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Ships change tack to avoid paying the price of piracy

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Ships change tack to avoid paying the price of piracy


In a year marked by high fuel costs and falling exports, the upsurge in piracy was the last thing the shipping industry needed.

The International Maritime Bureau has recorded more than a hundred incidents this year in the world’s most pirate-infested waters off the coast of Somalia. Shipping accounts for 90 percent of global goods transport and in 2008 pirates have raked in between 18 and 30 million dollars in ransom money. But that represents only a quarter of the real cost to ship-owners. The Gulf of Aden sees up to 30,000 ships pass through it every year. Insurance premiums were 900 dollars last year but have since risen to 9,000 dollars. On top of that, shipping companies must pay crews double for every day spent in the Gulf, and if a vessel is hijacked there are negotiators fees and trauma therapists to pay not to mention the downtime. That is why more and more ship-owners are turning to armed escorts. Dutch ship captain Anton Van Koldam explains: “I have been 22 years at sea. There has been piracy before but in the last year it has made an enormous uprise, with more violence, more weapons and hijacking. That’s one of the reasons that our company requested a navy escort in this area.” Companies that are unwillling to spend more on security also have the option of taking a longer but safer route. Avoiding the Gulf of Aden and the Suez Canal could encourage governments that rely on Canal revenues to do more to fight piracy. As economist Hamdi Abdel Azin sees it: “It can put some pressure on the government because people are now looking for a better life, for subsidies, for medical insurance, but the reduction of the revenue will affect it negatively. This can make for some political complications inside Egypt.” A company may have to pay more than 20,000 euros more per day to take the long route but it will save the 160,000 euros the Egyptian government charges for using the Suez Canal.

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