[290411.EN.SEA] Somali Pirates Force Boxships To Abandon Cost-cutting Slow Steaming

PIRACY off the Somali coast is mostly a problem for low and slow bulkers and tankers, but now liners are taking note of the mounting costs they impose on the high and fast containership that can leave pirate skiffs wallowing in their wake.

At a time of cost-cutting slow steaming, pirates force containerships into high speeds and higher bunker burn, Maersk Line chief operations officer Morten Englestoft told a high level anti-piracy conference in Dubai this week.

Mr Englestoft pointed to significantly higher fuel costs and emissions as a consequence of the carriers not being able to slow-steam through pirate-invested waters, adding that there were additional insurance and labour costs.

Ron Widdows, president of NOL and chairman of the World Shipping Council, said: "While it is difficult to say exactly what piracy is costing the liner shipping industry, I would guess it is at least US$2-$3 billion annually on the fuel front and as much as $1 billion on insurance."

For all shipping, costs run to $3.5 billion to $8 billion, Mr Widdows told the conference which opened shortly after the International Maritime Bureau said worldwide pirate attacks in the first three months of 2011 reached the highest quarterly number ever at 142, reported London's Containerisation International.

Attending the conference was Somali transitional government foreign minister Mohammed Abdulahi Omar Asharq who said the solution to piracy lies on land, not at sea.

"Consequently the status quo view that manages acts of piracy is no longer a viable strategy. It is equally clear that piracy can only be uprooted on land, where it grows and persists," Mr Asharq said.

Said UAE Foreign Minister bin Zayed Al Nahyan: "We have to unite nationally, regionally and globally to fight piracy. Not only is piracy a threat to maritime services, but it is disruptive to the economic well-being of our country and everyone's livelihood."

DP World took the occasion to announce that it is committing $500,000 towards initiatives aimed at "addressing the root causes of piracy".

Some $400,000 will go towards the Port Community Livelihood and Security Initiative (PCLSI), a DP World-backed project underway in Africa, while $100,000 will go to the UN Trust Fund to Support Initiatives of States Countering Piracy off the Coast of Somalia.

DP World chairman Sultan Ahmed Bin Sulayem said: "This has been a major component of DP World's business development strategy in Africa and elsewhere."

Source : HKSG, 20.04.11.