Friday, June 01, 2012
There is money to be made on the high seas, lots of it. With the rise of piracy off the eastern coast of Africa, private security companies (PSCs) have found no shortage of commercial and private ship owners willing to pay top dollar for protection.
Business is so good these days that many new PSCs have come into existence just to thwart pirates from Somalia, according to the news website Somalia Report.
And why wouldn’t those with experience guarding ships not feel the entrepreneurial itch? Not when protecting a single ship through the Gulf of Aden can fetch a company $60,000.
On average, maritime PSCs collectively earn $52.2 million a month from an estimated 1,500 escorts.
Hiring a team of only four armed men can cost a ship owner $5,000 a day. But compared to the alternatives, this amount can seem quite reasonable.
The other choices are to voyage through dangerous waters without protection and run the risk of being captured and held for ransom. Or a ship’s captain can steer clear of Africa’s east coast, but that means adding thousands of miles to a voyage and incurring additional fuel expenses.
According to Somalia Report, “To date, no ship with armed security has been successfully hijacked,” and some insurance underwriters give discounts to ships with armed guards.
-Noel Brinkerhoff
To Learn More:
The Rise of Private Maritime Security Companies (by David Isenberg, Somalia Report)
USG Goes Public with Support for Hired Guns (by Robert Young Pelton, Somalia Report)
Pirates Offer Hostages at Discount Prices (by Noel Brinkerhoff, AllGov)
Is U.S. Preparing for a New War…against Pirates? (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Comments