Overseas Civilian Contractors

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The Other Side of Piracy – a Somalia Report Analysis

Should Shipping Companies Lower Surcharges to Reflect Lower Threat?

By Robert Young Pelton, Publisher, SomaliaReport.com at gCaptain.com

This week’s hijacking of the chemical tanker MV Liquid Velvet by Somali pirates should have brought something to the maritime industry’s attention that they have wanted to ignore: large ships just aren’t being hijacked in the frequency they once were.

We can give full credit to the maritime industry and security firms since the navy now estimates that 90% of pirate attacks are deterred by private security on board ships. Many other attacks never occurred because of the speed of the ship, weather, the implementation of best management practices, or unknown factors that encouraged pirates to look elsewhere for victims. The effect of international naval patrols, identifying pirate activity before they leave land, general attrition by more aggressive navies, legal acts, and protests by local communities have all led to the erosion of piracy off Somalia.

Erik Rabjerg Nielsen, director and head of operations and deployment for Maersk Line, announced in May 2011 that increased surcharges to cover increased security costs. Maersk Line expects its piracy-related costs to double in 2011 to $200 million to cover insurance premiums, hardship allowances and the rerouting of vessels away from high-risk zones in the region, according to Morten Engelstoft, its chief operating officer. “In 2010, one hijacking attempt was registered every six days, and in 2011 there’s been a large increase in the activity,” Nieslon said. “The problem has never been larger than right now.”

According to estimates by the London-based International Chamber of Shipping, piracy cost shipping companies as much as $12 billion in 2010.

Please read the entire post at gCaptain here

November 2, 2011 - Posted by | Africa, Civilian Contractors, Pirates, Private Security Contractor, Somalia | , , , , ,

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