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The main concern of this blog is to serve as an eye of the public to the Maritime World. People who make their living at sea can rely in this blog to acquire information regarding maritime industry. News and opinions related to sea-piracy can be read in this domain. Articles written on this site are done by the writers of The Piracy Watch. Opinions, comments and suggestions are very much welcome in here but with the discretion of The Piracy Watch, this is to avoid publication of foul and unnecessary words. Essential information about piracy which can be serve as a vital source in knowing things about maritime world are also welcome in this blog.

Tuesday, September 27, 2011

Piracy, The Worst Dilemma of Maritime Industry

A great deal of misery clouds the very foundation of a captive seaman who embarks in an uncertain course, hoping for a better life. On the other hand, shipping companies deal with the ongoing struggles, hardships and the presence of inevitable anguish towards sea piracy. It cost them dedicated comrades, sheer talent and a substantial amount of investment. In a world wherein recession and bankruptcy lingers in every facet of a company's existence, piracy has no essential role in turning this dreaded situation around.

Pirate’s infestation is localized in a certain domain, but its effect has taken its toil to the international community: the market that caters and dictates the world’s financial climate. The past, piracy exists for the sole purpose of looting, at present, it is now killing innocent lives to obtain money and wealth. While the future, needs a considerable amount of dedication and effective policy-making on behalf of law enforcement agencies to eradicate the business of piracy.

The Suez Canal, an artificial sea waterway in Egypt considered to be a vital economic route, has experienced a 20% decline in revenue for the past years. Ten percent of this is attributed to the economic downturn while the other 10% is related to the avoidance of vessels to cross the region due to piracy. As evident in the year 2010, wherein 1.78% of ships and yachts en route to Suez Canal have been attacked, pursued or captured by pirates. In a global standpoint, piracy has cost the world $12 billion dollars each year. According to the International Maritime Bureau’s Piracy Reporting Centre, 445 pirate-related scenarios and 49 vessels hijacked off Somalia were reported. In 2011, there were 173 attacks and 23 hijackings reported, gaining predictions that it will surpass last year’s statistics.

If shipping vessels will resort to re-routing, the result is longer voyage and additional costs. 2700 miles will be added to the expedition if a Saudi Arabian tanker set sail for United States via the Cape of Good Hope while a re-routing from Europe to the Far East will add six days to a journey for a liner and up to 15 to 20 days for a cargo ship. This excess duration of travel time reduces a vessel’s annual voyages from six to five, yielding a 17% reduction in its yearly delivery capability. However, a dilemma exist whether it would be economical for shipping vessels to sail the Cape of Good Hope to avoid a potential pirate attack or to take a risk and proceed directly to the pirate-laden Suez Canal. If vessels opted for the former, high cost will be added. An owner of Post-Panamax container ship will increase its cost by $11.2 million while an owner of a Very large Crude Carrier (VLCC) will have an increase in cost by as much as $9.6 million. Moreover, bunker prices significantly increased up to $640 per tones from $482 per tones, yielding a 33% inflation for both container and tanker calculations. On the non-economic stance, pirates widen their territorial occupation that includes major parts of the northern Indian Ocean. This issue makes it practically impossible for oil tankers to avoid pirate-infested area when sailing into the Arabian Gulf to receive cargo from the Middle East crude oil. In contrast, if shipping vessels opted for the latter, they will not incur additional transit cost due to the direct route, but if they were attacked and eventually hijacked en route to the Suez Canal by pirates, likewise, further costs and liabilities will be added.

Piracy clearly affects the international maritime industry to the point that it capitulate deterioration of investments and logistics. The economic cost has been affected by numerous factors: cost of ransom, insurance, re-routing, security equipment, naval forces, prosecutions, and piracy-deterrence organizations. With multitude and diverse factors affecting the industry, it certainly needs the same amount of solutions and elucidation. The answers may result to untoward retribution, resistance and conflict, but it should be done. Ignorance and inhibition yields nothing and benefits no one. The reality today calls for greater decisions, as pirates became wealthier in every charted sea, humanity scramble for justice in every uncharted vision.

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