There are two classes of AIS devices, Class A and Class B. Class A devices are intended for commercial vessels, and transmit with more power and more frequently than the Class B devices, which are primarily intended for recreational craft.
For either class, there are two kinds of devices, transceivers (transmitter/receivers, also incorrectly called 'transponders' - a term meaning transmitter/responder, a device that provides data when interrogated by an incoming signal), and receivers. As you might suppose, transceivers both broadcast their ship's data and also receive data from other transceivers. The other type of device, the receiver, collects data but does not broadcast it. In practical terms, vessels with transceivers can see each other, but tho vessels with receivers can see those with transceivers, they are invisible to other vessels.
In order to provide position, speed, heading, etc data, transceivers need GPS information. Many have a built-in GPS receiver, a few can use an external GPS via NMEA sentences. Receivers do not need access to a GPS. Typically, both transmitters and receivers make the data they collect available via NMEA 0183 and/or NMEA 2000. Some also provide the data via RS-232 or even USB.
How is the data made available to a human? Typically, a chartplotter will be connected to the AIS device via a NMEA bus and will display detected ships as icons on the display in their correct position, usually with a speed/direction vector. The chartplotter will also note Point of Closest Approach, and if that is within a settable danger radius, will sound an alarm. Tho few computers (laptops, tablets) are equipped to receive NMEA signals, adapters are available. And of course almost all computers have RS-232 and USB capabilities. This means that if you are running a navigation application on your computer, and it is one which is capable of receiving and interpreting NMEA sentences, then your computer will display nearby ships just like a chartplotter.
But... there are web applications which show AIS ship data world-wide... why would you buy an AIS unit yourself? Why not just use one of these apps on your phone?
The problem with the web-based AIS apps is one of reliability and delay. Imagine how many AIS receivers are needed to provide world-wide coverage. Now imagine the internet network that is required to collect and process all this data. It is a huge system. And there are processing delays - significant delays. And there are system and network failures. Further, making use of the web app that results from all of this collection and processing requires that you are not in a cell phone dead spot (there are plenty of dead spots in the San Juan islands, for example). All of this combines to mean that the web display will be at best a picture of the situation from some time back. I used a web app on my iPhone before we got our AIS receiver. There were times when the display showed a Washington State ferry more than five miles away, when in fact that ferry was right next to us. Kind of funny in bright sunlight, but not so funny in dense fog. If you have your own AIS receiver, you won't be depending on someone else's system with all of its inherent delays and dependability issues, or your local ability to connect to the Internet. Complexity is the Enemy of Reliability.
Coming also is the use of synthetic AToN (Aids To Navigation - buoys, etc.). For this, a VHF station on shore broadcasts AIS data as if it were an AToN at a particular spot. There is at least one of tow in Puget Sound, and you can expect more, particularly for situations where a buoy has gone missing or has drifted out of place. The synthetic AToN will show up on your chartplotter, even if you can't see it with your own eyes.
The case of the out-of-place bouy is an interesting one... suppose that a buoy has drifted 100 yeards into shallow water. Would you believe your eyes, or would you believe the display on the chartplotter?
If you never are out and about in less than good visibility, then you won't need RADAR or AIS. But if you find that you need to navigate at night or in poor visibility, then you should have both RADAR and, at the least, an AIS receiver on board.
Are they expensive? Receivers are much less expensive than transceivers. As a personal example, I traded an old iPhone for a used AIS receiver. Watch eBay and craigslist - many boats that originally had just a receiver are now upgrading to a transceiver.
A number of VHF radios now are available with built-in AIS receivers, seemingly a natural blending of capabilities. However as a standalone AIS receiver their displays are so small as to be almost ludicrous, and they provide so little information that they do little more than raise the anxiety level on board. But connected to a chartplotter, this is a viable solution.
How about the transceivers? Well, I just checked eBay, and found a new one, with a built-in GPS for $400. There are a lot more available in the $500 range. You can also spend thousands for a completely self-contained unit that includes its own display capability. I find these to be ill-conceived, since if you have a chartplotter aboard, you won't be using the display. And if you're investing this kind of money, you almost certainly have a first class chartplotter on board.
As for us aboard Eolian, we have that AIS receiver I got in trade for the old iPhone, and it is hooked up to our chartplotter. I will strongly consider getting a transceiver when the prices fall more, or when some start appearing on the used market at a lower price. In the mean time, it is wonderful to be able to see a ferry approaching Thatcher pass from the inside when I am approaching from the outside with no sightline.
(A tip of the hat to Jason for prompting me to write this!)
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