Pirate activity raising shipping costs
Pirate concerns are causing costs to rise in the shipping industry. Some vessels are choosing to avoid the Gulf of Aiden altogether, which could add millions to a ship's annual fuel bill. Stephen Beard reports.
Saudi-owned crude carrier the MV Sirius Star sits on the Indian Ocean. The ship was hijacked by Somali pirates off the coast of Kenya in November 2008. (David B. Hudson /U.S. Navy via Getty Images)
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TEXT OF STORY
Bill Radke: You may have already heard about yesterday's U.S. Navy rescue of a cargo ship captain. Richard Phillips was being held by Somali pirates, three of whom were killed in the rescue. The dramatic violence raises the stakes in the busy Indian Ocean shipping lane, and that means the cost of doing business on the seas is also going up. From London, Stephen Beard has more.
Stephen Beard: A London think-tank estimates that Somali pirates extorted more than $30 million in ransom money last year. The total cost to the shipping industry will be much higher. Insurance premiums have been rising fast.
According to some reports, covering a vessel to sail through the Gulf of Aiden are reported to has gone up 10 times in recent years. Some shipping companies now avoid the gulf and go the long way around the southern tip of Africa.
But that is expensive, says Graeme Gibbon-Brooks, a maritime security analyst:
Graeme Gibbon-Brooks: It takes about 15 days or so, depends on, obviously, how fast the ship is going. But it takes more time, and therefore the goods at the other end are that much more expensive because of the overhead.
It's that reckoned that sending one oil tanker from Saudi Arabia to the U.S. by that route would add $3.5 million to its annual fuel bill.
In London, this is Stephen Beard for Marketplace.
Comments
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05/12/2009
FYI Don,
Its not American water they are "contaminating and polluting". Its fishermen that live in a war torn country trying to protect their livelihood from massive fishing trawlers that come and take ALL the fish to precious America.
Make informed statements, get the full story first before you start calling for blood. There many views on this story on the internet, exopand your mind!
04/14/2009
Imagine after 911, the cost we will have if pirates or terrorist on our horizon learn to do it unnoticed and realize how much damage they can cause.
Congress will not act until the public becomes aware of the enormous threat that ballast systems provide for terrorist, pirates or foreign sea captains, who do not like our country, to use ships flying under foreign flags with foreign crewmen, to contaminate and pollute our waters. Until we demand protection by exposing this threat, lobbyist will push the senate to consider it a states rights issue. Virus and invasive s in water do not recognize the lines man has drawn on maps. Industry knows that log books and record keeping, are mere paper work that dose not prove procedures were followed. It is time protect our country and our waters by screening all problems of shipping offshore. Maybe if we were to build up our neglected Coast Guard to be capable of this mission we could create some jobs Sincerely
Don Mitchel
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