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Piracy Affects South African Shipping Insurance Costs


November 21 - Shipping companies operating in South Africa have been dealt another blow with insurance companies increasing their costs, adding more financial burden to these firms.

The reason for the rise in premiums is due to the increased incidents of piracy that are taking place along the coast of Africa, as well as other regions around the world.

Companies have now been saddled with rising shipping insurance and transport costs, with some saying that any further increases will simply cripple them.

"Extra insurance costs", according to the Managing Director of Southern Chartering shipping company, Neil Lepine-Williams, were being added to transports entering Somalian waters because of an unusually high number of piracy reports in the past few months.

The situation has become so bad, that some shipping company heads are simply refusing to sail around the Horn of Africa to avoid paying such high shipping insurance costs. This region has one of the most notorious reputations for pirate attacks in the world.

However, this is not the only region being targeted by pirates, and companies point to the Far East such as Singapore and Indonesia, as well as Brazil and Tanzania.

One of the most disturbing outcomes of this rise in piracy is that global insurance companies are buckling to the pressure and paying out ransoms valued at millions of dollars, if only to recover the products and, in some cases, the crew. These companies realize that if they don't bow to the pirates' demands, they will lose out a lot more.



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3/14/2010 7:05:20 AM
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Sunday, March 14, 2010

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