Arrrgh me hearties....

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Piracy has been in the news big time lately however a lot of shippers probably don’t realise it is virtually a daily occurrence somewhere in the world and how it can impact them. It is probably one of the oldest industries there is right behind another industry well known to seamen.

This live and interactive piracy map compiled by the International Chamber of Commerce clearly shows Somalian Pirates have been by far the most active and most daring in recent times. It seems every type of vessel is fair game from cargo ships through to luxury cruise liners. They are going further and further offshore in search of their targets to extract ransom money, pillage cargo and rob and threaten passengers. Governments from around the world have deployed their naval fleets to help defend shipping in this region. Despite this, the reality is that ship owners are virtually forced to have to hand over ransom money in return for the safety of their crew, passengers, cargo and vessels. So the pirates get their payoff ranging and live to do it all again. What is a typical pirates opening ask in ransom for a vessel? US$25 million!!!

Piracy occurs frequently in other parts of the world. The Strait of Malacca between Singapore, Malaysia and Indonesia has been notorious. Up until 2005 it was actually classified as a war zone by Lloyds of London. I have been on many ships where the Masters have told me about the night attacks they have endured in this region and still do. Once again a naval response was required to get on top of the situation.

So what does it mean for you if your cargo is on board a ship that is pirated? Firstly I hope you ALWAYS have marine insurance cover under Marine Institute Cargo Clauses (A) . This is the maximum level of cover available and includes piracy risks; however it only covers risks to your cargo of physical damage, theft or destruction. Ransom monies are precluded and these are normally the concern of the ship owner. If your cargo is delayed but not damaged, then there is no relief from underwriters and there is no claim possible for damages against the ship owner. Maritime law actually defines you - as a shipper with cargo on board - as a joint venturer with the ship owner. So in other words, you share all the risks of the voyage and also delays with them.

Desperate times are leading to increasingly desperate attacks on shipping around the world, so make sure you are insured and perhaps review your policy to ensure that it reflects Cargo Clauses (A). Do it now!

All for now,
Brad Skelton
The Shipping Bloke.