Pirates… What Arrr They Good For?

Absolutely nothing! Pirates on television can be charmingly swarthy, but there is nothing entertaining about the reality plaguing shipping markets off the Arabian Peninsula. In recent years, the rings of ship hijackers operating off the coast of East Africa have become more sophisticated and better organized, employing more aggressive tactics, and attacking merchant vessels more boldly and violently. The relatively slow speeds of fully laden tankers have made them vulnerable to hijacking attempts. According to the International Martime Bureau Piracy Reporting Center, 43 crude tankers and 33 product tankers were among the 445 vessels attacked in 2010, with almost half the incidents attributed to Somali pirates. The escalation of piracy in one of the world’s most important petroleum trade lanes has added significantly to the price of doing business for shipowners and charterers alike. Practices to prevent and respond to piracy vary widely within the industry, but most often include measures such as deviation to avoid high-risk areas, increased insurance coverage to account for war risk and piracy, and the use of private security and armed guards. These practices have become routine for many trades out of the Arabian Gulf, adding to the overall ton-miles traveled on westbound voyages, and causing increased negotiation between ship owner and charterer over who will be stuck paying for anti-piracy measures. Download here