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)

0

10

20

30

40

50

60

70

80

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)

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

0100200300400500

2006 2008 2010 2012

Global attackswithoutSomalisSomali attacks

Ransoms paid out to Somali pirates

The effect of maritime piracy on the shipping industry

85%

15%

Yes No

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

0%54%

31%

15%

Bulk Carrier Tanker Ship LNG Container Ship Other

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20

30

40

50

60

70

BulkCarrier

ChemicalTanker

Container Tanker Producttanker

Tug GeneralCargo

LPGTanker

OffshoreSupplyShip

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.

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5

10

15

20

25

30

35

40

45

Insurance cost Cost of Re-Routing Cost of DeterrentSecurity Equipment

Other

%

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. 46%

9%

21%

24%

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.

Deployment ofarmed guards Enhancement of

crew training Adoption of BMP4Other

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1

2

3

4

5

6

Measures for piracy avoidance

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5

10

15

20

25

BMP4 Guards Other

Reasons for Somalia piracy

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1

2

3

4

5

6

Political instability in Somalia Lack of political will by localpolitical leaders.

Reduction of fish stocks National financial andeconomic situation

Causes

ConclusionsGreek 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 cont’d

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