Sean T. Pribyl
Unmanned aerial systems (“UAS”), or “drones” in common parlance, have not been a part of the historical maritime vocabulary. At least, not yet. While UAS may conjure images from science fiction, the reality is that companies are designing commercial UAS for the private sector. In fact, UAS are gradually permeating our daily lives, and over the next five years, the commercial UAS industry is predicted to surpass that of the defense industry.
But, while UAS technology continues to rapidly evolve, regulators have been struggling to keep pace. Consequently, the legal issues that surround the use of UAS remain complex and unsettled. There are benefits and risks with UAS as with any innovation, and this article suggests practical areas in which UAS may afford the maritime industry a novel approach to cost and time savings. Clients should be poised to harness the potential advantages and technological progresses that UAS now offer in the maritime, energy, shipping, offshore, and ship construction markets, and this article provides recommendations on how to best do so as they navigate largely uncharted waters.
The Cookie Test and What Follows Next
The following is a summary of key developments in particular segments of the maritime industry.
Vessels
Currently, in order to send urgent supplies to a vessel underway or at anchor, owners and operators must rely on boats, barges, or mooring the vessel while paying for crews and fuel. However, these options are time-consuming and expensive. But, those limitations are dissipating. To illustrate, in January, A.P. Moller Maersk A/S completed a UAS delivery over a distance of 247 meters of a 1.3kg package of cookies to an underway tanker. Accordingly, the industry should be optimistic that as technology advances and UAS integrate into the maritime supply chain, companies may save thousands of dollars each year on deliveries. With further testing, UAS could foreseeably inspect vessel tanks or lashing aboard cargo ships, and assist in surveillance of ice navigation or piracy.
Offshore Energy
Companies are increasingly utilizing UAS in the energy sector. Ongoing testing in challenging offshore environments indicates that UAS could be used in oil and gas surveys as well as inspections of rigs or vessels for leaks, damages to piping, structural defects, or other irregularities in dangerous locations, such as risers or flare stacks. For example, a UAS reportedly conducted a two-day inspection aboard a drillship in the Gulf of Mexico of the derrick, helideck, and four cranes, saving two weeks of work. UAS could also assist in class survey work, including hull tank inspections, and potentially could be used to detect and quantify discharges or spills to mitigate environmental impact in times of disaster. Furthermore, Protection and Indemnity (“P&I”) Clubs could use this same technology in lieu of Coast Guard overflights for oil spills, resulting in significant cost reductions in response costs.
Besides oil and gas exploration, UAS are being tested in inspections of offshore wind turbines in an effort to both decrease the economic losses caused during turbine downtimes and enhance safety for repair technicians required to climb on the blades. As with other UAS markets, the global revenue for UAS sales and inspection services for wind turbines is also expected to grow significantly over the next decade.
Shipyards, Surveys, and Ports
Overseas shipbuilders are employing UAS technology to increase efficiency during construction and inspection stages. Poland’s Remontowa Shiprepair Yard used a UAS to inspect internal spaces of chemical and product tankers, accessing the cargo tanks for an assessment of the condition of the hull and bulkheads. Remontowa may expand inspections to other areas of the vessel, such as the masts or deck crane jibs. Also, Japanese shipbuilder Tsuneishi Holdings Corporation and Turkish Besiktas Shipyard have been using UAS at their respective shipyards to assist in vessels undergoing repairs.
More recently, Knut Ørbeck-Nilssen, CEO of DNV GL–Maritime, reported that DNV GL had tested the use of UAS to conduct surveys inside chemical tanker tanks. DNV GL was the first classification society to utilize UAS to assist surveyors in completing production surveys, an accomplishment garnering attention in the industry.
Cargo ports and terminals are also taking steps to monitor the yard and vessel operations, and may consider UAS to enhance the management of a terminal or augment security plans. Most recently, Abu Dhabi Ports Company began testing the use of UAS to increase the surveillance at ports. And, the Maritime and Port Authority of Singapore intends to use UAS to monitor marine incidents.
Government Contracts and Grants
Federal agencies such as the U.S. Coast Guard are actively conducting UAS market research to support missions related to law enforcement, immigration, fisheries, counter-drug, smuggling, and ice navigation, and have entered into cooperative agreements with companies to evaluate the potential use of small UAS. Besides the Coast Guard, the National Oceanic and Atmospheric Administration is using UAS to collect data on living marine resources and environmental conditions. And, the U.S. Navy continues to integrate unmanned aircraft following successful testing of an unmanned aircraft from an aircraft carrier, recently awarding a significant defense contract for unmanned aircraft while establishing two new offices dedicated to unmanned systems. Also, some federal and state agencies offer grant funding related to developing UAS technologies. Overall, procurement, acquisition, and grants related to UAS look to be a growth market over the next decade.
Regulatory and Legal Regimes
So, what does it take to operate a UAS in the maritime industry? Basically, it depends. The location and purpose of the UAS may call into play overlapping jurisdictional and legal concerns. Currently, the FAA has exclusive sovereignty over U.S. airspace and regulates UAS as aircraft. The FAA previously authorized commercial UAS purposes through Section 333 Exemptions of the FAA Modernization and Reform Act. Now, the FAA has released a Final Rule on small UAS, effective as of August 29, 2016, which streamlines commercial small UAS under certain flight prohibitions, such as those related to nighttime flights, over people, altitudes above 400 feet, and beyond the operator’s line of sight. Additionally, commercial use operators must be cognizant of state or local government regulations, such as trespass, privacy, or nuisance laws, as well as potential flight restrictions for national security reasons. Consequently, the enforcement landscape in many cases lacks conformity, requiring constant vigilance of developing legal regimes. Careful consideration should be given in each case as to what requirements must be met before operating.
Outside U.S. airspace, operators must be cognizant of UAS laws, which may vary from country to country. To illustrate, the European Aviation Safety Agency is currently developing UAS rules as civil operators currently rely on basic national safety rules. Additionally, international organizations may have a role in international airspace issues. By 2018, the International Civil Aviation Organization hopes to deliver an unmanned aircraft international regulatory framework, and the International Maritime Organization may have a role in recommendations on UAS use by vessels at-sea for search and rescue, migrant monitoring, or ice navigation.
Essentially, innovators outpaced the regulators, and agencies such as the FAA were relatively unprepared for UAS integration. Consequently, the maritime sector is currently left with a shifting legal landscape in both domestic and international regulatory schemes that may lack clear comity or consistency. More importantly, UAS operators failing to comply with legal requirements risk license revocation, seizure, and fines, among other civil and criminal penalties. But, if the maritime industry cautiously navigates these legal regimes, the benefits could outweigh the risks.
Liability
Admittedly, assimilation of UAS into the maritime industry has hurdles to overcome. Currently, the full range of data is still being developed on which to measure all the risks that UAS pose in the maritime sector. In order to meet a wide range of liabilities, including cybersecurity, UAS operators should consider whether they have sufficient levels of insurance, such as hull, casualty, loss, and product liability. Overall, while it is clear that UAS have a number of attendant risks, their wide-ranging uses also have the potential to significantly benefit the maritime industry. Prudence would dictate seeking legal assistance to conduct a due diligence review of risks in advance of any UAS flights.
Conclusions and Recommendations
In sum, UAS offer flexibility for a broad number of business opportunities that may reduce cost and time, while integrating into existing maritime safety practices and operations. In view of these developments, industry stakeholders should—depending on their business challenges—focus on UAS now, and consider whether it is time to enter this market to get ahead of the competitive curve. Given the complex legal and regulatory landscape in which UAS operate, clients should consult with counsel as part of their UAS review to assist in evaluating regulatory, technical, legal, and public policy issues in order to prudently mitigate risk while assisting with business solutions.