The Effect of Maritime Piracy on Greek Shipping

Samiotis George, Psarrou Vasileia, Pazarzis Michael and Tselentis Vasilis Dept. Maritime Studies, University of Piraeus, Piraeus - Greece

Methodology
Questionnaires to Greek maritime companies. Sent 100, received 35 and our research is on going. Personal interviews. Management of pirate incidents, complying with BMP4 and use of armed guards, Humanitarian response.

Our aim
Analyze the phenomenon of piracy and the cost imposed on maritime companies. Social awareness. Compile measures for tackling piracy and evaluate effectiveness.

Managing Countries whose ships were attacked (2012)

80 70 60 50 40 30 20 10 0 Malaysia Hong Kong India Japan Greece Germany Singapore

Maritime Piracy
The most modern and organized form of highly a growing & profitable criminal "business" activity. Pirate attacks occur around the world : Seas surrounding Somalia, Indonesia, the Philippines, the West Coasts of Africa and Southwest America. The Gulf of Guinea accounted for 427 of the 1434 attacks in African waters between 2003 and 2011.

Total attacks worldwide (May 2013)

Somalia
Decline of Somali attacks 2012 2013.

In 2011, pirates earned $146m ($111 in 2010), an average of $4.87m per ship, from ransom paid by shipping firms. However, IMB states that policing 500

and interventions by 400 international navies are 300 deterring pirates, along with 200 ships employing Best Management Practices (IMO), 100 including the use of armed 0 guards and other onboard 2006 security measures.

Global attacks without Somalis Somali attacks

2008 2010 2012

Ransoms paid out to Somali pirates

The effect of maritime piracy on the shipping industry

15%

Yes

No

85%

Ship type as a target for a pirate attacks (2012)

70 60 50 40 30 20 10 0 Bulk Carrier Chemical Container Tanker Tanker Product tanker Tug General Cargo LPG Tanker Offshore Supply Ship

54%

0% 15%

31%
Bulk Carrier Tanker Ship LNG Container Ship Other

Cost burdens Greek companies

Insurance cost Re Routing cost Cost of Deterrent security equipment Wages of security guards The costs incurred by maritime piracy are expected to be high for Greek shipping companies, since they represent 16,3% of world tonnage.
%
20 15 10 5 0 Insurance cost Cost of Re-Routing Cost of Deterrent Security Equipment Other

45 40 35 30 25

Cost burden to Greek companies

Piracy increased running costs, affecting competitiveness by increasing freight rates. Increased insurance premiums covering the welfare of seafarers, cargo and the vessel.

9% 21%

24% 46%

Much

Enough

Little

None

Measures
Use of armed guards. Almost all the maritime companies employ guards. The majority of shipping firms implement Best Management Practices (BMP4). Better management crew training on adopted measures.
25 20 15

10

0 BMP4 Guards Other

6 5 4 3 2 1 0 Deployment of armed guards Enhancement of crew training

Adoption of BMP4 Other

Measures for piracy avoidance

Reasons for Somalia piracy

6 5 4 3 2 1 0 Political instability in Somalia Lack of political will by local political leaders. Reduction of fish stocks National financial and economic situation

Causes

Conclusions
Greek maritime companies: Use of armed guards and simultaneously complying with BMP4. Greater cost for companies: Insurance cost Costs are considerable (46%) and high (9%). 45% answered that costs were little or none. Most firms state that deployment of armed guards and BMP4 implementation, are very effective.

Conclusions contd
85% of all maritime firms state that maritime piracy has a serious effect on the shipping industry Some differentiation is seen in the ship type as a target for a pirate attacks, compared to the world wide picture Maritime firms agree that pirate attacks in Somalia are diminishing, however there are already 100 incidents in 2013 (Somalia 6 (1 hijack) BUT in Nigeria 19 incidents) Pirates collaborators and international interests are restructuring, investing in new technology and will strike again, in other parts of the world, not necessarily only in Somalia.

Thank you for your attention