Group Estimates The True Cost of Piracy

The US-based anti-piracy think-tank, One Earth Future has got the calculator out again and has been crunching the costs of piracy.
According to their latest figures the economic cost of Somali piracy last year came to $6.6bn-$6.9bn, with about 80% of the bill falling on the shipping industry, according to research
Average ransoms increased by 25% from approximately $4m in 2010 to $5m in 2011. Although the total cost of ransoms hit $160m in 2011, that still represents a modest 2% of the overall impact.

The US-based anti-piracy think-tank, One Earth Future has got the calculator out again and has been crunching the costs of piracy.
According to their latest figures the economic cost of Somali piracy last year came to $6.6bn-$6.9bn, with about 80% of the bill falling on the shipping industry, according to research
Average ransoms increased by 25% from approximately $4m in 2010 to $5m in 2011. Although the total cost of ransoms hit $160m in 2011, that still represents a modest 2% of the overall impact.
While the multi-billion dollar costs a bad news, there is a silver cloud as the figures are down on the $7bn-$12bn the estimated for 2010.
Insurance costs are put at $635 m, with anywhere around $486m-$680m spent on rerouting vessels along the western coast of India.
While trying to add up the costs is a useful exercise, there are some who question the “math”. A Lloyd’s underwriter said that while around 20,000 vessels a year transit the Gulf of Aden each year, kidnap and ransom premiums have actually been falling sharply of late.
Two years ago, the cost per voyage was around $15,000-$20,000, last year it was around $10,000 and right now it is around $3,000, so even $200m would probably be a generous estimate of additional insurance outlays.