Posted Saturday, February 25 2012
1. INCREASED SPEEDS: $2.7 billion
Many vessels will increase their speed while they transit the high risk area, since no recorded vessels have been hijacked while traveling at 18 knots or faster. This generates significant costs to ships by substantially increasing their fuel consumption.
2. MILITARY OPERATIONS: $1.27 billion
30+ countries contributed military vessels, forces, and equipment to counter-piracy operations in 2011.
3. SECURITY: $1.06B -$1.16b
There was a rapid escalation in the use of private armed security onboard vessels in 2011. In total, private armed security cost ship owners approximately $530 million.
4. RE-ROUTING: $486 million – $680 million
In 2011, ships re-routed by hugging the Indian coastline, and transiting to the east of the piracy high risk area.
5. INSURANCE: $635m
The two major forms of piracy-related insurance are war risk and kidnap and ransom (K&R).
6. LABOUR: $195M
Some seafarers are entitled to double compensation in wages as they transit the high risk area and/or if they are held hostage by pirates.
7. RANSOMS: $160m
31 ransoms were paid to Somali pirates in 2011.
8. COUNTER-PIRACY ORGANISATIONS: $21.3m
More than 11 organizations were working on counter-piracy initiatives in 2011.
9. PROSECUTIONS AND IMPRISONMENT: $16.4m
20 countries have arrested, detained, or tried pirate suspects in recent years.
When it comes to businesses, fortunes are always at the mercy of chance. This is the reality Raju Malde, a director at Pwani Oil, one of Kenya’s biggest oil and fats manufacturers, is grappling with.