May-23-12
Today from Hiiraan Online:  _
Piracy Costing $6.9 Billion as Attacks off Somalia Reach Record
Bloomberg
Wednesday, February 08, 2012

Somali pirates cost the shipping industry and governments as much as $6.9 billion last year as average ransom payments advanced 25 percent, according to One Earth Future Foundation.

Ships are spending an extra $2.7 billion on fuel to speed up through the area because no vessel has been captured while traveling at 18 knots or faster, the Colorado-based non-profit group said in a report today. Governments spent $1.27 billion on military operations, including warship patrols, and ship owners another $1.16 billion on armed guards and security equipment.

Attacks in the Gulf of Aden, the Red Sea and off Somalia jumped fivefold in the past five years to a record 236, according to the London-based International Maritime Bureau. About 20 percent of world trade passes through the Gulf of Aden between Yemen and Somalia, which is used to get to Egypt’s Suez Canal, connecting the Red Sea and Mediterranean. It is the fastest crossing from the Atlantic Ocean to the Indian Ocean.

“The human cost of piracy cannot be defined in economic terms,” Anna Bowden, the author of the report, said in a statement. “We do note with great concern that there were a significant number of piracy-related deaths, hostages taken, and seafarers subject to traumatic armed attacks in 2011.”

Attacks off the East African country’s coast last year led to 1,118 seafarers being taken hostage and 24 killed, One Earth said. A total of 31 ransoms were paid, with the average amount increasing by 25 percent to $5 million.

Re-routing vessels away from the piracy areas probably added as much as another $680 million to shipping costs and owners paid $635 million in insurance premiums, One Earth said. Some sailors are paid twice as much for going through the area, adding an estimated $195 million in labor costs.

All those costs contrasts with the $38 million spent on prosecuting and imprisoning pirates and building up local capabilities to fight piracy, One Earth said.



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