Tweet
I just read the update from the recently held US Naval War College CIWAG (Center on Irregular Warfare and Armed Groups) Conference, and was struck by some of the feedback that came from shipping industry participants:
This reinforces my personal research that despite the extensive media coverage and the general concern about piracy - the shipping industry overall paid only a minor percentage (approximately $150M in ransoms etc in 2008) of their trillions of dollars gross profit. So it appears that as long as merchant crews are not being put to the death and vessels/cargos are returned, shippers will continue to deal with this as the price of doing business globally. A cold-blooded calculation to be sure.
A panel of businessmen discussed the effects of maritime piracy on the global economic system. Though they agreed that maritime trade is important to the economy, the consensus of the panel was that piracy does not have significant effects on the global economic system.
“Many in my industry are more worried about poor policy than we are about maritime piracy,” said Gordon Van Hook, who works for a maritime supply company.
Rick Calhoun, who works for a shipping company, said piracy can be avoided. Other board members said piracy is concentrated in specific areas. “Vessels can go to different places…the market will figure this out,” Calhoun said, explaining that companies consider piracy in their cost calculations, and factor it as a risk. “The market will, and always has, priced risk.”
“Many in my industry are more worried about poor policy than we are about maritime piracy,” said Gordon Van Hook, who works for a maritime supply company.
Rick Calhoun, who works for a shipping company, said piracy can be avoided. Other board members said piracy is concentrated in specific areas. “Vessels can go to different places…the market will figure this out,” Calhoun said, explaining that companies consider piracy in their cost calculations, and factor it as a risk. “The market will, and always has, priced risk.”
This reinforces my personal research that despite the extensive media coverage and the general concern about piracy - the shipping industry overall paid only a minor percentage (approximately $150M in ransoms etc in 2008) of their trillions of dollars gross profit. So it appears that as long as merchant crews are not being put to the death and vessels/cargos are returned, shippers will continue to deal with this as the price of doing business globally. A cold-blooded calculation to be sure.