More ships are expected to make calls at East African ports following a drop in maritime crime targeting shipping lines over the past 20 years.
Cargo ships destined for Mombasa, Dar es Salaam, Jeddah and the port of Djibouti have previously had to use circuitous routes to avoid being attacked in the Indian Ocean. Others have had to pay higher insurance premiums or hire security escorts, which in turn made importation costly for the local consumer.
Now, the Allianz Global Corporate & Specialty SE (AGCS) “Safety & Shipping Review 2022” report indicates that maritime piracy in the Indian Ocean has almost disappeared.
Only one incident was recorded aboard the MV Anatolian on August 13, 2021 along the coast of Somalia, but the description of the event is more oriented towards post-smuggling.
The Kenya maritime waters were re-designated from being a High-Risk Area by the global shipping industry about three months ago.
The Gulf of Guinea in 2021 witnessed a drastic decrease in piracy acts of more than 60 percent compared to 2020 but remains the hotspot for global maritime piracy.
High risk waters
Shippers Council of Eastern Africa (SCEA) Chief Executive Gilbert Lagat said the reduced risk would save East African traders millions of dollars in insurance and security expenses and encourage more ships to call.
“Reduced risks as a result of improved surveillance will lower cost of importation and also encourage those shipping companies which suspended operations along such routes to resume,” said Mr Lagat.
The decrease in piracy cases has been linked to international naval presence in the region.
The East African and Horn of Africa maritime waters were designated high risk in 2009 by the Best Management Practices to Deter Piracy and Enhance Maritime Security (BMP-5).
Since then, shipment insurance premiums went up and five of the largest global shipping industry associations withdrew operations in the region. Among them was the International Association of Dry Cargo Ship Owners, International Association of Independent Tank Owners, International Chamber of Shipping, Oil Companies International Marine Forum and Baltic and International Maritime Council.
“With reduction of piracy cases, traders will have a variety shipping lines to choose from depending on the kind of goods they are importing or exporting, which will reduce shippers’ competition and ultimately reduce cost of sea freight,” said John Karisa, a clearing and forwarding agent in Mombasa.
AGCS global head of marine risk consulting Rahul Khanna noted that the global shipping sector has demonstrated tremendous resilience in recent years as safety levels increased.
Khanna said losses this year are at record lows but the situation in Ukraine has caused widespread disruption in the Black Sea and elsewhere, exacerbating ongoing supply chain issues, port congestion and crew crisis caused by Covid-19 pandemic.
The report warned of a heightened prospect of cyber risks for the shipping sector such as GPS jamming, Automatic Identification System (AIS) spoofing and electronic interference.
Prior to the Ukraine invasion there had already been a number of these incidents, reported in the Middle East and China.
The designation by International Maritime Organisation (IMO) by BMP-5, is a relief for shippers who have been suffering for the past eight years.
IMO is the United Nations (UN) agency responsible for improving the safety and security of global shipping.