Return of piracy on Somalia waters to push up costs
The International Chamber of Commerce’s International Maritime Bureau (IMB is advising shippers to remain vigilant as they transit waters off Somalia and the Gulf of Aden, as piracy remains a threat.
With at least four vessels reported to have been hijacked since November off the Somalia coast, two of which are still being held ransom by pirates, uncertainty has gripped operators of cruises ship, cargo vessels and oil tankers, with fears of cargo delays and a resultant increase of prices in the coming days.
The four vessels reportedly attacked off the Somalia coast are FV Almeraj 1, MV Central Parker, a Liberian flagged ship, Lila Norfolk and Maltese flagged bulk carrier, Ruen.
IMB director Michael Howlett said the latest incident demonstrated the continued capabilities of Somali pirates.
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“This is a cause for concern and the IMB is once again calling for all masters and vessel owners to continue following the recommendations and reporting procedures as per the latest version of the Best Management Practices,” Mr Howlett said.
The IMB urged vessels to continue implementing the industry’s best management practices and encouraged the continued stabilising presence of navies in the region.
According to the IMB, Somali pirates are well armed with automatic weapons and rocket-propelled grenades, and sometimes use skiffs launched from mother vessels, which may be hijacked fishing vessels or dhows.
The return of piracy cases off the coast of Somalia and the Gulf of Guinea in the past few weeks continue to be a serious threat to international maritime safety, in particular to seafarers and international trade as well as to the security and prosperity of the regional countries.
Shippers Council of Eastern Africa (SCEA head of policy and advocacy Agayo Ogambi said the attacks would disrupt supply chain as it will take longer to deliver the cargo.
“Kenyan exports such as tea will take longer to deliver, considering the routes are no longer safe. The vessels have to take longer routes or hire security for safe passage, which will delay supplies at an extra cost,” Mr Ogambi said.
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He added, “We are in a difficult situation and this will need both political and military interventions to resolve the crisis but, at the moment, clients should plan accordingly to ensure they do not run out of stock.”
Recent sporadic attacks on vessels off Somalia’s coast have triggered concerns that piracy is making a resurgence in the region, which might lead to increase of ship insurance premiums at expense of traders. In 2022, the Kenya maritime waters were re-designated from being a high-risk area by the global shipping industry, which lowered insurance premiums significantly and attracted more ships.
The East African and Horn of Africa maritime waters had been designated high-risk in 2009 by the Best Management Practices to Deter Piracy and Enhance Maritime Security (BMP-5.
As a result, shipment insurance premiums went up and five of the largest global shipping industry associations, the International Association of Dry Cargo Ship Owners, International Association of Independent Tank Owners, International Chamber of Shipping, Oil Companies International Marine Forum and Baltic and International Maritime Council, withdrew from the region.
Andrew Mwangura, a maritime expert said that the Somali pirates are still demanding $400,000 to release Iranian fishing vessel FV Almeraj 1 or else they turn it into “a mother ship for piracy operations”.
Mr Mwangura said two days after FV Almeria I attack, the gunmen in two skiffs attacked MV Central Parker off Yemen, but the US naval ship managed to outgun them and rescued the merchant ship.
According to online marine tracking website Marine Traffic, on December 14, 2023, a Maltese merchant bulk carrier was seized by pirates, approximately 680 nautical miles off Bossaso while headed for Turkey from South Korea, laden with metals. One of the 18 multinational crew was evacuated for medical care ashore.
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On January 4, 2024 Lila Norfolk was hijacked 460 nautical miles off Eyl, while en route to Khalfa bin Salman port, Bahrain. The Liberian flagged vessel was rescued by Indian Navy just an hour after the attack and all 21 crew safely evacuated.
$1 trillion worth of goods – about 12 percent of global trade – are passed through the Red Sea, and the continued re-routing of merchant ships around the southern tip of Africa is expected to cost more of up to $1 million in extra of fuel for every round trip between Asia, East Africa and northern Europe.
“Shipping reports indicate that the disruption to Middle Eastern supply after the recent Red Sea attacks to merchant ships drove oil prices higher in the first trading session of this year. Already, over 100 merchant ships have been redirected to avoid violence in the Red Sea,” Mr Mwangura told The EastAfrican.
The Red Sea is one of the important routes for oil and gas shipments as well as for commercial goods, which means higher prices for countries reliant on maritime transport through the Suez Canal.
Disruption in the Red Sea and the recent piracy attacks in the Gulf of Aden could trigger global inflation and affect tourism in the western Indian Ocean region, comprising Comoros, Kenya, Tanzania, Somalia, Seychelles, Mauritius, Mozambique, South Africa, Madagascar and Reunion Islands.
The disruption to Middle Eastern supply after the recent Red Sea attacks to merchant ships drove oil prices higher in the first trading session of this year. Already, over 100 merchant ships have been redirected to avoid violence in the Red Sea.