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Piracy Jacks Up Insurance, Fuel Costs
Entering high-risk areas or navigating around South Africa both add millions
By Drew Nelles
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Posted Apr 13, 09 12:42 AM CDT
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(Newser)
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Piracy in the Gulf of Aden is driving up shipping costs as companies are forced to choose between paying higher insurance or taking longer routes, the AP reports. Premiums have reportedly risen at least tenfold for travel near the Somali coast, and avoiding the Gulf of Aden by navigating around the African continent adds thousands of miles and millions in fuel costs.
"The pirates were the only people who had a good year in 2008," a security consultant says. “War risk” insurance covers acts of piracy, but costs more in high-risk areas like the Gulf of Aden. And experts say nowhere is safe anymore: "Whichever way you go you're going to run into pirate hotspots somewhere down the line,” one suggests.