Somali Piracy Costs Governments, Shipping Industry $7 Billion In 2011

Though many think of Johnny Depp when pirating comes up, avoiding the real-life bandits of the seas is a multi-billion dollar problem for the shipping industry.

Somali pirates cost various governments and the shipping industry up to $6.9 billion last year, according to the One Earth Future Foundation, a non-profit advocacy group. Piracy off the coast of Somalia is both lucrative and common due to its location near the Gulf of Aden, an oil shipping lane that sees about 20 percent of global trade, according to Bloomberg. As a result, the cost to the shipping industry of Somali piracy alone accounts for over half of the total $9 billion in extra costs each year, according to recent figures from the Indian National Shipowners Organization.

In 2011, Somali hijackings actually fell 36 percent from the year before, the Financial Times reports. Still, Somali pirates cost the shipping industry billions. Shipping companies pay about $2.7 billion in additional fuel costs to speed up ships in particularly high-danger areas. One Earth Future Foundation reports that no vessel has been hijacked when travelling 18 knots -- or about 20 miles per hour -- or faster.

There may be have been fewer hijackings last year, but piracy in the poverty-stricken west-African nation are still making headlines. Somali pirates have recently shifted tactics to kidnapping people on land, such as travel and surfing journalist Michael Scott Moore, who was kidnapped in northern Somalia last month.

However, the tactic may be ill-advised. At about the same time as Moore's capture, Navy SEAL Team 6, the same squad responsible for Osama bin Laden's death, rescued an American woman and Dutch man during a raid that resulted in deaths of eight of their captors.

Still, employees working on oil tankers and cargo ships remain at substantial risk, so much so that employers pay an additoinal $195 million each year to compensate them for taking on the danger.

Shipping industry workers also endure a variety of other dangers on the job. In addition to the risk of running aground -- a danger that the workers on the New Zealand cargo ship Rena know all too well -- workers also face the possibility of exploding shipping containers.

Also on HuffPost:

Comments

[BrokenCrown]

01:52 AM on 02/11/2012

This is a great example of the way media manipulates minds. Little do you know, Somalians have been robbed and pirating is their only way to be heard. Im not saying that I agree with their actions, Im just saying that there are 2 sides to this story and these people are victims as well. Illegal fishing and toxic waste dumping has caused over 300 million dollars worth of damage. When a group of people are criminalized in an article, do research. The media has done a great job in hiding valuable facts to make a specific group of people look bad all over the world. This is how fear is created and a generation of people are manipulated!

[Disketta]

10:01 AM on 02/09/2012

What should be pointed out here is that Somalia was itself the victim of its own upper class. They are poorer than ever because of corruption and greed. The collapse of their military has meant that their own fishermen cannot catch fish because big ships engaged in illegal trawling have destroyed the seafloor and the fish aren't there any more. Another way to impoverish a poor nation. But there is nobody there to police them and people are raiding Somalia, so Somalis are responding in kind. There's always more to the story.

[Reggie Anderson]

11:28 AM on 02/09/2012

There is nothing that you can say that will justify their Piracy and murder; the pirates kill and ransom innocents.

[Disketta]

01:03 PM on 02/09/2012

I'm not talking about justification. I'm talking about cause and effect. When everything is taken away, people are driven to desperation. These pirates are fisherman who can't catch fish any more. Piracy is better to them than staying home and starving. It's not justified, no, but it's predictable, and it's not going to go away until order is restored to that country.

[bounceyal]

08:34 AM on 02/09/2012

"but piracy in the poverty-stricken west-African nation are still making headlines. Somali pirates..."
Proof read your writing. Somalia is no where near WEST AFRICA, at least according to the maps that I have studied. Somalia is in EAST AFRICA.

[Budd LaFever]

06:52 AM on 02/09/2012

Simple solution. I've said it before, and I'll say it again. Take a lesson from WWII German raiders. Outfit cargo ships with hidden guns and troll the coast. Don't capture. Sink them and leave them for the sharks. Activate a fleet of smaller faster submarines to trail legitimate shipping in distant waters. When a ship gets attacked, trail the smaller attack boats back to their mother ship and sink it. Don't rescue, leave them to have a nice healthy 800 or so mile swim back home.

When the pirates go out and don't return, those that want to do this kind of business will not be so quick to enlist.

[Reggie Anderson]

11:30 AM on 02/09/2012

Unfortunately arming commercial vessels violates international law.

[escholar]

06:15 AM on 02/09/2012

Cost To Somalia -
First Correction: Somalia is not a West African nation, as the article states, it is an East African nation.
The preceding article, details the high cost to the shipping industry, that Somali piracy causes, but completely ignores the much higher and long lasting cost to Somalia, of dumping toxic waste, including nuclear and illegal fishing, in Somali waters, by the very same shipping industry.
The article estimates, that Somali piracy costs the shipping industry about $7 billion a year. But how much is the dumping of toxic waste, including nuclear and illegal fishing, in Somali waters, costing Somalia, now and in the future? Who is paying a higher price, the shipping industry or the Somalis?
How would we or any nation react, if foreign ships were dumping deadly toxic waste, some of it nuclear and were also illegally fishing in our territorial waters? Who is committing a bigger crime against whom?
Sea Piracy is wrong and illegal by any standards, but so is dumping deadly toxic waste and illegal fishing, in anyone's waters. Two wrongs don't make a right. Both sides must be condemned and held accountable.

- http://www.informationclearinghouse.info/article22428.htm

- http://www.infowars.com/you-are-being-lied-to-about-pirates/

[rgilley]

06:00 AM on 02/09/2012

The United Syayes it appears has solved the Somali problem....We are just letting them immigrate to this country. Of course sooner or later one of these immigrants is going to bring a dirty bomb with them....but it Will cure the piracy problem.

[zenju2]

05:49 AM on 02/09/2012

"Nation-states"...many with borders as the sad legacy of colonialism, failing to reflect the realities of language, ethnicity, religion, distribution of resources. Somalia is an utter failure.
Here's a start. International flotilla: Take the pirates OUT. Capture and/or destroy their boats. Take their ports. Execute the pirates...or imprison them and educate them and teach them useful trades and skills. Either way, DO something. And perhaps create a confederation of Somali city-states that can cooperate for the common good to whatever extent possible.

[krojr3]

05:35 AM on 02/09/2012

easy fix. arm the ships. pirates approach. blow them out of the water. no trial needed.

[First Blast]

04:40 AM on 02/09/2012

Why should Somalia even be a country? They do nothing, are nothing, and will be nothing. A complete basket case.

[wcb59]

06:13 AM on 02/09/2012

It's a libertarian paradise.

[Reggie Anderson]

11:31 AM on 02/09/2012

Everyone in the country arent party to piracy, there are victims in Somalia of the piracy

[WhatDaBleep]

04:05 AM on 02/09/2012

This piracy would probably never of happened if countries with nuclear power in Europe did dump their toxic wastes off the coast of Somalia. After all, that one of the main reasons they are attacking the ships!

[First Blast]

04:41 AM on 02/09/2012

Yeah sure

[jroman62]

04:42 AM on 02/09/2012

What? One of the dumbest things I've read. You sure do lack perspective on this issue. LOL, the pirates are protesting. It's the money fool.

[the grange gorman]

06:12 AM on 02/09/2012

It is actually true that various countries and Italian crime groups dumped pollutants in Somalian waters and destroyed the fishing industry which was the main employer , not saying this is the only problem or that we shouldnt shoot the pirates but what BLEEP says has some truth.

[WhatDaBleep]

09:30 AM on 02/09/2012

I see just how uneducated you are!

[First Blast]

04:05 AM on 02/09/2012

What would we have ever done without Somalia's great contributions to world civilization?

[landskroon]

03:45 AM on 02/09/2012

What would happen if this money was invested in this war torn nation? Lets say a contingent of Scandinavian and Swiss aidworkers helping the nation to develope ? Start in a small town at the coast and make it grow by showing results. No Americans ,Brits or French.

[1differentdrummer]

05:32 AM on 02/09/2012

Great idea. Meantime, arm those ships. Faved.

[the grange gorman]

06:14 AM on 02/09/2012

These people are so desperate they might kidnap the aid workers .

[Reggie Anderson]

11:36 AM on 02/09/2012

They already have

[CANTHATBE]

03:39 AM on 02/09/2012

World you have to step up. You said nothing when nations where over fishing the Somali coast and you are saying nothing now about Sierra Leone being over fished now. What do you expect countries to do when you deplete them of their food sources.

[jroman62]

04:43 AM on 02/09/2012

It's not about food, it's about money.

[oh right]

09:49 AM on 02/09/2012

Sorry, but I think that is one in the same.

[Michael Niemeyer]

03:13 AM on 02/09/2012

A short note on Somali piracy. 15 years ago this wasn't a question, and it wasn't a question because the people who are now pirates were then fishermen. What happened? Oh, people dumped boatload after boatload of toxic crap off the coast of Somalia. It was always more profitable (albeit more dangerous) to be a pirate but they didn't do it because they could make a good, honest living. Then the fish died.

We're not the ones doing it, but we're why it started. Treat others the way you wish to be treated? If that's the case, this is fair turnabout and it sucks.

[jroman62]

04:44 AM on 02/09/2012

LOL, Thanks for the laugh.

[Y3rMawm]

03:10 AM on 02/09/2012

Aargh!

[Terri Skau]

11:55 AM on 02/09/2012

LOL....Need more Navy seal 6 handling business.

[Y3rMawm]

12:49 AM on 02/10/2012

Disney is going to have to change the names of some rides.