21ST CENTURY COMMERCE: Pirates Wait For Cost Cutting To Start.

Right now the pirates are stymied by an energetic international effort to make it very difficult for pirates to succeed. There is an international anti-piracy patrol off Somalia, which has over two dozen warships and more than a dozen maritime patrol aircraft monitoring the vast sea areas the pirates were once able to “disappear” into. No more. The large (well insured) commercial ships that the pirates long feasted off are now well prepared to detect, evade or defend themselves from a pirate boarding attempt. Many of the more valuable ships now carry a half dozen or so armed security personnel, most of them former military and ready and able to shoot to kill.

The insurance companies point out that until the rule of law returns to all of Somalia (and pirate-friendly ports and anchorages disappear) the pirates will still be a threat. It’s costing seafaring nations, who supply the ships and aircraft for the anti-piracy patrol, over $7 billion a year to maintain these defenses. A lot of that cost is borne by the shipping companies in the form of additional security expenses for their ships and ultimately by shippers in the form of higher transportation feed. As more time passes with no pirate successes there will be a temptation to cut back on the security efforts. That’s what the pirates are waiting for and the insurance companies know from experience that this is how the world works.

The old-time solution, usually described as “burning out a nest of pirates,” was less defensively oriented, and somewhat longer-lasting.