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Bill Radke: You may have already heard about yesterday’s U.S. Navy rescue of a cargo ship captain. Richard Phillips was being held by Somali pirates, three of whom were killed in the rescue. The dramatic violence raises the stakes in the busy Indian Ocean shipping lane, and that means the cost of doing business on the seas is also going up. From London, Stephen Beard has more.
Stephen Beard: A London think-tank estimates that Somali pirates extorted more than $30 million in ransom money last year. The total cost to the shipping industry will be much higher. Insurance premiums have been rising fast.
According to some reports, covering a vessel to sail through the Gulf of Aiden are reported to has gone up 10 times in recent years. Some shipping companies now avoid the gulf and go the long way around the southern tip of Africa.
But that is expensive, says Graeme Gibbon-Brooks, a maritime security analyst:
Graeme Gibbon-Brooks: It takes about 15 days or so, depends on, obviously, how fast the ship is going. But it takes more time, and therefore the goods at the other end are that much more expensive because of the overhead.
It’s that reckoned that sending one oil tanker from Saudi Arabia to the U.S. by that route would add $3.5 million to its annual fuel bill.
In London, this is Stephen Beard for Marketplace.
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