The Cost of Maritime Piracy

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A study titled “The State of Maritime Piracy 2013” examines the costs incurred as a result of piracy occurring off the coast of Somalia, as well as in the Gulf of Guinea.

The study finds that attacks by Somali pirates are increasingly rare, and that, at between $3 billion to 3.2 billion, the overall economic costs of Somali piracy are down almost 50 percent from 2012. However, at least 50 hostages remain in captivity, held on average for nearly three years under deplorable conditions.

Regarding Africa’s West Coast, this report is the first comprehensive attempt by any organization to quantify the total economic cost of maritime piracy in that region.

According to Safety4 Sea piracy in the Gulf of Guinea remained a significant danger in 2013, says the report, with levels perpetuated by a lack of open reporting and a lack of coordinated effort among stakeholders.

iHLS – Israel Homeland Security

“The efforts of the international community and the shipping industry have considerably reduced the threat of Somali piracy,” says Jens Madsen, one of the report’s authors. “But we have yet to achieve the goal of ‘Zero/Zero’ – zero vessels captured and zero hostages held,” he adds.

The study finds that while the combined economic costs of suppressing Somali piracy are markedly down, there has only been a slight increase in the investment in long-term solutions ashore.

Research also shows that the shipping industry increasingly relies on individualized risk mitigation, observed in the decreased use of some of the more expensive anti-piracy measures such as increased speed and re-routing. Shippers are also turning to smaller and less expensive teams of armed guards as the perceived risk of piracy is declining.