NATIONAL OPEN UNIVERSITY OF NIGERIA (NOUN)

SCHOOL OF POSTGRADUATE STUDIES

FACULTY OF LAW

MASTERS IN LAW (L.L.M) PROGRAMME

(2023/2024 ACADEMIC SESSION)

COURSE TITLE:

COURSE CODE: JIL819: INTERNATIONAL MARITIME LAW 1

SEMINAR TOPIC:

THE IMPACT OF ARTIFICIAL INTELLIGENCE ON CARRIAGE OF GOODS BY

SEA

PRESENTED BY:

OGUN OLAMIJI SAMSON (NOU232032583)

LECTURER:
DR. MARTINS ISHAYA

DATE OF PRESENTATION:
1st May 2023

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1. INTRODUCTION

The carriage of goods by sea is a critical component of global trade, responsible for transporting
around 90% of the world's goods. The shipping industry has undergone significant technological
advancements in recent years, including the implementation of artificial intelligence (AI)
technologies. These technologies have the potential to significantly impact shipping operations,
logistics, and risk management. This Seminar paper explores the impact of AI on the carriage of
goods by sea, drawing on a range of academic and industry sources to provide an overview of
current and potential future developments in the field.

Artificial intelligence (AI) has the potential to significantly impact the carriage of goods by sea,
including shipping operations, logistics, and risk management. Here are some ways in which AI
can impact the carriage of goods by sea: Autonomous Ships: AI technology can enable ships to
operate autonomously, without human intervention. This can reduce the risk of human error,
increase efficiency and lower operating costs. Autonomous ships can also operate around the
clock, allowing for faster delivery times. Predictive Maintenance: AI can be used to predict when
a ship's machinery needs maintenance, which can reduce downtime and improve reliability. This
can also improve safety by identifying potential equipment failures before they happen. Cargo
Optimization: AI can be used to optimize cargo loading, taking into account the ship's stability,
weight distribution, and other factors. This can improve efficiency, reduce fuel consumption, and
ensure that the cargo is transported safely. Risk Management: AI can be used to analyze data
from a variety of sources, including weather forecasts, cargo manifests, and shipping routes, to
identify potential risks and suggest ways to mitigate them. This can reduce the risk of accidents
and other incidents, and improve the overall safety of shipping operations. Environmental
Impact: AI can help shipping companies reduce their environmental impact by optimizing routes,
reducing fuel consumption, and minimizing waste. This can help to reduce greenhouse gas
emissions and other forms of pollution.

2. LITERATURE REVIEW

This seminar paper evaluates relevant provisions contained in articles and foreign conventions on
Artificial Intelligence and Carriage of Goods by Sea vis-a-vis other Nigerian Law as well as
related works of scholars and internet sources.

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3. RESEARCH METHODOLOGY
Doctrinal analysis, which is a research methodology that involves the critical examination of
legal materials, such as statutes, case law, and legal commentary, will be adopted to understand
the concepts of Artificial Intelligence, Carriage of Goods by the sea as in the case of this seminar
or any area of law for this Seminar..

4. OBJECTIVE

In this seminar paper, the aim is to show how AI has the potential to significantly impact the
carriage of goods by sea, improving efficiency, safety, and sustainability and as AI technology
continues to advance, it will bring about even more innovation in this area of maritime business.

5. DEFINITION OF KEY CONCEPTS

It is instructive at this juncture to define the major concepts that underpin this seminar paper to
lay a proper background for the discussions that will follow:

Definition of Artificial Intelligence

Artificial Intelligence (AI), a term coined by emeritus Stanford Professor John McCarthy in
1955, was defined by him as “the science and engineering of making intelligent machines”.1

Artificial Intelligence (AI) can be defined in several ways, but broadly speaking, it refers to the
development of computer systems that can perform tasks that usually require human intelligence.

Here are some other common definitions of AI:

a) AI is the branch of computer science that focuses on creating intelligent machines that can
perform tasks that require human-like intelligence, such as visual perception, speech recognition,
decision-making, and language translation.
b) AI is the ability of machines to perform tasks that typically require human intelligence,
including learning, reasoning, perception, and problem-solving.

1
https://hai.stanford.edu/sites/default/files/2020-09/AI-Definitions-HAI.pdf

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c) AI is a field of study that aims to develop computer systems that can perform tasks that
would normally require human intelligence, such as recognizing patterns, understanding natural
language, and making decisions based on complex data.
d) AI is the simulation of human intelligence processes by machines, especially computer
systems. These processes include learning (the acquisition of information and rules for using the
information), reasoning (using rules to reach approximate or definite conclusions), and self-
correction.

Definition Of Carriage Of Goods By Sea

Carriage of goods by sea refers to the transportation of goods by water using a vessel or a ship. It
involves the movement of cargo from one port to another, either domestically or internationally.
Carriage of goods by sea is a vital component of international trade and commerce, and it plays a
crucial role in the global economy. The process involves various parties, including the shipper,
carrier, consignee, and other intermediaries, and is subject to various legal and regulatory
frameworks, including international conventions and domestic laws.

The law of Carriage of Goods by Sea is generally referred to as Dry Shipping Law because it
mainly focuses on the legal implications of the agreements for the transport of cargoes by sea
and for the chartering of vessels.2 Nigerian laws governing the carriage of goods by sea include
the Merchant Shipping Act 2007 (which was enacted to replace the old Merchant Shipping Act
of 1962.) The Act contains provisions that govern various aspects of shipping operations,
including the carriage of goods by sea. Some of the key provisions of the Act relating to carriage
of goods by sea include:

Liability for Carriage of Goods: The Act provides that a carrier is liable for any loss or damage
to goods that occur during the carriage by sea, unless the loss or damage was caused by an act of
God, act of war, or inherent vice in the goods.

2
International Maritime Law I Course Material

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Time for Delivery: The Act provides that a carrier must deliver the goods within a reasonable
time, taking into account the nature of the goods, the usual route of the voyage, and any other
relevant factors.

Bills of Lading: The Act provides that a carrier must issue a bill of lading to the shipper of
goods, which is a document that serves as evidence of the contract of carriage and the receipt of
the goods.

Freight Charges: The Act provides that a carrier may not charge more than the agreed freight
for the carriage of goods, and that the freight must be paid before delivery of the goods.

Limitation of Liability: The Act provides for limitation of liability for carriers in certain
circumstances, such as when loss or damage is caused by an act or omission of a third party, or
when the loss or damage was caused by the fault or neglect of the shipper.

In addition to the Merchant Shipping Act, there is the Carriage of Goods By Sea Act 2004 3 as
well as ratified international conventions that relate to the carriage of goods by sea, including the
Hague-Visby Rules, which govern the rights and responsibilities of carriers and shippers in
international maritime trade4 , the Marine Insurance Act and the Hamburg Rules ratified into the
United Nations Convention on Carriage of Goods by Sea (Ratification and Enforcement) Act
2005.5

6 BENEFITS OF ARTIFICIAL INTELLIGENCE VIS-A-VIS CARRIAGE OF

GOODS BY SEA

(a). Autonomous Ships:

One of the most significant potential impacts of AI on the carriage of goods by sea is the
development of autonomous ships. Autonomous ships use AI technologies to operate without
human intervention, allowing for faster delivery times, improved efficiency, and reduced

3
CAP C2 LFN 2004
4
Carriage of Goods by Sea Course Material.
5
https://iclg.com/practice-areas/shipping-laws-and-regulations/nigeria

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operating costs. According to a report by the International Transport Forum, autonomous ships
could reduce maritime transport costs by up to 22%. However, there are also concerns around the
safety and regulatory implications of autonomous ships, which will need to be addressed before
they become widely adopted.6

(b) Predictive Maintenance:

AI can be used to predict when a ship's machinery needs maintenance, improving reliability and
reducing downtime. Predictive maintenance can also improve safety by identifying potential
equipment failures before they happen. According to a report by DNV GL, predictive
maintenance could reduce maintenance costs by up to 40% and reduce downtime by up to 50%.
However, the implementation of predictive maintenance requires significant data analysis and
infrastructure investment, which may be challenging for some shipping companies.

(c) Cargo Optimization:

AI can be used to optimize cargo loading, taking into account the ship's stability, weight
distribution, and other factors. This can improve efficiency, reduce fuel consumption, and ensure
that the cargo is transported safely. According to a report by the European Union, cargo
optimization could reduce fuel consumption by up to 10%. However, cargo optimization requires
significant data analysis and collaboration between shipping companies and cargo owners, which
may be challenging to achieve.

(d) Risk Management:

AI can be used to analyze data from a variety of sources, including weather forecasts, cargo
manifests, and shipping routes, to identify potential risks and suggest ways to mitigate them.
This can reduce the risk of accidents and other incidents and improve the overall safety of
shipping operations. According to a report by Allianz, risk management using AI could reduce
the number of marine insurance claims by up to 30%. However, risk management using AI
requires significant data analysis and infrastructure investment, which may be challenging for
some shipping companies.

6
International Transport Forum. (2018). Maritime transport and the climate challenge: Using autonomous ships to
reduce CO2 emissions.

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(e) Environmental Impact:

AI can help shipping companies reduce their environmental impact by optimizing routes,
reducing fuel consumption, and minimizing waste. According to a report by the International
Maritime Organization, the adoption of energy-efficient technologies could reduce shipping
emissions by up to 75%. However, the implementation of environmental impact reduction
measures requires significant investment and collaboration between shipping companies and
regulators.

7 CHALLENGES ASSOCIATED WITH USE OF ARTIFICIAL INTELLIGENCE

IN RELATION TO CARRIAGE OF GOODS BY SEA

While there are numerous potential benefits to the implementation of AI technology in the
carriage of goods by sea, there are also potential negative impacts that need to be considered.
Some of the negative impacts of AI on the carriage of goods by sea include:

(a) Job Displacement

The adoption of AI technology could potentially lead to the displacement of workers in the
shipping industry. For example, the use of autonomous ships could eliminate the need for crew
members, leading to job losses.

(b) Cybersecurity Risks

The implementation of AI technology in the shipping industry could lead to increased

Cybersecurity risks. As ships become more connected and reliant on technology, they could
become more vulnerable to cyber-attacks, which could impact their safety and reliability.

(c) Dependence on Technology

The increased reliance on AI technology in the shipping industry could lead to a dependence on
technology. If there is a failure in the technology or infrastructure, it could lead to disruptions in
the transportation of goods.

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(d) Regulatory Challenges

The implementation of AI technology in the shipping industry could create regulatory

challenges. There may be a need for new regulations to ensure the safety and reliability of
autonomous ships and other AI-driven technologies.

(e) Environmental Concerns

While AI can help shipping companies reduce their environmental impact, there are concerns
that the increased efficiency and lower costs of transportation could lead to an increase in global
trade and an associated increase in greenhouse gas emissions.

8 RECOMMENDATIONS

While it is a plausible argument that AI has the potential to significantly improve the carriage of
goods by sea, there are also potential negative impacts that need to be considered. It is important
for policymakers and industry stakeholders to carefully consider these risks and benefits when
making decisions about the implementation of AI technology in the shipping industry.

Other recommended remedies for mitigating the negative impact of AI on Carriage of Goods by
Sea include:

(a) Job Reskilling

To address the potential job displacement caused by the adoption of AI technology, it is
important to invest in reskilling programs for workers in the shipping industry. This can help
them to adapt to the changing job market and acquire the skills needed to work with new
technologies.

(b) Cybersecurity Measures

The shipping industry must take cybersecurity seriously and invest in cybersecurity measures to
protect ships and their systems from cyber-attacks. This could include implementing encryption

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and secure communication protocols, regularly updating software and systems, and conducting
regular security audits.

(c) Redundancy Planning

To address the potential dependence on technology, redundancy planning should be employed to
ensure that there are backup systems in place in case of technology failure. This can help to
minimize disruptions in the transportation of goods.

(d) Regulatory Framework

To address the potential regulatory challenges, policymakers and industry stakeholders should
work together to develop a regulatory framework that addresses the safety and reliability of AI-
driven technologies in the shipping industry.

(e) Environmental Sustainability

To address the potential environmental concerns associated with the increased efficiency of
transportation, the shipping industry should adopt environmentally sustainable practices, such as
reducing greenhouse gas emissions through the use of alternative fuels and investing in
renewable energy sources.

9. CONCLUSION

In conclusion, AI has the potential to significantly impact the carriage of goods by sea,
improving efficiency, safety, and sustainability. However, the implementation of AI technologies
requires significant data analysis, collaboration between shipping companies and cargo owners,
and investment in infrastructure. While some shipping companies have already begun to adopt
AI technologies, there is still significant scope for further innovation in this field.

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10. REFERENCES

1. Web resources

2. International Maritime Law 1 Course Material

3. International Transport Forum. (2018). Maritime transport and the climate challenge:
Using autonomous ships to reduce CO2 emissions.

4. Carriage of Goods by Sea Course Material

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