The Pirates of Somalia_ Inside Their Hidden World - Jay Bahadur [69]
More basic, however, is the fact that maritime shipping is an extraordinarily competitive global business, and hiring private security is simply not in the average shipowner’s budget. Engaging a team of armed guards costs in the range of $10,000 per day ($30,000–$60,000 for an escort vessel), and given that it takes three to five days to pass through “pirate waters,” the added security bill would destroy the profit margins of all but the most lucrative consignments.
Similar reasoning explains why shipping companies do not simply arm their own employees. Neither shipowners nor their insurers wish to risk escalating a piracy incident, especially as a result of inexperienced sailors-cum-mercenaries, fresh out of a crash course in marine combat. Second, shippers already grant hazard pay ranging from 25 per cent to 100 per cent for crew members serving in high-risk piracy areas, and would likely have to offer an even greater pay hike in order to convince their employees to double as armed guards. More significantly, shipowners mutually insure one another for liabilities not covered under standard marine insurance, such as loss of life and injury to crew members, through associations known as protection and indemnity clubs. In the event of a pirate encounter, the shipping industry itself would be responsible for paying compensation for any crew members injured or killed—a far more likely occurrence if they are engaged in combat.
Rerouting their vessels around the Cape of Good Hope, the southern tip of Africa—thereby bypassing the Suez Canal as well as the Somali pirates—is another alternative open to shipowners. Few, however, have exercised this option; as well as additional crewing and fuel costs, the delays inherent in the detour may result in ships arriving late to port—extremely problematic in the case of time-sensitive cargos, such as high-value consumer goods (for example, the latest car models) or just-in-time manufacturing inputs. According to a report by the US Department of Transportation, routing an oil tanker from Saudi Arabia to the United States around the Cape of Good Hope adds 4,300 kilometres to the trip, and reduces the tanker’s round-trip annual voyages from six to five, at an additional yearly fuel cost of $3.5 million.7
And while sailing via the Cape of Good Hope virtually eliminates the chance of running into pirates, the marine navigation hazards are amplified. “If you go around South Africa, you’re facing a much more exposed sea route,” explained Smith. Thus, while shippers could save money on war risk insurance—which often subsumes acts of piracy—they would face increased premiums on hull insurance, which covers loss due to marine perils, such as running aground and hazardous weather.
The fact is, piracy just is not enough of a bother to cause most shipowners to change their plans. As we saw in Chapter 3, in 2008 the average vessel passing through the Gulf of Aden faced only a 0.17 per cent, or 1 in 550, chance of being hijacked. In the unlikely event that a ship is captured, the owner (or, as is more likely, the owner’s insurance provider) is forced to pay a ransom generally not exceeding 2–5 per cent of the worth of the vessel and her cargo—an annoyance, to be sure, but not a particularly uneconomical one. Most owners, in the end, are content to string up some barbed wire, buy an insurance policy, and pray.
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One defensive option that was considered in the early days of Somali piracy was the long-range acoustic device, or LRAD, a non-lethal sonic weapon described as a “bullhorn on steroids” that is capable of inflicting excruciating pain on its targets. Alas, the arguments for the LRAD turned out to be nothing more than a lot of noise. On November 28, 2008, the chemical tanker Biscaglia—equipped with an LRAD operated by three unarmed guards provided by the British private security firm Anti-Piracy Maritime Security