Pirates. When we think about them, most of us think of a bygone era when Jack Sparrow-esque characters sailed around the oceans under the skull and cross bones.
Maritime piracy does, however, exist to this day. Since 2011, piracy has become less prevalent yet, its presence continue to have ramifications for global trade and the international economy.
Since 2010, incidents of maritime piracy have dropped off rapidly.
The Gulf of Aden, a narrow section of water where the Red Sea meets the Indian Ocean between Yemen and Somalia, has become a hot spot for pirates to take over ships and hold them for ransom. This stretch of water, only 920 miles long and 300 miles wide, carries 95% of the European Union’s sea trade and up to 20% of global trade. It was also the location of 53% of all incidents of maritime piracy in 2009.
This map depicts areas under threat of piracy from 2005 to 2010 and notes where “anti-shipping messages” were received.
Most of these attacks are classified as kidnapping as opposed to hijacking because crew members are held hostage for a ransom. In 2010, Somalian pirates are estimated to have made $238 million in ransom payments.
While this is no small sum, it pales in comparison to the cost a hijacking inflicts on global markets. Oceans Beyond Piracy estimated the total cost of maritime piracy in 2010 to be between $7 and $12 billion dollars. These figures take into account increased spending on security, sky rocketing insurance premiums, and rerouting ships to avoid the horn of Africa altogether. One World Bank report labelled these costs as a tax on global shipping as costs seep beyond just those who choose to send ships through the Gulf to all shipping companies and routes world wide.
In order to reduce the frequency of pirate attacks on ships, the European Union has partnered with private shipping companies to create The Maritime Security Centre – Horn of Africa. In place to monitor and track each ship that passes through the Gulf, this organization will operate on a budget of 6.3 million Euros in 2016.
A shipping vessel is accompanied by war ships to ensure safe passage through the Gulf of Aden. These services are expensive to provide and can act like an extra tax on shipping costs.
The Maritime Security Center also established the Internationally Recommended Trade Corridor, boundaries of the safest way to travel through the Gulf of Aden and outlined a convoy schedule by which ships can decrease their likelihood of being attacked by sailing together. A collection of war ships from a group of participating nations patrol the Gulf along with air support to minimize risk.
Significant investment in the region’s safety has paid off. From 197 attacks on ships by Somalian pirates in 2011 to 0 attacks in 2015, government and private measures have successfully diminished and maybe even eradicated the threat of piracy in the Gulf of Aden.
Even though attempted and successful attacks have dropped to zero, the cost of maintaining safe passageways around the Horn of Africa will continue to put economic pressure on shipping companies. Costly security improvements on board ships, demands for increased pay among crew members, and rises in insurance premiums have added to the cost of maritime shipping. Such increases have likely led to more expensive products for consumers as well.
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