Last Updated: Tue Nov 02, 2010 17:52 pm (KSA) 14:52 pm (GMT)

Piracy hits Red Sea countries as ships reroute

A China Shipping Line cargo ship transits the Suez Canal at the port city of Ismailia
A China Shipping Line cargo ship transits the Suez Canal at the port city of Ismailia

Surging piracy attacks this year in the busy Gulf of Aden have driven China to send its navy to the waters off Somalia this week to protect Chinese vessels from pirate attacks. While prompting foreign war ships to the area, piracy is changing maritime operations of nautical corporations the world over, especially those relying on the Gulf of Aden and the Arabian Sea, one of the world’s busiest sea lanes.

Two Chinese destroyers and a supply ship will leave the island province of Hainan in southern China on Dec. 26 to patrol the Gulf of Aden and areas off the Somali coast, Foreign Ministry spokesman, Liu Jianchao, said in a statement issued late Saturday.

 Their major task is to protect the safety of Chinese ships and crew on board as well as ships carrying humanitarian relief material for international organizations 
Chinese Foreign Ministry spokesman

“Their major task is to protect the safety of Chinese ships and crew on board as well as ships carrying humanitarian relief material for international organizations,” Liu said.

Earlier this week, Liu said about 20 percent of the 1,265 Chinese ships passing through the area have come under attack so far this year. Seven hijackings have involved Chinese ships or crews.

Experts say most of the commercial ships are not armed, meaning crews have few options when attacked. A Chinese cargo ship’s crew, aided by the international anti-piracy force, fought off an attempted hijacking this week using Molotov cocktails and water hoses.

The Chinese fleet would join ships from the U.S., Denmark, Italy, Russia and other countries in patrolling the Gulf of Aden, which leads to the Suez Canal and is the quickest route from Asia to Europe and the Americas.

Piracy and financial risk

 In the end, any final analysis you’ll get puts this crime or phenomenon in the category of terrorist attacks on the civilized world 
Economic and political analyst

Although piracy in the region accounted for less than 40 percent global piracy, the Middle East faces a growing financial risk as shipping companies assess whether to continue using the routes or seek out new ones as insecurity and insurance premiums rise.

While offering rich pickings for impoverished Somalis, piracy is seen as an enemy to international navigation, maritime trade and security, and is compared by some to terrorism. The U.N. adopted several resolutions that authorize countries to take counter-piracy actions off the Somali coast according to Chapter 7 of the U.N. Charter.

“In the end, any final analysis you’ll get puts this crime or phenomenon in the category of terrorist attacks on the civilized world,” Dr. Ahmed Said Naggar, an economic and political analyst at the Ahram Center for Political and Strategic Studies in Cairo told AlArabiya.net.

“This jeopardizes the safety of maritime transport with the intention of blackmailing countries and companies to get a lot of cash without a legal right,” he added.

Shipping companies and businesses reliant on global trade face a difficult future of higher insurance costs and longer journey times as they attempt to stay clear of the threats.

“I could see quite radical changes in the insurance market to protect interest of companies,” Toby Sizeland, head of the AXA Corporate Solutions in the UAE told AlArabiya.net.

Sailing from Dubai to Europe via the Gulf of Aden take about 18 days, and rerouting adds another 14 days to the trip. A large cargo vessel currently runs at $16,000 per day, which can mean an extra $250,000 per trip, according to Basem Chbaklo, deputy CEO of logistical firm Agility Middle East and Africa.

Suez Canal hit hard

 Piracy in the region means less traffic for Suez Canal and subsequently less revenue for Egypt 
Muhammad Abdel Wahab

The Suez Canal, a strategic shipping route that has linked the east and west for a century and a half, is at the heart of pirate problem and faces an uncertain future.

The 120-mile (193 kilometres) canal connects the Mediterranean and the Red Sea, where no pirate attacks have taken place. But the only link between the Red Sea and the Indian Ocean, which leads to China and India, is the Gulf of Aden, where Somali pirates have attacked around 120 vessels this year alone.

The waterway is likely to take a big hit as piracy forces shipping companies to avoid the canal and seek out alternate, more expensive routes, a step that could spell economic disaster for Egypt.

The Suez Canal is one of Egypt most important economic assets, bringing in $5 billion in fees – paid in foreign currency --last year.

“Piracy in the region means less traffic for Suez Canal and subsequently less revenue for Egypt,” noted spokesperson Muhammad Abdel Wahab to AlArabiya.net.

About 18,000 ships use the canal, or 7.5 percent of annual world commerce. The waterway is thus crucial for shipments from China and India, whose traffic volume indicates the state of global economic health.

Already, several shipment companies are avoiding Suez Canal.

One of the biggest, Denmark’s Maersk is scaling back its Suez operations and rerouting some of its vessels around the Cape of Good Hope.

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