Autonomous cargo ships look to upend the logistics industry

Share of Delivery Cost, by Part of Journey

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The world's first semi-autonomous cargo ship could begin operating in the second half of 2018 and become fully autonomous by 2020, according to The Wall Street Journal.

The ship was built by Yara International and Kongsberg Gruppen, two Norwegian firms, and is equipped with sensors, cameras, radar, and a global positioning system (GPS) that give it the ability to navigate through the seas and dock on its own.

Autonomous cargo ships could disrupt the $15.5 trillion logistics business, but there are still issues that must be resolved before they become a reality.

They'll significantly reduce shipping costs. Line haul deliveries, which are the stage of the delivery process where goods are transferred between two major cities or ports, make up 37% of the cost of the entire delivery process, the second most expensive part of the delivery process. Autonomous cargo ships could lessen those costs by decreasing the number of human operators needed on a ship at any given time. And that could save operators millions on labor costs — the average annual salary of water vessel workers is about $81,000 according to the US Bureau of Labor Statistics — that they could ultimately pass along to their clients. And the savings may not just be with niche goods — about 90% of all goods purchased by consumers travel on a ship at some point, so it's likely the cost savings will be widespread.
But ensuring these ships' safety could be a challenge. Challenges ranging from the mundane (think congested shipping lanes) to the extraordinary (unexpected storms or piracy) will certainly test the capabilities of self-piloted ships, no matter how advanced their AI.

Yara and Kongsberg could be first to market, allowing them to iron out any potential issues before they face competition. These firms see the autonomous shipping business as a significant long-term opportunity, and that could be a smart move because they might be able to get to market soon and figure out how to make autonomous ships work smoothly before others are even competing in the space — right now no other firm has plans to launch a similar service before Yara and Kongsberg.

Businesses are investing in technology to better manage their vehicle fleets. These investments in fleet-management are transforming commercial vehicle operation and leveraging analytics to generate major gains in efficiency.

Large companies have been building up their fleet-management portfolios. Verizon, in particular, has been aggressive, spending billions to purchase two fleet-management leaders in the summer of 2016 to take a clear lead in the North American market. The potential profit in the burgeoning fleet-management space is pushing Verizon and others to make big plays to guarantee their share as the market continues to grow.

Peter Newman, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on fleet management that:

Analyzes the potential ROI and other benefits of the various use cases.
Identifies best practices fleet operators should take when implementing a fleet-management solution.
Examines multiple use cases of fleet-management solutions.
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