The Most Dangerous Shipping Route In The World Is Getting Its Own Navy

Business Insider
Tuesday, May 15, 2012
by Eloise Lee

Shipping insurance companies are taking the fight against piracy into their own hands.

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With plans to deploy a "private navy" in the Gulf of Aden — where Somali piracy is rampant — the Convoy Escort Program (CEP) hopes to have a fleet of 18 ships protecting merchant vessels by December, reports David Black at The National.

The $70 million private program is headed by international shipping insurer company Jardine Lloyd Thompson.
"The CEP is planning to buy seven 150-foot fast patrol boats, understood to be ex-Swedish Navy, and has already earmarked 11 former offshore supply vessels for purchase and conversion," details Black.

The fleet will be based in Djibouti, from where it will provide escorted passage for merchant vessels through the International Recommended Transit Corridor (IRTC). Black points out that the IRTC, between the Red Sea and the Arabian Sea, is the most dangerous shipping lane in the world.

The recommended shipping route was set up two years ago by the Maritime Security Centre - Horn of Africa in response to increased aggression by Somali pirates in the region.

Describing how pirates attack vessels in the Gulf of Aden, the International Chamber of Commerce recounts what typically happens:

"Pirates fire automatic weapons and Rocket Propelled Grenades (RPG) at merchant vessels in an attempt to board and hijack them. Once the attack is successful and the vessel hijacked, they sail the vessel towards the Somali coast and thereafter demand a ransom for the release of the vessel and crew," the organization wrote.

The National reports that there is a ton of money at stake:

Piracy in the region is costing the global economy an estimated US$7 billion a year. For the ship owners alone, every vessel sailing through the waters off Somalia is charged additional insurance premiums of between $50,000 and $80,000.

Ships opting to carry their own armed guards can be charged an additional $18,000 and $60,000 per voyage by security companies.

Although the European Union is spending more than €8m (Dh37.94m) a year to maintain a naval force in the waters - EU NavFor - its warships still cannot provide close support to all merchant vessels.

The program will ask merchants to pay a flat fee of $30,000 to $40,000 for each ship in the convoy. Up to four merchant ships can be escorted at a time by one main CEP vessel, and additional support craft covering the east and west, reports Black.

When the idea first starting getting off the ground last year, UPI reported that a British security firm in London, BTG Global Risk Partners — whose founder was a major in the Canadian Army — was advising the CEP.
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