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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