Extra security to cost ships $100,000 per trip thru risky sea routes

TBS Illustration

Enhanced security measures taken for safe voyage through pirate-infested waters is costing Bangladeshi shipping companies around $100,000 extra per trip, which will add to freight charge and eventually pass on to consumers, ship owners have said.

Ocean-going ship operators are having to spend the additional amount for obtaining war risk insurance, deploying armed guards and purchasing security equipment such as water cannons and laser weapons in the wake of the hijacking of MV Abdullah by Somali pirates.

"To enhance security, each voyage will count around $50,000 for war risk insurance and an additional $50,000 for escort services. Consequently, these added expenses will be reflected in the freight charges for each voyage, resulting in increased international freight costs. This, in turn, will impact product prices," said Azam J Chowdhury, chairman of the Bangladesh Oceangoing Shipowners' Association.

He told TBS that following the capture of MV Abdullah by pirates, all oceangoing ship owners have been instructed to obtain war risk insurance and to ensure necessary security measures, including escort when passing through risky waters.

According to shipping industry insiders, the Russia-Ukraine conflict and the Red Sea attack by Houthi militants had already rendered sea trade unstable, adding to both time and cost of ocean freight. The Somali pirate attacks on a Bangladeshi ship have worsened the crisis.

On 12 March, the Bangladeshi-flagged cargo vessel MV Abdullah, which was carrying coal, was hijacked along with 23 crew members by Somali pirates in the Indian Ocean near Somalia's coast.

The authorities of SR Shipping, a subsidiary of KSRM that owns MV Abdullah, have reached the final stages of negotiation with the pirates to free the sailors after Eid-ul-Fitr.

International Maritime Bureau guidelines say ships must be equipped with high-powered water cannons as a piracy deterrent. Additionally, acoustic and laser weapons are recommended. Furthermore, ships may employ barbed fencing, boat traps, or net traps to ensnare criminal vessels. Lubricant foam serves as another tool to thwart attackers. The International Maritime Bureau also advises the presence of armed guards.

Mohammad Abu Taher, general manager (Technical) of Meghna Ocean Going Fleet, told TBS, "Our Meghna Harmony vessel is en route from Dubai to South Africa. Armed guards were hired to navigate through this area. With additional expenses incurred in transportation, prices of goods at the consumer level will be impacted."

Before the Red Sea unrest, the daily rate of Bangladeshi bulk carriers on the Europe-America route hovered around $25,000. These rates have since climbed to $35,000, Taher said, warning that piracy could push the rate even higher.

Doria Shipping Ltd Director Manshood Alam also admitted to taking similar security measures.

There are a total of 96 Bangladeshi-flagged ships operating on international sea routes. These include seven from the state-owned Bangladesh Shipping Corporation and the rest owned by private operators. Of them Kabir Group (KSRM) runs 23, followed by 22 from Meghna Group, 10 from Akij Group, eight from HR Line, six from Bashundhara Group, six from Vanguard Shipping, three from MI Cement, two from Doria Shipping, two from Hanif Group, two from PNN Shipping, and one each from Orion Oil & Shipping Ltd, Sunshine Navigation, SAFINAH PH Navigation, Doreen Shipping, and MJL Bangladesh Ltd.

There are currently no regulations regarding the presence of gunmen or weapons on commercial ships. However, ships are allowed to carry five or more armed personnel from different ports when traversing risky areas. Upon exiting these hazardous zones, these armed personnel disembark at the nearest port.

Shipowners said fees for gunmen could range from $20,000 to $80,000, depending on the region and the level of risk. However, with the diminishing threat of piracy, ship owners have largely ceased employing armed personnel to avoid additional expenses.

Data provided by shipping companies show seven high-risk routes and locations have been identified for commercial shipping along international sea routes. These regions include the coast of Somalia, the Gulf of Aden and the Red Sea, the northern Arabian Sea, the southern coast of Africa, the Gulf of Guinea, and coastal areas of Indonesia. Among these, Somalia and the Gulf of Guinea are identified as the most piracy-prone areas.

Azam J Chowdhury said without active drives by the naval forces of various countries, there would be a resurgence in pirate attacks on ships. Piracy incidents reduced significantly following successful multinational efforts around 2010. Similar raids should be conducted now to tackle the recurring incidents.

According to shipping industry insiders, around 80% of global trade is conducted via sea routes, utilising approximately 93,000 commercial vessels and involving 1.25 million seafarers. Moreover, an estimated 10-15% of world trade by sea traverses piracy-prone areas.