Onboard security did not stop this piracy

SOMALI pirates have hijacked the chemical tanker Biscaglia, despite the presence of three British guards onboard.

The guards were unarmed. Personally, I don't know what good it does to hire guards, but then not have them armed. I realize British cops don't carry guns, but it's not like these guys are walking a beat in London.

With all the piracy, the insurance rates have gone up dramatically for the ship owners. The international shipping industry will be greatly impacted by this, especially in today's market of falling charter rates.
More carriers are deciding to route their ships around the Capes, to avoid the Gulf of Aden, and the Somalian pirates.

"Knock-for-knock" is not a joke

Ocean Heavylift has vessel seized.

When I first read this headline, I assumed it was for unpaid debts.

Well, it is in a way. But not so much unpaid, as a legal dispute.

The short version is, the ship lost cargo overboard. A liftboat. The owners of the liftboat believe the ship is responsible for their loss. The owners of the ship say no, because they have a "knock-for-knock" provision in the contract.

I had never heard of knock-for-knock provision before. Basically it says each party insures their goods, and does not claim against the other, even if the other is at fault.


Here is a proper definition of Knock-for-knock

But, back to the ship being arrested. With all the financial turmoil, it is possible that ships will start being arrested for unpaid debts. This is something to always consider when doing business with a carrier. Nothing worse than having your goods on a ship which gets arrested.

Pirates! No Kidding!

The swords have been replaced by automatic weapons and rocket-propelled grenades.

From an article in The American Shipper (click here for complete article)

"While the word "pirate" may still conjure up romantic images among the general public, he said Somali pirates plying the Gulf of Aden are dangerous criminals who are heavily armed with everything from automatic weapons to rocket-propelled grenades.
The International Maritime Bureau, the lead recording body for piracy, estimates that more than 1,200 Somalis and at least six major groups are involved.
Ten ships are currently being held and the industry fears for the seafarers on board. Hinchliffe said that as pirates have apparently met success in extorting ransom for vessels and seafarers, their numbers seem to be growing and they are investing in better weapons."

Apparently the Danes sent in a warship which captured some of the pirates. Of course, there is a pretty big Danish Shipping Company, Maersk Sea-Land (although I suspect they will be dropping the Sea-Land part very soon). Oopppss...my bad.
They already changed their name back to just Maersk.

I just hope no one expects the Americans to try and retake ships from pirates.
We tried that in 1975 just at the end of the Vietnam war. The Mayaguez incident. We didn't do a very good job, and lots of people were killed and injured. By the way, the Mayaguez was a Sea-Land vessel.


Shipping companies have a couple of options if their ships normally go through the Gulf of Aden.

1) They can go another route, which will add to the voyage time.

2) They can buy additional insurance coverage.


Either one will cost the carriers more money. If you ship to or from this part of the world, expect a new "pirate avoidance" surcharge. I suspect the official name will be security surcharge.

Update, Tuesday, 9/23

Todays Journal of Commerce reports the U.S. Navy confirms they cannot fight this piracy.