Pirates of Somalia

To take the Suez Canal or go the old school route around Cape of Good Hope? That is the question that shipping companies must now make in the rise of Somalian piracy.

Shipping vessels must decide either to risk being hijacked by Somalian pirates if they go through the Gulf of Aden, which leads to the Suez Canal short cut to Europe, or take two additional weeks to sail around the southern tip of Africa, which will increase prices for consumers. No one wants an increase in prices so buck up sailors!

How high is the risk really? 90 vessels have been hijacked this year. Sounds like a lot until you compare it to the amount of traffic going through the area. According to the Maritime Transport Sector of Arabic Republic of Egypt 20,384 vessels came knocking at the Suez canal in 2007. If as many ships attempt that route in 2008 there is a 4/10th of one percent chance that a ship will be seized by pirates. That may not seem like much but who wants to be “the one” ram-shacked by pirates? 

Another problem the pirates inadvertently created is an increase in Insurance for ships who do risk going through the Gulf of Aden–by ten fold in the last year. Is it the 100% chance of paying extortion insurance or 4/10th of a one percent of being seized by pirates that shippers are concerned about? Just a guess but, maybe the true decision maker of whether to take the short cut might be the additional price that every ship must pay if taking the short cut. 

So, what do the pirates want? What everyone wants! Money. The Saudis shipping the oil want it, the companies insuring the ships want it, and who can blame the Somalians for wanting their share too?

Pirates hold the ships hostage and ask for $300K-$1.5M in ransom money. What do they do with it? Act like good business men and buy more ships to more effectively pillage the seas. If you are imagining a group of rough and tumble barbarians acting like ancient business men, the incarnation of Jack Sparrow, think again.

When word gets out that a ship has been hijacked a bunch of guys who have been enjoying a meal at the local pirate diner in Ely, Puntland (an autonomous but not independent region in Somalia) jump up, change into spiffy clothes and ties, grab their laptops and run to shore. They are the pirates’ accountants, chief negotiators, and such. Although only a few men are pirates there is an entire industry supporting them back on shore from guards to cooks.

Somalia is an agricultural based country, one of the poorest in the world.

With fancy houses, expensive cars, fast boats, powerful weapons, clan relations to the president, and contacts in Dubai do you think that the pirates in Ely will be stopping anytime soon? Can they be stopped?

One might equate the pirates to the “mafia of the coasts”, the “drug lords of the seas”, or “terrorists of the oceans” but at least they aren’t blowing anyone up (well, not yet anyway). In fact, several legitimate catering businesses have popped up and are booming in Ely by supplying the meals that feed the hostages during negotiations. 

Perhaps the pirate industry in Somalia should rebrand themselves as the ship tolling industry. “Want to take the shipping short cut to Europe? Just a smallish fee and we’ll let you through.”

(Picture borrowed from “Church of The Flying Spaghetti Monster” blog. Thanks!)