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The impact of pirates on freight carriers?

Friday, April 3rd, 2009

The impact of pirates on materials shipments has come to the forefront of world news as thieve based in Somalia have seized ships in recent months. The problem has grown into huge proportions that are affecting the bottom line of shipping business and manufacturers around the world.

Somalia has been without a functional government for several years. A civil war ripped the country apart and the government that is officially in charge of the country is unable to stop the illegal activity on the coastal waters. The economy is in a wreck and those who were in in the unofficial armies and poor fishermen have learned to put together their skills and engage in profitable tactics that have produced what add up to between 150 and 200 million dollars in ransoms.

Armed pirates move towards a ship that is sailing around the Horn of Africa, take the crew, ship and cargo hostage, and then demand several million dollars in ransom be given in exchange for the freedom of the crew and ship. The pirates are interested only in the ransom and have been willing to release the crew and merchandise without harm when their demands are met. For a while, shipping business and foreign ruling bodies were more than willing to pay the ransoms to secure the freedom of the sailors and cargo. The pirates have been brazen, even seizing Russian tanks for a brief period of time.

The impact of pirates on freight transportation businesses has been destructive, not only millions of dollars in ransoms but costly delays. Disrupted shipments have created a new wrinkle in delivery dates as most sailors and cargos have stayed under Somali control for a month or two at a time before being released. The logistics company has the responsibility of organizing the transportation of freight and is made to appease shipment purchasers as the freight lies in Somali ports undelivered.

Multi-national incidents have accelerated as governments have chosen to respond with an dangerous military response. The military ships began patrolling international waters but have now moved into Somali national waters with the government’s approval. The military presence has slowed the pirates but the problem remains.

Where ransoms are being made, sophisticated weaponry is available. Pirates are brandishing with weapons, typically a real danger to unarmed or lightly dangerous sailors on the attacked ships. Speedboats are the vessels preferred and ships stand little chance of getting away from them.

Countries as diverse as South Korea, Japan, India, Russia and the United States have sent their militaries to escort their ships through the area. As weaponry has arrived, inevitable altercations between assaulting pirates and the opposing navies have led to the demise of pirates and innocent civilians. An Indian vessel even shot at on another vessel that was erroneously believed to be occupied by pirates, but wasn`t.

The psychological affect on civilian crews has led to near panic when suspected pirates have approached. Captured crews have been treated well so far but there’s no guarantee that this will continue.