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Scott Jagow: The shots at the economy are coming from far and wide. Today, the Indian navy sank a suspected pirate ship in the Gulf of Aden. It’s the stretch of water between Yemen and Somalia, and it’s gotten very dangerous lately. Over the weekend, a Saudi oil tanker was hijacked there. The shipping industry is taking a big hit from these battles with pirates. Marketplace’s Stephen Beard has more.
Stephen Beard: Twenty-six ships have been seized in the region this summer alone. Their owners have reportedly coughed up more than $30 million in ransom. Insurance premiums have shot up. The cost of covering the passage through the pirate-infested waters of the Gulf of Aden is up ten-fold this year.
Roger Middleton is an expert on maritime security. He says the shipping companies may now have to hire bigger crews to ward off the pirates and spend more money on fuel.
Roger Middleton: One of the other things that ships do to avoid being captured is to steam much faster through the Gulf of Aden than they would normally. That obviously burns more fuel, and again adds to the costs of a journey.
He says the ultimate evasive action is to avoid the Suez Canal and the Gulf of Aden altogether and travel around the Cape, but that can add a couple of weeks to the journey — at $30,000 a day.
In London, this is Stephen Beard for Marketplace.