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. Last Updated: 07/27/2016

No Gifts? Blame Somali Pirates

APSanta Clauses signing a code of honor in Berlin last week ensuring quality service. They may face a shortage of gifts, however, from pirate-related delays.
LONDON -- Alarmed at the growing number of attacks off Somalia, international merchant shipping is edging closer to doing the unthinkable in peacetime: bypassing one of world's most vital trade routes.

Somali pirates have been plundering ships off the Horn of Africa for years, but the recent surge in attacks has spilled out into the Gulf of Aden and the Red Sea, threatening access to the Suez Canal.

Now, big firms employed in moving everything from oil, gas and coal to toys are urgently considering whether to travel around South Africa's Cape of Good Hope instead.

"Despite all the publicity over piracy, it will really hit home when consumers in the West find they haven't got their Nintendo gifts this Christmas," said Sam Dawson of the International Transport Workers' Federation.

"If there isn't a letup and active intervention by navies in the region, the impact on trade will come within weeks or months, because we've gone from one attack every couple of weeks to four in a single day," he said.

The Gulf of Aden, where many of the attacks are occurring, connects Europe to the Middle East and Asia via the Suez Canal.

The alternative voyage around the Cape of Good Hope would add upward of three weeks to a typical journey, delaying goods to buyers and increasing transport costs.

Although foreign navies have sent ships to the region and have begun taking tougher action against pirates -- the British navy killed three -- seizures of ships have continued.

Aid shipments to war-battered Somalia itself are among those that have been affected.

Industry players, representing trade across all goods and resources, said the problem is coming to a head.

Giles Noakes, chief maritime security officer at BIMCO, a big industry association, said two operators, a gas carrier and a tug operator Svitzer, a maritime logistics group, were already routing their fleets via the cape.

Noakes said the Liquefied Petroleum Gas carrier made the decision after it had two ships hijacked in the space of a few days.

"LPG is particularly combustible. You fire an RPG-7 into one of those tankers, and it will go bang," he said, referring to the type of anti-tank grenade launcher used by the pirates.

"The next group that I expect to be going round the cape are the big dry bulkers -- carriers of coal, grains and iron ore -- who also cruise at lower speeds," Noakes said.

The world's oil industry also is watching events closely, though no tanker owners have so far publicly declared that they are circumventing Suez.

"Some tanker owners, charterers, are making a decision not to put their tankers in that direction," said Bill Box, a spokesman for oil tanker industry group Intertanko.

He said that rather than ballasting back through, Suez operators, whose ships come free in the Mediterranean, would rather continue trading in the Atlantic basin than return to Asia.

"And they are doing that because they are thinking about the safety of their staff and the risks involved," Box said.

Who Are the Pirates?

How Does It Work?
  • The pirates live on "mother ships," storing arms, fuel and other supplies on board. They catch target vessels using high-speed boats, and heavily armed men board with rope ladders.
  • Intelligence sources say three trawlers in the Gulf of Aden are believed to be pirate "mother ships." The trawlers are believed to be ex-Soviet.
  • Three speedboats may be used in an attack, each carrying six to 10 men armed with AK-47 assault rifles and sometimes rocket-propelled grenades.
Money Earned:
  • Pirates often treat hostages well in the hope of hefty ransoms. Most captured ships have brought ransom payments of more than $10,000 and more recently much more. The larger vessels captured in the busy shipping lanes of the Gulf of Aden fetch on average a ransom of $2 million.
  • The money could be invested in trafficking khat, a mild narcotic leaf that is very popular in the region. Banned in many Western countries, khat is a flowering plant that is native to east Africa and the Arabian Peninsula. Users get a mild, amphetamine-like high.
  • Residents of Garowe and Bosasso, Puntland's other main town, say most of the hijackers are well known as the wealthy pirates have attained near-celebrity status in the area.
  • They have built palatial beach villas and other buildings, cruising around in expensive cars and marrying additional wives.
Who Are the Pirates?
  • Men from the various clans who fought for the Somali warlords supply the guns and military might. Men are also needed to operate technical hardware such as satellite phones and GPS. Fishermen are also useful because they know the sea.
The Consequences:
  • Pirates have driven up insurance costs, forced some ships to go round South Africa instead of through the Suez Canal. They have secured an estimated $18 million to $30 million in ransom by October, according to British think tank Chatham House, for the release of crews and ships.
Origins of Piracy Off Somalia:
  • Somalia has said that piracy is merely a symptom of a wider problem -- illegal fishing and dumping. The collapse of the Somali government in 1991 heralded the opening of fishing floodgates and foreign fishing vessels from all corners of the world, which invaded the area with the sole aim of plundering Somalia's marine resources.
  • Militia started boarding boats on initially justifiable grounds to protect their waters from illegal entry by ships from countries including South Korea, Italy, Spain and Thailand.
  • Hundreds of illegal fishing boats were in Somali waters at any one time and engaged in a $90 million a year business, mainly in tuna, the Kenya-based Seafarers Assistance Program reported in 2006. Toxic and industrial waste was also being dumped there, while there was a roaring trade in illegal charcoal.
  • Andrew Mwangura, then-SAP coordinator, said in 2006 that they operated in two main groups calling themselves the "Somali Coast Guards" and the "National Volunteer Coast guards." But then, they began to demand ransoms to release ships and cargos.
Where Are the Pirates Based?
  • The lawless former fishing outpost of Eyl in the semiautonomous province of Puntland is one of the main bases for the pirates who have been attacking ships in the Gulf of Aden and Indian Ocean.
  • Other groups are based off southern Somalia.
Source: Reuters