance and means you're sailing illegally and all that sort of stuff. Raal: Yeah, yeah. And of course, it's the flag's responsibility for you to be operating to the standards of the flag, but that in itself is also affected by the possibility what happens to that jurisdiction because when you're on a vessel that's flagged by a country, you're under the, we've talked about this before, you're under the... that effectively that regime, right? While you're on board that vessel, Nick Chubb: Yep. Raal: it's the extension of the laws of that country. What if the operator is in a different country? That's neither, that's, yeah. So that's another kind Nick Chubb: That's interesting. Yeah. Raal: of mad idea. What's the legal status then? Because they're quite clearly, I mean, not in the territory of the flag, which has lots of implications for Nick Chubb: Yeah. Raal: flag of convenience and stuff more so than it does. If you're on a UK ship that's flagged in the UK and your remote operator is in the UK, that's one thing. But once we get into Nick Chubb: Yeah, yeah. Raal: flagged convenience and stuff, it becomes much more complex. So all of these, mean, you know, there's roots we can start to imagine how we kind of solve all these problems. But yeah, good examples of where technology is moving at a pace that's faster than all these different laws and someone can keep up with. And case law. Nick Chubb: A couple of years ago I had a fascinating afternoon touring the remote operations centre for CFA in Antwerp. don't know, have you ever been? Raal: No. Nick Chubb: If anyone from CFA is listening and would like to invite us back. I would love to come back. It's amazing, you basically go into this very quiet room where there's like six stations sort of around the room and at each station there's a huge bank of screens and a very nice sort of ergonomic chair with some joysticks and things and then sat in each station is a master. master is at that time responsible for a ship or a barge, maybe I should say, a barge and tow on the inland waterways across Benilux. So this is actually really quite, in the inland waterways, this stuff is really quite advanced. Raal: Mmm. Nick Chubb: speaking to your points, part of it is that there is a level of... complexity gets taken care of when it is a Belgian ship operating in Belgian waters and all the licensing can be put in place and the remote operation centre is in Belgium as well so it all ends up under one operating environment. But there is still a captain on the barge itself. who's physically on and a full crew on the barge. But the difference is that these guys can take over for sort of four to eight hours at a time. once the barge is unberthed, it's done all the cargo operations at unberthed, it does the kind of high traffic bit. Then the captain can hand over to the remote operator and then the captain can go and sleep or whatever. I think in some instances, the captain has to still be on the bridge. They just don't have to be actively driving. captain can go and catch up on all their paperwork, they can do other things and in terms of the kind of operating model for making these inland barges work, it massively improves the kind of quality of life for those on board. So one captain ashore might look after four or five barges in a day, but they'll sort take a four or five hour turn on each one and just sort of remote in, support the captain on board, then remote out again. But it's a really cool model and a very, very cool place to go and visit if you ever get a chance. Raal: Yeah, sounds fascinating. Sounds fascinating. So you mentioned Cyber Owl there. we Nick Chubb: Yeah. Raal: were riffing on cybersecurity and seaworthiness. There was another story which caught my eye in Digital Ship, your publication, Nick Chubb: yeah. Raal: with a Anglo Eastern Ship Management. had Nick Chubb: yeah. Raal: Joanne Hurgard, the CEO. on the show, so I was pleased to see Nick Chubb: we did. Raal: this story. And one of things that pricked my attention with was around an area that, again, when people are thinking about selling into the space, understanding the constraints that different stakeholders and stuff are under. And ship managers obviously are catering and in Anglo-Eastern's case, I think it's like hundred different owners that they're dealing with. So Nick Chubb: Yeah. Raal: they're managing on those owners' behalf. And of course, When it comes to things like cybersecurity infrastructure, those are all decisions that have been taken by the owner, the infrastructure of Nick Chubb: Yeah. Raal: the vessel and all that sort of stuff. And all of those hundred owners will be thinking about things in a slightly different way. They may be regionally in different places. They might be at different levels of appetite for risks and maturation, digital maturation and policies and all that sort of stuff. So standardizing your approach to managing cybersecurity and cyber risk from that in that kind of environment is very, challenging. You can't go in and dictate to people they've got to tear out a bunch of systems. You can't sort of say, you know, expect to have the level of control that you might like to have to be able to roll out the kind of policies that we might do for a shoreside organization, let's say who want to just implement an IT policy, you know, globally or whatever. And so, so I was interested to see that they worked with CyberAl, who you mentioned, it sounds like you Nick Chubb: Yep. Raal: know, so maybe you can speak about this. And it sounds as though what they've done is they've sort of accepted the infrastructure, accepted what's going on with all these different vessels and different vessel make-ups, but applied a layer that can be done consistently across the whole of the fleet that will allow them to then sort of plug into the existing firewalls, the endpoint protections, all that sort of other. stuff instead of replacing them and deal with what they've got but sort of harmonize it across the fleet there. And the article, suggests that this is potentially a playbook for other ship managers to look at as well. And I think the other thing that's a question in the article is whether or not this becomes another differential that ship managers can apply. in their respective market as a way of kind of selling differential approach to something like cyber, which as we've said is becoming increasingly important to your ability to operate certainly, but also to deal with some of the kind of challenges that people have now in terms of the, not just the kind of common and well understood. breaches Nick Chubb: Yeah. Raal: that are there, but also in an environment where ships are increasingly sort of seen as a target and this is something that can be weaponised. Nick Chubb: Yeah, I think third party managers sit somewhere between a rock and a hard place when it comes to cyber risk management because they are the document compliance holder. So they've got to make sure that they are complying with, you know, as a minimum the requirements in ISM, which is the rules around safety management for ships. And there were rules that came in after 2020 around essentially having an approach to cyber risk management, although the rules are quite vague on what that approach needs to be. And then there are new rules that came in from CLAS, which were called E26 and E27. At the moment, they only apply to new builds, but generally speaking, it's sort of easier to move the entire fleet, new and old, onto this sort more enhanced management system. And that sets much more specifics around... cyber risk management. But for the third party manager, they are sat, as you say, you know, in Angelo Easton's case, between essentially 100 owners. And so it isn't just a case of mandating what each owner needs to have in place. It's a case of finding a way to integrate with multiple different owners. And that actually, I think, is quite challenging. And I think one of the interesting things I picked up in the article was Maritime cyber isn't IT cyber. actually kind of making the distinction that says the maritime industry in many ways we say it's not as unique as it thinks but I think in this instance maritime is actually quite unique when it comes to cyber risk management and so you need a partner in place that really understands the industry rather than just kind of a you know a generic sort of security operations center that you might have in another industrial market but yeah very very interesting and certainly interesting and sort of taking the approach of understanding what you can integrate with when it comes to cyber rather trying to replace it I think is quite pragmatic. Raal: Yeah, exactly. think pragmatism is one of the things that sort of comes across quite strongly in that article. And to your point there about sort of, think the chap that's quoted in the article is sort of saying this, that, you know, in other situations, you would have a situation where alarms are going off, you know, almost constantly, things that are being red flagged Nick Chubb: Yeah. Raal: and everything that are just intrinsic to... a shipping environment and so sort of saying understanding what's where the risks really are and what needs to be monitored at the right level, particularly then apply that across this very different landscape of different vessels and the way that you deal with it. But I think it's Nick Chubb: Yeah. Raal: that idea that went through my mind of sort of saying, you when you think about what's important for a ship manager to because the margins are very tight in ship management. And when you look at what's really where they're getting the benefits, it's from scale. So anything that requires a custom approach for every single customer and a different standard of monitoring that's being done depending on where in your portfolio you are would be very, very difficult to sort of apply and get the benefit of scale and sort of. you know, be able to deploy your workforce as well, because if everybody's got to learn a different kind of approach to different vessels. So Nick Chubb: Yeah. Raal: this seems potentially to be quite an interesting, I don't know the product well enough. mean, obviously I've heard of them before, but I don't know the well enough, the product well enough to know where, where that would be, I guess, where the differentiation is between those infrastructure kind of things that each vessel, which will be unique to each vessel. Is it just monitoring that they're doing or are they actually in the infrastructure game as well? Nick Chubb: I think it is a pick and choose all of the above. So they can provide just advisory, they can provide a full security operations center, they can put boxes on board the ship that will help segregate traffic and all that sort of stuff. It's quite an interesting topic, cyber risk management, one we haven't really covered in depth. Raal: No, we haven't. I do think that it is. There was an article just today that was so I read it today, but it was in in the paper at the weekend. And it was it was actually about the breaks going on in Silicon Valley, which I thought was really, really interesting because we've talked about this on the podcast some months ago that this sort of arms race to get to agentic to get to, you know, super intelligence and all that sort of stuff. It's been like throwing everything at it to try and be the ones who get there first. And there's been very Nick Chubb: Yeah, yeah, yeah. Raal: little regard for any kind of constraints or any kind of appetite for trying to regulate it. And probably the first Nick Chubb: Yeah. Raal: thing that we saw was probably when they pulled Mythos, right? And that was the first thing. And the reason for pulling Mythos was that I think they felt that the risk to being able to use it for hacking purposes and was kind of, and breaching of cybersecurity protocols Nick Chubb: Yeah. Raal: was the issue. The article that I read at the weekend was actually the fact that some of these people are now holding back models for that same reason. So they're not, it's not. they're not relying on the government to be the brake. They're actually concerned about some of this. it's the ability to restrain the offense if it was a football team, let's say, the offense is outpacing the ability to defend, right? So. So it's about needing to get that timing right. And I think that's interesting because these guys have not shown any appetite for constraint whatsoever. So if they're starting to get a little bit nervous now, and the article also pointed to the desire to get China in particular on board with this, because although their models are slightly further behind, the open source model allows that even if there are constraints within the existing. know, code base that people could then take it, enhance it and use it in a different way. And I think, Nick Chubb: Yeah. Raal: so I think the, seems to be the biggest concern that's driving things at the moment is the, ability to be used for attacks. And I think what spooked them I think it was, think it was open AI. As an open AI experiment, and they set up an agent with a fairly simple mission, and the agent decided that its mission could be fulfilled or to fulfill its mission, it needed to take down this company, I think who were called facehugger, No, it's not face hugger. It's hugging face. It's an app store for AI products, it broke out of the sandbox and attacked this other company and that seems to have been what's kind of spooked it because they had no idea that that that wasn't It wasn't set up as a target. That's not what they were trying to do with the experiment. ended up, it had figured out that that was some battle to winning the war, that the task that it was set up for. Nick Chubb: That's wild. Raal: Yeah, so the reason after that diversion, the reason that I kind of bring that up is that I think that most of the chat in Maritime is still thinking around the kind of things that we've seen, the incidents that we've seen with cyber in the past. We're probably not prepared for the dual thing of there being the bar being lowered so much between what's possible and the entry level to being able to kind of cause this kind of disruption and then B, the fact that we've seen you know ships become targets at government level, governments actually declaring ships as targets and we've actually seen in the last sort of few days warfare like descriptions of trade. So if you look at well one the trade dispute that's been weaponized between the US on Canada and then B, the US declaring, I think they've called it something fury again, haven't they? was Operation Fury was the military one, they're calling it something, is it called Trade Fury? Nick Chubb: Yeah, yeah, I mean, talk about futility, know, go and start a physical war with a country because sanctions weren't working and then when it appears that you're not winning that war to then just go back to sanctions but sure where this goes. Raal: Yeah, but the point stands that, you know, that we're seeing a different kind of asymmetric warfare, we're seeing ships Nick Chubb: Yeah. Raal: and trade as being something that can be weaponized and stuff, and we're also seeing the bar lowered on what it takes to conduct a cyber attack. some of the things that we've mentioned today, these have just occurred to me over my corn flakes, but these will have been something on the mind of, as you say, P &I and on Nick Chubb: Yeah. Raal: brokers and everybody will be looking at clauses and wondering, how does this play out when comes to when incidents happen? And there's no precedent for some of this stuff. That can be very worrying for a lot of people. Keep people up. Nick Chubb: Yeah, Have you heard of a company called Wilson Sons? Raal: Are they a stationer as in Tunbridge Wells? Then no. Nick Chubb: No, no they are not. No, not TG Jones either. Raal: Hahaha Nick Chubb: They are a tug operator in South America. And Raal: Consider myself schooled. Nick Chubb: they have been on quite an interesting transformation. Actually, this has gone on for about 17 years. And what I quite like about this story is that not necessarily that they've done a sort of 18-month massive turnaround. It's that they've been kind of iterating on the same idea that is still quite rare in the tug market. And they've been doing it for many, many years. So if you wind the clock back to 2009, 2010, the way that Wilson Suns operated, had 85 tugs stationed around 25 ports all around South America. essentially, in every single port, there was a local office that ran those tugs. And so when a ship was coming in that required tugs, they contact the local office. The local office would dispatch the tugs. was kind how the business operated. then about 15 years ago they decided that it would be interesting to try. instead of having the tugs stationed at the ports to have those tugs potentially kind of spread all across the coastline and then have a centralized dispatcher. So they decided to create what they call the COR, which is, I'm not going to try and pronounce it in Portuguese, but it is the Tugboat Operations Center that's in Santos. And they have a single centralized control room where all of the tugs, all the 80 tugs get dispatched. from and when they have high demand in one area they can take tugs from other ports and send them up the coast to make sure they get fully used. So actually the utilisation of tugs has sort of gone up significantly. So on the one hand, it's just quite interesting that they've been on that transformation, but I think the most interesting thing about it is how they actually went about doing it. So rather than trying to build the software themselves or going to one of the big players, you know, you could go out to the company like Daedalus, for example, that provides sort of VTS type services and buy it off the shelf. They decided that they were going to do it through a series of... partnerships with startups. So they started by mapping out what the landscape looks like for maritime and port startups. They identified 528 of them across 45 countries and five continents. And they actually published that research themselves. This is going back a few years, but about that 528, about 200 were doing sort of big data and analytics optimization type questions. So how do you optimize a fleet of tugs? And they were about a hundred in the kind of AI and machine learning space. And what they decided to do was rather than just buying the software from them, they would actually make minority investments in the startups. So they went from 528, found three that they really liked the look of, and then they actually backed them. to become their software vendors. So they ended up between those three startups. They have evolved that over a number of years to a platform called Artemis that now provides completely real-time monitoring of all of the tugs in their fleet. So all the way across the Brazilian coastline, 81 tugs. They have 30 of their own AIS antennas all the way along the coast. So they've got their own terrestrial AIS. They're not reliant on any kind of third party data suppliers or software vendors for it. And it takes in all of the AIS traffic locally. And then they can use that to plan where the tugs need to be to make sure that they run the most efficiently. They've now built on top of that their own vessel traffic services. for Brazil, which as a kind of in-house led, they built sort of in partnership with these startups. And then last year, Wilson Sones actually got acquired by MSC. So they are now part of MSC. But I just thought it was a really interesting model to go instead of buying it from a big company or trying to do it yourself, they found and backed startups and then worked with them over a number of years to make the transformation happen. Raal: Yeah, it's interesting, isn't it? It's a bit like, sort of a little bit like Lomar Labs in Nick Chubb: Yeah. Raal: that, you know, they're sort of, but with Lomar, they're kind of, that was less about them acquiring things that they needed and then trying to work out what to do with them, which is what this one seems to do. But they, the implication there is that the startups that they funded, also have some other revenue streams as well. haven't, because otherwise they'd have bought them outright and then utilize them for this business they're doing. So any idea what, where that sort of technology investment is also being used. Nick Chubb: Yeah, of the ones they funded, one ultimately failed. One has become their kind of backbone system that they're using. And in all honesty, I don't know about the third. Raal: Yeah, no, I mean, I asked more in hope than expectation, because obviously you wouldn't expect that to be something that was there. But it's an interesting, yeah, I think there's a very big difference between saying that companies, we can use that company and their technology, let's go buy them. First Nick Chubb: Yeah. Raal: is, we need what they're doing. And then there's also a potential revenue stream there from other services as well. But of course, the MSC thing changes everything because MSC are huge. there's no doubt that's then something that can be scaled to other other places. Nick Chubb: Well, that becomes quite interesting. Yeah, and it's worth saying Wilson Suns also own two container terminals as well. They have done a very similar thing with automating the container terminals. I think that's in part at least why MSC bought them rather than the tug fleet. But you're right. Raal: Mmm. Nick Chubb: When the MSC announcement came out, they talked about synergies and efficiency gains and all of that sort of stuff. So what's the kind of big unknown at the moment is, does that mean you take the good regional system from Wilson Suns that has been built up over 15 years and put it across the entire world, which is definitely not beyond the realms of possibility, or does MSC come in with their own system and just ripple that out? Only time will tell, unfortunately. Raal: Yes, this is the joy of mergers and acquisitions. Nick Chubb: Well, we're not recording next week. I'm at SMM been very organized this year. think I was checking to the team earlier today. think we've got something like, across the whole team, we've got something like 30, 35 meetings booked in, which is good, over the course of three days. So it's going to be a busy few days. Few things to plug. One, we have an SMM show special on tickets for the Digital Ship Summit. So tickets for the summit. early bird pricing ends on the 7th of September. So next week is the last week you can buy tickets for £395. It goes up to £695 once the early bird pricing ends. And if you're at SMM, you can use the code SMM at checkout to take an extra £100 off. So you can get tickets at the moment for a limited time for £295. There will be two members of the team, well, it's a few members of the team. Charlotte, Olivia and Kelly will be at SMM at... and you can physically buy tickets from them as well, sort of at the show. So if you spot them wandering around and you'd like a ticket, come and introduce yourself and say hello. And then the other thing is, at Posadonia, Every morning we jogged down to the beach and we went for a swim in the sea. And it really helped us to stay awake through the course of the show. And I don't really want to go swimming in the river at SMM. So I've decided that what I'm going to do instead is we're to have an SMM run club each morning of the show, or at least Tuesday, Wednesday, Thursday. Yeah, Tuesday, Thursday, Friday morning. I will be at the Beatles Platts statue at 7am to go for a very slow, very gentle jog as a way of undoing any damage done the night before. And anyone who wants to talk about either Thetius Digital Ship or tech in general in the maritime industry and also go for a very slow jog, you're very, very welcome to join me. Raal: Sounds like a wonderful idea, but aren't you also doing a launch there as well? Nick Chubb: yeah, wow yeah, the Thetis Top 150 launches on Tuesday. Raal: Yeah. Nick Chubb: You're right, thank you. The Thetis Marketing Manager would have killed me if I did not mention that. The Thetis Top 150 launches at SMM on... Wednesday evening it comes out Wednesday morning So everyone will find out if they're in it or not Wednesday morning Wednesday evening. We're having a physical launch party on the Lloyd's register stand You can register by going to the thetius website and just just so we have an idea of numbers It'd be helpful to register but it's in the open exhibition halls that people tend to just sort of float into these things And we'll reveal the list And I think we've got quite a lot of the companies on the list who will be attending And we'll have a few drinks So yes, you're right. And we'll talk about that on the podcast when I'm back from SMM the week after. Raal: Good, well I wish you a fantastic time and and I look forward to hearing all about it, Nick Chubb: thanks all. Have a wonderful day. Bye. Raal: Thanks, everyone. Cheers.