Cargo Shipping – The Threats to Trade

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  • Trade-A-Boat

Every year the bulk of international trade is carried on thousands of cargo ships across the sea and oceans en route to our Australian ports in a global industry estimated to be worth more than $1 trillion dollars.

Cargo Shipping – The Threats to Trade
Cargo Shipping Pirates in Somalia

The Gulf of Aden (off the coast of Somalia) is considered one of the most important of these marine trading routes, with more than 20,000 cargo ships annually transiting through the Gulf to the Suez Canal and regional petroleum refineries.

As a vital waterway for Australian trade and the world economy; this area now sees the largest share of piracy attacks against cargo ships, with Gulf authorities reporting shipping traffic declines, revenue losses, rising insurance premiums and millions of dollars of ransom payments that now threaten the prosperity and security of maritime trade.

In addition to these issues facing the maritime cargo community, alternatives to using the Gulf of Aden are very limited. Routes to Europe and North America via the Cape of Good Hope increase the journey time by up to 3 weeks resulting in increases to shipping costs and threaten the existing regional trade of countries such as Egypt, Sudan, Saudi Arabia, Eritrea, Ethiopia, Dijbouti and Yemen.

What Types of Cargo Ships Are Targets of Piracy?

There are four primary cargo carrying types of ships (or freighters): general cargo vessels, tankers, dry-bulk carriers and multipurpose vessels. Although not limited to attacks on one type of cargo ship - bulk carriers, container ships and general cargo ships comprise the majority of piracy targets.

Cargo ships also fall into two additional industry categories when considering the impacts of Somali piracy: liner and tramp services. The (typically larger) cargo liners are on a fixed published schedule and tariff rate. Tramp ships do not have fixed schedules; instead they are chartered to haul loads and are generally operated by smaller shipping companies or individuals.

Because of their higher operating speeds and freeboard, liners (specifically container ships and roll-on/roll-off vessels) have been traditionally considered to be at lower risk of hijackings than many of the smaller tramp vessels. But these larger cargo ships have now also been targeted for attack and hijack by Somali pirates. In response, many companies are now arming their fleets with private armed guards and enlisting the support of naval escort missions through the Gulf corridor.

Almost unheard of in the previous decades, piracy is now at the forefront of the attention of the International community. Safe maritime trade is essential for our cargo carriers; to eradicate it once again will require concerted effort and resources in an international partnership between governments and the maritime industry.


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