At the end of 2010, around 500 seafarers from more than eighteen countries were being held hostage by pirates.
During the same year, around $238 million was paid in ransoms to Somali pirates. Piracy doesn't only affect the world's largest trade transport industry; it actually costs the global community a lot more than just ransoms and stolen cargo.
Despite piracy on the high seas being one of the world's oldest crimes, the maritime industry has failed to figure out a way to deal with it.
According to the Oceans Beyond Piracy (OBP) project, contemporary international reactions to piracy follow similar lines to early international law, which declared it the duty of states and their navies to deal with pirates.
But, despite more than thirty countries (including the US) contributing to the navies patrolling the trade lanes around the Horn of Africa, pirates operating in the waters off the coast of Somalia are still doing a roaring trade.
Although the navies' presencemanaged to reduce the rate of successful hijackings, the pirates doubled the number of attacks and expanded their playground, so the actual number of successful hijackings increased.
Furthermore, hijacked vessels are reportedly being used as "mother ships". This not only enables the pirates to expand their operating area, but also gives them some degree of protection since a naval vessel would hesitate to fire on pirates aboard a ship full of crude oil.
OBP says that, between 2004-2009, only 15% of global piracy attacks occurred off the coast of Somalia But in 2009, Somali pirates were responsible for 53% of reported attacks around the world, including 47 hijacked vessels and 867 seafarers held hostage.
Total direct costs of piracy in 2010 is thus estimated to be between $7 billion and $12 billion.
But there are secondary costs as well:
Total secondary costs to regional economies: $125 billion a year
And we haven't even started trying to quantify "loss of use" and "loss of man-hours" while ships and their crew are held hostage, often for a few months, while shipowners and pirates negotiate a price for their release..
The One Earth Future Foundation says that the scourge of piracy will continue to increase because there is no effective international system to deal with the problem.
Which is why the Foundation established the Oceans Beyond Piracy project, which is attempting to develop a robust and global system to manage piracy through collaboration with stakeholders from industry and governments.
[Sources: One Earth Future Foundation, Oceans Beyond Piracy]
DHL in the USA; A mature planning organization; John Wagner blog; Next week's 3PL Summit, CSCO Forum and Big Data Supply Chain Conference
Frank Appel, the CEO of Deutsche Post DHL, was presented last night with this year’s John McCloy Award by the American Council of Germany in recognition of his work on behalf of transatlantic business relations
Article by John Wagner Jr from Wagner Logistics published on June 6th