Remarks of Commissioner Maffei: Marine Transportation System Innovation Science and Technology Conference Keynote

On March 15, 2021, Commissioner Maffei presented the Keynote Address at the Sixth Biennial Marine Transportation System Innovation Science and Technology Conference hosted by the National Academy of Science’s Transportation Research Board. The theme of the conference was “Advancing the Marine Transportation System through Automation and Autonomous Technologies.”

In his address, he acknowledged the “wow” factor of some of the technological innovations to be discussed at the conference. He also discussed why, as humans, we seek to invent technologies and what the inadvertent consequences of technology can be. He stated, “But our sense of awe must be tempered by a sober understanding that technological innovations are a tool – a means – and not an end in themselves. And that realizing the hoped-for benefits of technology depends on whether and how it is implemented in a complex and heterogeneous global civilization.”

His full prepared remarks follow:

Thank you to the Transportation Research Board for convening this important conference and a special thank you to the sponsors – the U.S. Committee on the Marine Transportation System.

Please note that I am one of five commissioners on the Federal Maritime Commission and my views are mine alone and not those of the Commission as a whole.

Looking through the program of this conference, I think it is appropriate for us to take a moment to say “wow.” Particularly for those of us who do not often encounter the emerging blue technologies that many of you work with every day, the examples of innovations are truly impressive.

It has only been within the last hundred years or so that we’ve moved from bulk shipping to containerization. And – in just the last 55 years – from ships able to carry a maximum of 1,500 20-foot long containers to 24,000 today – which is about 30 million cubic feet of cargo, enough to fill a fleet of about 10,000 18-wheel trucks. And with some of the technologies being discussed at this conference, we may see even larger ships with vastly improved propulsion, navigation, and cargo management systems – all of which managed by a smaller crew, or maybe someday, no on-board crew at all.

We are seeing new more steam-lined ship designs that will incorporate smart systems to maximize energy efficiency. And, after more than a century’s absence from commercial shipping, we may soon see the return of the sail. But these are not your great-grandfather’s sails, they are super sails up to 80 meters long that can automatically retract when it’s time to go into port.

Vessels will have computer-driven perception abilities allowing them to ‘see’ in four dimensions for unparalleled situational awareness. Their navigation systems will be capable of making determinations far faster than a person using a computer, and they could have networked cargo management that – in theory – could allow anyone anywhere to know exactly where a particular container is at any given moment. Some of the containers themselves may be smart enough to alert someone if they are in the wrong place or filled with the wrong goods.

Unloading ships used to entail the use of strong backs and large hooks. But the sort of work that Terry Malloy did in On The Waterfront is long gone, replaced by the high tech work of massive cranes and container positioning systems. In places like Rotterdam and several Chinese ports, the cranes and trucks are already controlled remotely and no human being needs be “on the waterfront” at all. It is even possible that automated aerial drones might someday load and unload some of a ship without them needing to stop at every port.

Indeed, as we advance our artificial intelligence – or A.I. – systems, we may need fewer remote operators at ports, on ships, and even in control centers. The distinction between port and inland may become more blurred with artificial brains determining the most efficient mode for any given container given its contents, destination, and the travel conditions of every given mode everywhere.

And, of course, I am merely scratching the surface of what can be extrapolated given the work going on today. It is truly a time full of “wow” moments in maritime technology.

But our sense of awe must be tempered by a sober understanding that technological innovations are a tool – a means – and not an end in themselves. And that realizing the hoped-for benefits of technology depends on whether and how it is implemented in a complex and heterogeneous global civilization.

So what is the purpose of new technologies when it comes to maritime transportation?  I submit there are three basic reasons to develop and implement new technologies:

The first is to increase the productivity and efficiency of the maritime transportation system. And along with those increases, the resulting economic benefits.

Second, improved service and reliability for the customers and stakeholders of all sorts – those that utilize the maritime transportation system.

And third, to improve sustainability – the health of our natural environment; the social welfare, safety, and security for our people; and governance that ensures basic fairness and transparency.

I must note that new technologies do not per se do any of these things. Technologies can even reduce efficiencies and productivity sometimes – not on their own but in the way that they are used. Anyone who has a smart phone knows that technology can create distractions that ultimately eat away at productivity. I did not bother with the New York Times crossword every day when I had to find the physical newspaper. If you don’t think your smart phone has that distracting effect on you, consider the way they are used by kids?

Technological developments can also make things more difficult for customers of various kinds. This is particularly true when innovation for the sake of economic growth has the collateral damage of making new demands or inconveniences on customers and other stakeholders.

We know technology can often work against sustainability. Even though the developments of the steam engine, jet airplane, and mass-produced gas-driven vehicles created colossal economic gains in the last 150 years, they also have led to climate change. Now, we look to technology to break our technology-spurred addiction to fossil fuels.

So, keeping in mind that new technologies often come with cons as well as pros, let’s look at the first of my three reasons to innovate – increasing efficiency and productivity leading to economic benefits. In the case of ocean shipping, new technology can make shipping more cost effective. Consider the development of more fuel-efficient engines. Today, fuel costs represent 50-60% of ship operating costs, depending on the type of ship and service. If you can reduce the cost of bunker fuel though advanced propulsion systems, ocean vessels will be able to move even more containers at less cost per container.

But to what end?

More productivity on the ocean will only lead to disaster if not accompanied by similar productivity gains throughout the supply chain. That’s exactly what we have seen in recent weeks with the unprecedented import boom that has accompanied the COVID-19 pandemic. It has pushed the carriers to utilize closer to the full capacity of their fleets resulting in lines of sometimes more than fifty container ships waiting to get into America’s largest port complex. Of course, the advanced technology on the ocean-side is not the only story but it does illustrate how advancements in productivity in one part of the system can create real problems if others do not realize similar productivity gains.

The automation and data management technologies that many of you work on might very well revolutionize port operations and allow them to efficiently load and unload ships even bigger and even more frequent than the ships calling at L.A.-Long Beach today.

But then, there is the vast landside transportation network and supply chain infrastructure that must efficiently move the cargo away from the port and to its destination. The interconnectivity of the supply chain was particularly evident at the beginning of the pandemic when port and rail workers were deemed essential but warehouse workers and even truckers in many states were not. Containers of PPE –needed to protect heath providers from COVID-19 – couldn’t be moved efficiently when containers full of toys, sneakers and other consumer good clogged the supply chain because the workers that handled consumer goods were not deemed “essential.”

But even if technologies are implemented in a way that fully acknowledges the interconnectivity of the supply chain, do we really need to move more cargo – even if the cost to move it is much less?

What if digital 3-D printing becomes much less expensive and more versatile? As cheaply and as quickly as we can get our clothes and consumer goods now, if we can print them ourselves, the demand for bulk ocean shipping could decline dramatically. I doubt it would because there will still be certain items in high demand that can be manufactured so cheaply and supplied in bulk that it won’t make practical sense to use the 3-D printer for them. Furthermore, there will be huge demands to move the raw material to feed the 3-D printers. We are already seeing the precursor of this in Houston where there is a closer parity of exports to imports than most anywhere else in the U.S. because agricultural exports are supplemented by outgoing containers full of petroleum resin beads.

There is also a real values-laden question to consider of whether container-shipped goods really add to our quality of life or are more akin to video games on a smart phone – distractions from what really matters. Indeed, what would the impact on demand for ocean shipping be if we all followed Marie Kondo’s advice and asked whether an item would “spark joy” before we ordered it?

For my part, I do believe that – on balance – global ocean trade is a good thing and could be even better if expanded to include more nations and more stakeholders. That said, in my view, we must address the problems that container shipping exacerbates, such as the waste from old consumer goods and job dislocations created by yet more things being made overseas.

Foremost on my mind right now is the startling imbalance between imports and exports. Even while record numbers of containers full of furniture, electronics, and other consumer goods mainly made in Asia are coming into the U.S., American farmers are finding it difficult to get hold of containers and cargo space to export their products. The main reason is that the carrier operators make so much more money on imports than exports that they often see it as more profitable to load a ship up with empties and get it back to Asia ASAP. To me, this is an economic imbalance that new technology should address – finding ways to get farm products and other exports into containers and on ships so efficiently that carriers can’t help but bring them to our export markets.

Now, turning to the second reason for innovation – to benefit customers. Of course, in discussing the potential downsides of unfettered productivity and efficiency gains, we have already touched on the effect on customers.

That’s because the customers of the ocean transport system are all of us. By volume, about 90% of everything we interact with is transported by container ship. So, end-consumers are the biggest group of the customers of ocean shipping.

But there are others – there are the shippers who depend on container shipping for their supply chains to make sure their goods can reach their final consumers – some importing them to sell in the U.S. and some exporting their products to sell overseas. Many shippers are businesses that depend on shipping parts, ingredients, or raw materials to make value-added products.

For these customers, the capacity to track cargoes is key and the more flexibility they can gain in where and when they ship, the better. Reliability of knowing space will be available when the shipper books it is something many shippers complain is missing today as their containers often get bumped like stand-by passengers on a passenger plane even though they made a reservation. These shippers are looking for predictability and the blue tech innovations that many of you are working on will help tackle many of these challenges.

Of course, cost is key and – in an industry with vast fluctuations of price between high-traffic and low-traffic times – data-driven financial innovations may be helpful in evening out these cycles.

Beyond shippers and consumers, there is the myriad of stakeholders involved in shipping: the container ship lines; the terminal operators; railroads and trucking companies; and companies that provide a plethora of logistics, freight forwarding and customs brokering services. For so many of them, integrating and making information available so they can make the best possible resource allocation decisions is of great value. Collaboration among stakeholders is key – provided it can be done while still preserving competitive pricing.

And as we consider stakeholders in ocean transportation, let’s not forget the workers themselves. This pandemic has taught us that, now more than ever, labor matters. As mentioned earlier, ocean shipping is less labor-intensive today than it has been in the past. Yet, when longshoremen and maritime workers are sidelined by a pandemic, the system backs up. Tens of thousands of people around the world are indeed still needed to direct the inflow and outflow of containers and coordinate the logistics in this huge interdependent system.

We may increase automation in the future and that may increase capacities, but we are a long time away indeed from freeing the system of the need to have human beings on the front-line even if they may be virtually present rather than physically on a ship or crane or truck.

Since I include workers in the group of stakeholders that ideally would benefit from improvements in technology, I am glad to see part of this conference will consider the job dislocations that occur as more of the system becomes automated. I’ve spoken to many workers, union officials, and labor experts. They know automation will be increasing at ports and on ships. But the way automation is implemented matters. They want it to maximize new opportunities for workers and not simply replace them.

Not all innovations lead to worker dislocation, of course, and parts of this conference will consider ways to make work in the maritime transport sector safer and less physically and psychologically taxing by relieving workers of monotonous and repetitive tasks with automated systems.

Ensuring the well-being of maritime and other transportation workers also fits in with the improving social welfare part of sustainability. So let’s turn to sustainability, the third reason I enumerated as to why we should develop new technologies.

There is no question that in terms of sustainability for both the planet and its people – automation presents a vast array of opportunities. Both seafaring and work at ports is historically very dangerous work.

Whether it’s systematically checking the lashings on high container stacks while in choppy waters, positioning containers on trucks and trains in busy ports, or tying up a ship with ropes heavy enough to moor skyscraper-sized vessels, so many jobs can – with one misstep – lead to serious injury or death. They are tough jobs, but someone’s got to do them. Or not? Automation, machine-learning, and eventually AI could take the human body out of harm’s way during maritime’s most dangerous duties.

The information technologies being worked on here can also add to transparency of the whole ocean transport system – an important element of ensuring all the participants in the system can make the decisions they need to make their own operations sustainable.

Perhaps the biggest positive impact the technologies in this conference can make is to reduce pollution. Just last week, governments controlling a major share of the world’s merchant fleet submitted to the IMO what they called a “moon shot” proposal for a $5 billion fund to catalyze the research and development needed to help shipping meet the UN’s decarbonization goals. This proposal has the support of countless industry groups that include the big container lines and many other stakeholders. Soon, with a combination of carbon neutral fuels, wind and solar power, and battery technology we may see net-zero ships that can come close to matching the speeds of today’s fossil fuel burning vessels with far less cost.

Thanks to new sorts of cargo vessels, new kinds of propulsion, and more efficient cargo management, we theoretically might be able to transport some things by sea that we currently transport on jets, curtailing vast amounts of carbon emissions from jet engines.

And someday the intermodal benefits of A.I. systems may reduce the environmental impact of moving cargo the entire way from manufacture to end user.

Whether a given technological innovation accomplishes any of these goals – efficiencies, customer and stakeholder value and sustainability – depends on whether it can be implemented at all and in such a way that it truly adds value.

In other words, what I am asking you to do at this moment is to consider not just WHAT new and wow-worthy maritime technologies we can develop but HOW we can implement them in such a way that they improve the lives of all stakeholders in maritime transportation.

So before we begin the panels and presentations on truly revolutionary technologies that are in development, let’s take a moment to consider the mundane and prosaic issues involved in implementing technological change in a complex world.

The key challenge is that we are always integrating new technology into an existing system that must continuously operate. The kinds of technologies and the rate of modernization will differ greatly across a worldwide system.

Too often, futurists convey an unrealistic world where everything changed at once and with unprecedented coordination. Some science fiction shows a world where everyone has access to the same technology of say flying cars and hyper-advanced computers.

But the real world doesn’t work like that. Technologies are phased in at best and implemented through trial and error at worst.

In the real world, we see people watch live soccer games from across the planet cooking their dinner on a smoky wood stoves and others who work in state-of-the-art factories but lack indoor plumbing in their homes.

When General Motors made the first electric car, the EV-1 in the late Nineties, they found it just didn’t appeal broadly enough and it may partly have been GM’s fault for not marketing the car and in a bad joke, many EV-1s went to the car crushers.

It’s never just a matter of having the technology and saying, “let’s plug it in.” Sometimes, a network of plugs must be installed first.

Inevitably, technology is scattered out and gradual in the maritime world as well. While we have digital technology that could keep track of every container, its cargo and destination, in many places, a physical piece of paper – a bill of lading say – is still required. And reservations abord ship or other paperwork is still faxed.

Another example takes us to the beginnings of container shipping: truck company owner Malcom McClean could quickly retrofit existing ships to carry his containers, but it took quite a while for the port infrastructure that could efficiently load and unload them and the truck and rail developments needed to fully realize the benefits of container shipping.

The example of McClean brings up another issue with innovation that I myself am very familiar with: the lag in public sector laws and policies that can steward such technologies. At the beginning of commercial container shipping, McClean took containers off the trucks and placed them on a ship to sail them from New Jersey to Texas. Once there, they went back on the road. The main U.S. regulatory agency then – the Interstate Commerce Commission – maintained tight regulations on trucking that discouraged such creativity. But this was different enough that no existing set of policies applied – except that McClean was forced to sell his trucking company if he wanted to stay in the ocean shipping business.

In this example, we are speaking of one of the simplest innovations – the use of standardized box containers – to transport. Imagine the issues public agencies have and will have in keeping up with the high-tech automated technologies that are the subject of this conference.

At the Federal Maritime Commission, we often encounter such difficulty. The central law we administer is the Shipping Act of 1984. Back then, a mobile phone was the size of a concrete block, a desktop computer was as big as a suitcase, and the largest container ship had a capacity of 4,600 TEU – about two-tenths of today’s biggest ships – and its crew still had sextants to check its position. Today, we have instant satellite communication and GPS and many people at this conference – like the Adm. Timme’s wife – can access the entire Internet through their wristwatch.

Shipping has vessels with up to five times the capacity owned by a third as many large shipping lines all run by foreign owned companies. And yet we have a 37-year-old shipping law. That means, quite often situations arise where we simply have no regulatory levers to affect a policy that couldn’t have possibly been anticipated with the law was written. As these arrive, Congress makes changes and we’ve had updates several times, but the central legislative framework remains outdated.

Given the reality that legislative changes and changes in public perception will lag far behind innovation creates huge challenges to policymakers trying to create conditions for the safe and efficient integration of automation.

Let me take a landside technology integration issue as a simple example. Imagine a city in the near future considered three possibilities – to ban human driven vehicles and have all automated, to allow both automated cars and human divers, or to not allow automated cars at all.

Assuming no flaws or bugs in programing, the city with all automated cars will be by far the safest. But will the city council think it so and pass the ban on human driven cars? Of course, many in the public will resist saying they do not trust the automated cars to be safe. Some of them and some others will assert that driving is a ‘right’ that can not be denied. Others will bring up equity issues that some people can’t afford to use automated cars or their livelihood is driving and they would be displaced if all cars in the city were automated.

So, the City Council decides it should let individuals decide and allows both automated cars and driver-operated cars. Much of the safety advantage of the automated cars disappears when they have to navigate around unpredictable human drivers. It’s still statistically safer since fewer vehicles will be making all too common human driving mistakes but there will be far more crashes than with all automated, and no politician is going to want to be blamed for the first fatality in a person-driven car crash with an automated car.

So, in the end, the City Council is just as likely to side with the ever-present conspiracy theorists who argue that the automated cars are a deep state plot and should not be allowed at all. The City Council members will probably not agree with the conspiracy theories but will decide it’s best simply to ban the automated cars altogether.

If you work with automation you are probably familiar with similar issues and know how overly simplistic my example is. And always remember that when it comes to making political decisions, logic and peer-reviewed studies about safety have little (and sometimes negative) sway on public opinion. If you don’t believe me on that point, ask the 45 percent of American adults who doubt vaccine safety, the 40 percent of U.S. adults who do not believe in human evolution, or the 26 percent of Americans, who when asked to choose, thought the Sun revolved around Earth.

In maritime transportation, getting permission to use automated vehicles may be relatively easy since the high seas are governed primarily through international agreements – mostly those managed under the auspices of the IMO. Of course, getting permission to come into port is key but there are still relatively few decision makers involved. This means that, realistically, we can expect automated ships and port vehicles long before automated trucks and inland cargo transport systems. And again, for a different reason, we could see scores of ships lined up outside congested ports that can unload cargo faster than the inland transport system can handle it.

There are also competitive reasons why new technologies are implemented unequally. Perhaps, all automated vehicles in a city could share all of their navigational information, but ask the private sector shipping to share all of the data regarding its cargo, excess capacity, travel times, and so forth and you will run into instances where carriers may have access to data but don’t want to share for competitive reasons.

Furthermore, as an antitrust regulator, I want to promote the benefits of competition and won’t allow them to share too much. For example, if a carrier wants to improve its service by obtaining space on another carrier, it may only do so under agreements filed with and examined by the Federal Maritime Commission to ensure that there is still competition.

Many government policies restrict how technologies can be used. Cabotage rules such as those in the Jones Act certainly contain restrictions that could slow the implementation of certain technologies but they have advantages – such as ensuring a U.S. sealift capacity – that many policy makers like me see as essential.

My point here isn’t to say that government policies are necessarily good or bad for technological advancement but that government runs on a different pace and is driven by different forces and priorities than those that drive the development of the technologies.

In the end, science and technological advancements will always outpace change in government and society­ – and even business – so all we can do is be aware of that as we develop them.

The mismatch of technology and society can often be blamed for the failure of technological changes to catch on and last. Napster, hoverboards, Google glasses and the Concorde SST are a few examples.

In commercial shipping, the demonstration of nuclear-powered cargo ship NS Savannah was such an example. Its propulsion was state of the art allowing it the capacity to circumnavigate the earth 14 times at 20 knots without refueling. But it was a combination of cargo and passenger ship and thus demonstrated neither capability well. Also, by having the government develop the ship as a showcase technology in the early 60s rather than waiting for the private sector to develop the technology in a more commercially viable way, it made nuclear propulsion appear to be too expensive to ever be practical. The public had safety considerations – debatably both real and imagined – and several nations had laws prohibiting nuclear powered ships from calling at their ports. In the end, the Johnson Administration overextended by its social programs and the war in Vietnam was not willing to take on a political effort to save the potentiality of nuclear-powered cargo ships.

Perhaps a nuclear-powered craft is too expensive and produces too much dangerous waste to be practicable for commercial shipping. I don’t know – I’m no expert. But, what makes it so clear to me that it is more society than technology that shut down nuclear propulsion in commercial shipping is the fact that the technology was indeed implemented and continues to advance on naval vessels. Whatever its downsides or safety risks, the Navy is willing to deal with them and civilian society is not.

Another area where it seems technological development in one area has lagged behind affecting advances of technology in other areas is the vulnerability of so many of our data systems to cyber attacks.

The world wide web itself was developed rapidly by so many people around the world and had such an emphasis on openness that cyber security was more of an afterthought – at least in terms of system-wide cyber security. And perhaps no one could have predicted quite how much our systems are interconnected and thus how challenging it is to keep any given company, NGO, or government agency safe from hackers and viruses.

The devastating NonPetya malware that hit Maersk and its subsidiaries in June of 2017 had ripples throughout the entire global ocean transport system and cost Maersk a reported $300 million. That’s been the worst but not the last cyber attack and defending against such attacks is by necessity one of the focuses of this conference on new technologies – most of which are at least in theory vulnerable to cyber attack. Ocean shipping may yet become safe from high seas piracy but virtual piracy is much harder to defend against.

No one could really have predicted how vulnerable systems would be to cyber attacks or how costly they would be. The truth is that in all of the areas touched by this conference, it’s far easier for me to tell you to be mindful of implementation issues than it is to foresee what any particular implementation problem may be.

One of the fathers of quantum mechanics, Danish Physicist Niels Bohr would sometime relate that “Prediction is difficult, especially about the future.” He saw that even the most advanced science – or maybe especially the most advanced science – could only reliably present probabilities rather than certainties. In this conference, I hope all of you keep in mind that the future of ocean transportation can not be predicted but we can effect it such that the probability is that it will be going in the right direction.

Daniel B. Maffei is a Commissioner with the U.S. Federal Maritime Commission. The thoughts and comments expressed here are his own and do not represent the position of the Commission.