The Department of Defense, Coast Guard, Senate and House committees have been meeting with industry leaders to discuss what should be done to protect US shipping interests in the Gulf of Aden. It appears the Coast Guard is just about ready to craft a new security directive for the US Fleet. The Coast Guard wants these practices to become mandatory for ships in dangerous waters.

According to Dana Goward, the Coast Guard’s Anti piracy expert, “nothing is off the table, however there is a general consensus that arming the ship’s crew is not a good idea”. Mr. Goward also stated that the Coast Guard is working through more complex issues involving the International Maritime Organization and the Contact Group on Piracy Off the Coast of Somalia, an international ad hoc group.

These attacks by pirates have been costly for many ocean carriers like Maersk Lines who has seen their insurance premiums increase 25% since the pirates stepped up their attacks. And you can be sure more surcharges are on the way. Spokesmen for the Maritime Administration of the US Department of Transportation recently reported that a surcharge would be imposed to reflect the heightened risk of doing business in dangerous waters.

The current cost of the war risk binder is estimated at $20,000 per shipper voyage compared to only $500 a year ago. The total impact is expected to reach in excess of $400 Million. Guess who gets to pay these premium increases?

Tony Nuzio