Costs of protection against piracy rise

Christopher Werth Jan 19, 2012

Adriene Hill: And now on to another industry with a high-tech and low-tech side: piracy. The fight is on here in the U.S. over online piracy. But there’s another pirate battle raging against more old-fashioned — sea-based — pirates. A study out today shows piracy off the coast of Somalia dropped last year.

Christopher Werth has more from London.

Christopher Werth: The International Maritime Bureau in London says Somali pirates seized 80 percent fewer ships in the final three months of 2011. Globally, the number of pirate attacks dropped slightly. But pirate groups are also having a tougher time actually boarding the ships they go after. That’s because naval patrols have stepped up patrols, and because many ships are now sailing with armed security guards on board.

Rory Dowds, of the maritime security firm MUSC, says the economic costs of piracy still remain incredibly high.

Rory Dowds: There’s been estimates you know that it could be over $10 billion dollars a year. So it could take awhile before the costs of piracy come down.

Dowds says it’s a trade off. Although ship owners may eventually pay fewer ransoms, the cost for security — and higher insurance premiums as a result of the risk from piracy — will continue to mount.

In London, I’m Christopher Werth for Marketplace.

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