Shipping companies taking things into their own hands

-- This looks to be a trend that we will be seeing more and more as collapse continues. Whether it is government or private industry, military will be deployed to protect vital assets, such as shipping routes, mining areas, and vital infrastructure that possess large quantities of copper and other resources. -- JB, Managing Editor

The world's most dangerous shipping route gets its own Navy

Business Insider,

15 May, 2012

Shipping insurance companies are taking the fight against piracy into their own hands.

With plans to deploy a "private navy" in the Gulf of Aden — where Somali piracy is rampant — the Convoy Escort Program (CEP) hopes to have a fleet of 18 ships protecting merchant vessels by December, reports David Black at The National.

The $70 million private program is headed by international shipping insurer company Jardine Lloyd Thompson.

"The CEP is planning to buy seven 150-foot fast patrol boats, understood to be ex-Swedish Navy, and has already earmarked 11 former offshore supply vessels for purchase and conversion," details Black.

The fleet will be based in Djibouti, from where it will provide escorted passage for merchant vessels through the International Recommended Transit Corridor (IRTC). Black points out that the IRTC, between the Red Sea and the Arabian Sea, is the most dangerous shipping lane in the world.

The recommended shipping route was set up two years ago by the Maritime Security Centre - Horn of Africa in response to increased aggression by Somali pirates in the region.

Describing how pirates attack vessels in the Gulf of Aden, the International Chamber of Commerce recounts what typically happens:

"Pirates fire automatic weapons and Rocket Propelled Grenades (RPG) at merchant vessels in an attempt to board and hijack them. Once the attack is successful and the vessel hijacked, they sail the vessel towards the Somali coast and thereafter demand a ransom for the release of the vessel and crew," the organization wrote.

The National reports that there is a ton of money at stake:

Piracy in the region is costing the global economy an estimated US$7 billion a year. For the ship owners alone, every vessel sailing through the waters off Somalia is charged additional insurance premiums of between $50,000 and $80,000.

Ships opting to carry their own armed guards can be charged an additional $18,000 and $60,000 per voyage by security companies.

Although the European Union is spending more than €8m (Dh37.94m) a year to maintain a naval force in the waters - EU NavFor - its warships still cannot provide close support to all merchant vessels.

The program will ask merchants to pay a flat fee of $30,000 to $40,000 for each ship in the convoy. Up to four merchant ships can be escorted at a time by one main CEP vessel, and additional support craft covering the east and west, reports Black. Here's what he reports the escort ships will be loaded with:

The ships will be equipped with fast semi-inflatables, called ribs, an array of non-lethal counter-measures, and 0.50 calibre heavy machine guns. They will be operated by a crew of five and carry eight armed security personnel each.

The aim is to stop the pirates before they reach the merchant ship, and the emphasis is on non-lethal measures. Use of offensive weapons will be a last resort.

When the idea first starting getting off the ground last year, UPI reported that a British security firm in London, BTG Global Risk Partners — whose founder was a major in the Canadian Army — was advising the CEP.