C-LEVEL MARITIME RISKS
______________________________________________________________________________



Michael G. Frodl, Esq. & C-LEVEL Maritime Risks

Intel collection, analysis, early trends recognition & forecasting

WASHINGTON, D.C.



Ships at sea off the Horn of
Africa.



SITE MAP

INTRODUCTION

OUR HISTORY

TANKER RANSOMS

RECENT PIRACY TRENDS

MAP & CHART GALLERY

OUR SERVICES

HISTORY / TUTORIAL

SPEECHES, COLUMNS, INTERVIEWS & QUOTES

GOOGLE SEARCHES

SAMPLE REPORTS

FREE TRIAL




INTRODUCTION



EXECUTIVE SUMMARY

C-LEVEL Maritime Risks is an emerging risks consultancy, founded and headed by Michael G. Frodl, Esq., a Washington, DC-based attorney who has served as an emerging risks adviser to members of the national security community in the Nation's Capital, as well as to underwriters in Bermuda and then London for many years now.

Since the 1990s, Michael has advised on numerous emerging risks: first environmental energy, and climate change risks, then cyber, anarchist / anti-globalist, and terrorist risks (including WMD terrorism), and mostly now modern maritime piracy, terrorism and supply chain risks.

Starting in late 2008, after the hijacking by Somali pirates of a Saudi supertanker headed to New Orleans with 2 million barrels of crude oil, Michael began advising and interfacing between the national security community in Washington and the underwriting communities first in Bermuda and then in London. He helped the communities not only acquire an early understanding of the nature of modern piracy as was being conducted off the Horn of Africa by Somalis, and where it was likely headed, but also, through his liaison work / risk diplomacy, he helped each learn what the other was able and willing to do so as to respond to the threat.

This Website describes how Michael's advisory work on modern maritime piracy become much more steady if not permanent in the course of 2009. He'd bring together a team of former government, military, and intel analysts, as well as Wall Street financiers and London underwriting advisers who'd help him refine his insights into modern maritime piracy.

By late 2009 Michael and his team became sufficiently concerned about the Somali threat to tankers laden with Persian Gulf oil headed not to the US but to East Asia such that he warned that pirates would soon be attracted to the sea lanes just west of India. By end of 2010 it would be recognized as fact, with even Lloyd's of London's Joint War Committee extending the high risk area out all the way to 78 degrees East of Greenwich (to include the southern tip of India).

In mid 2010 Michael began traveling to Asia and not only warned maritime interests there of what he was seeing developing in the Indian Ocean, but also learned much from his discussions (DC and London know much, granted, but so do the senior people in Asia, where not by coincidence the merchant marine industry's center of gravity is today). Michael now stays in close touch with key maritime stakeholders in Asia and advises clients across the region.

Given the work Michael did to help first Washington, Bermuda and London, and now Shanghai, Hong Kong and Singapore, not just understand Somali piracy but also forecast its developments, in early 2012 his clients asked him to do the same with Nigerian piracy and SE Asian piracy. They also asked him to do the same with threats to strategic sea lanes through choke points such as the Straits of Hormuz and of Malacca and the Suez Canal, as well as even do the same with potential threats to navigation and commerce in the South China and now East China Seas.

This Website traces history linearly, so the reader will first learn about the modern maritime piracy work Michael and his team first did - this appears in the narrative immediately below.

For the continuation of the story, where Michael and his team expand to choke points and other threats to strategic sea lanes, the reader needs to hop over to the picture gallery / tutorial in the second half of the website, after the narrative and before the list of speeches and press articles. Each picture contains a caption that pops up when the reader rests their computer's cursor over the image, allowing the reader to follow the development of C-LEVEL Maritime Risks as it expanded its repertoire.

This Website is regularly updated, so we invite the reader to check back to learn about our latest work as well as comments to the public.


FYI / FAQ: Our name, "C-LEVEL Maritime Risks", was carefully chosen and involves a word game / double entendre.

On the one hand, "C-LEVEL", as written, refers to the corporate officer level / senior most decision maker - who is the leading target of our unique form of support.

While on the other hand, "C-Level", as heard, evokes - at least in a maritime context - the concept of "sea-level".

That's no accident.

This is because we mean to provide a level of analysis and overview that suits senior decision makers operating well above the action, while also providing them the detailed view at the wave tops.

As in, where "C-Level" meets "sea level".

Giving top decision makers the view from the heights as well as the from the trenches is in today's increasingly complicated as well as increasingly hierarchical world vital.

In military strategy something similar exists and has been called "Fingerspitzgefuehl": a German word that means "feeling from the finger tips". Some call it intuition but it really means having the "touch" for your battlefield. Many great military leaders since Caesar have posessed this rare faculty - Napoleon in his own campaigns sought out the very same battlefields that Julius Caesar had chosen after personally locating and walking through geography that would favor his strategies.

It's hard to convey the concept as we invoke it in the maritime domain through one image or in any logo. Two pictures just might, though, get the idea across better for you.

The first image is the entry page into this Web site or "splash page" (another pun - sorry). You'll find it at http://c-level.us.com/index.htm. It incorporates the waters of the Gulf of Aden off Berbera behind the C-LEVEL name. So that's a view at the "sea-level".

The second image is below. We provide you with the view from above St. Barthelemy in the French West Indies. By coincidence once the home port of "Montbars the Executioner", a French pirate who terrorized the Spanish in ways that would have perhaps made Vlad the Impaler blanche - but it's not really "coincidence" because many locations have known pirates over the centuries. More importantly, today St. Barth is an elite resort destination favored by many of the top people in business and finance. So that's a view from the "C-Level".

Our mission is to provide the "big picture" to people who see the world from thousands of feet above, and advise them on where that picture may be leading the world, while also keeping them in touch with the details they need from where the action is. So they can lead better.


Saint Barth in FWI.



Early piracy work

The competitive advantage of C-LEVEL is that it considers modern maritime piracy in general, and Somali piracy in particular, as the sum of related but competing and ever evolving ongoing criminal enterprises.

Modern piracy may seem to outsiders be just one big and amorphous threatening organism or even a conspiracy of organisms hell-bent on terrorizing merchant ships and even yachts, but it's actually more a thriving and constantly adapting criminal industry - a complex adaptive system - where actors learn from each others' mistakes and successes and constantly discover new opportunities. Players compete with each other more than they conspire.

Unfortunately, much of the public and even some private reporting and analysis is of a secondary if not even tertiary nature, and so errors in interpretation are not only often not caught, they are compounded and repeated.

For example, many pirate observers, even the very good ones, tend to blur things and talk about "THE Somali pirates". They talk about Somali pirates as if they were a unified conspiracy to terrorize merchant mariners. Or they get engrossed in the details of just one "pirate action group" and lose sight of the higher order forces at work. The result is that they can't recognize trends or make reliable forecasts.

Michael G. Frodl, Esq. and his C-LEVEL Maritime Risks US-based team and their network of independent collaborators in the US, Europe, Middle East, Africa and Asia work with reports authored as close as possible to the events (at the wave tops, as the name "C-LEVEL" - for "sea level" - implies when spoken).

They sort through hundreds of daily online open source reports, receive tips in the form of unpublished reports from people close to the action, compare all those inputs to models developed over years of studying modern maritime piracy, float their findings discretely and get feedback from their extensive network of senior level consumers of intel who are themselves privy to information that never gets into the public domain (at the corporate officer level, as the name "C-LEVEL" - for "Chief Officer Level" - implies when written).

This continuous loop of bottom-up collection, comparison, and analysis offset by top-down feedback allows constant updating and adjustments of models and permits early trends recognition, dynamic tracking and forecasting of piracy threats, even long range.

Michael and his team are not new to using business modeling tools for the analysis and forecasting of behaviors of outlaw groups. They created differentiated and dynamic business models to analyze al Qaeda - the "Afghan Arabs," the newer affiliates that swore personal allegiance to OBL, and the independent cells inspired by but not connected to either.

As a result, Michael and his team were able to make successful long range forecasts leveraging the insights the models allowed them, including on attempts to influence the 2004 US Presidential election (based on the Madrid train bombing precedent - the conservative Spanish government had been toppled), on attempts to wreak havoc through independent action (reports of spontaneously self-generated Islamist cells were emerging but being discounted by people who should have known better), and attempts to use WMD in a terrorist attack (reports that al Qaeda researched NBCR were rampant but Michael and his team conclude the threat was more hype by OBL et al. than reality - only a "dirty bomb" seemed practical).

Forecasts by Michael and his team flew in the face of the conventional wisdom of many experts - many an "Orange Alert" that Michael and his team were asked to weigh in on was debunked, while other threats they DID warn of were never included in any DHS warning - only their clients or close confidants got them. This earned Michael and his team respect among their underwriting, banking and air transport industry clients, as well as among senior people in the USG.

The forecast about 2004 elections was used by the private firm assuring security at the Republican presidential nominating convention in NYC. The forecast about the growing threat from spontaneously self-generated Islamist cells was vindicated in less than a year by the July 7, 2005 London Tube bombings - since then many more attacks have fit the forecast. The forecast about WMD threats was used by the mortgage banking and real estate development community to weigh risk mitigation improvements against the threat of dirty bombs - the only realistic NBCR threat. The forecast was also used by a major underwriter to review existing policies and exclude "dirty bomb" coverage that had been inadvertently granted through fuzzy contract language.

This business modeling approach allows Michael and his team to analyze piracy and counter-piracy events from an unusual angle. They can anticipate how pirates will pursue immediate as well as distant opportunities, as well as how they will respond to the latest counters to their efforts, in a way that most analysts "black-boxing" pirates and viewing them as just another form of terrorism are incapable of doing.

The results have already come in for a few years now and Michael and his team have been many times a year or more ahead of events.


RETURN TO OVERVIEW



Warships in maneuvers.


OUR HISTORY


First long range Somali piracy forecast - December 2009

Michael was able to warn a senior maritime strategist in the Office of the SecDef and advising the SecNav as early as December 2009 about the some Somali pirates' moving towards longer range raiding - because their higher overheads would be more than compensated by the opportunity to raid a wealth of unsuspecting tankers sailing low and slow and unconcerned to East Asia as they passed by western India.

Michael also warned of the longer range raiders tilting more towards maritime kidnaping and hijacking only the most lucrative prizes for return to Somalia. C-LEVEL anticipated attempts by foreign navies to intercept the freshly hijacked ships during the longer voyage back to pirate ports in Somalia - it was one of the few vulnerabilities in the evolving pirate business model.

The December 2009 briefing to the OSD was recast as a column on changing Somali pirate tactics and published in National Defense magazine (a free copy is available upon request).

Exactly one year to the day after briefing the Pentagon, Michael and his group were independently vindicated by the Joint War Committee at Lloyd's of London when on December 16, 2010, it expanded the "Listed Area" where "war risk" premiums have to be paid and included the waters west of India. Longer range Somali raiders had earlier in 2010 become a constant and significant threat there, precisely as Michael had warned in 2009 (no other private intel group had issued warnings so precise and so early).

The December 2009 warning about a tilt into more maritime kidnaping is also being validated still today, as longer range raiders now attack small personal yachts and snatch civilian boaters (the SV Quest and its 4 Americans most notably, but also a Danish family only 2 days after the Americans were murdered).

Many of the other predictions in the first long range forecast have still are playing themselves out.


Warships escort merchant vessels in Gulf of Aden.

Explaining forward-basing - "X marks the spot" - January 2010

The first long range forecast was quickly followed by a short paper analyzing rapidly evolving Somali forward-basing strategy and tactics ("X marks the spot" echoes the stories of old pirate maps and buried treasure). The paper was prompted by people who had read the forecast and asked how pirates could operate at such increasingly long distances from home.

The smarter long range raiders when displaced the paper explained didn't just keep moving until they reached the next shipping lane and just started raiding there. If they did, they'd only get the occasional passing ship, easy to miss on the high seas, and would have to break off soon to go back home to resupply. That's a drop in revenue accompanied by an increase in overhead. Those pirate groups would soon run out of funding unless they were just lucky and caught a VLCC almost against the odds.

The smarter long range pirates the paper explained would look for a significant increase in ship traffic and so would focus on intersections or convergence points of major sea lanes (for example, where the Gulf of Aden to Fremantle route converges with the Hormuz to Cape route), and then among those, favor ones that were a day or two steaming at most from a friendly island where fuel, food and water could be acquired from the natives (for example, one of the smaller islands of the Seychelles).

Long range raiders the paper explained were ready to increase their overhead as long as they were able to increase the promised return on those investments even faster. The forward-basing approach described would allow for this.

The January 2010 paper also showed that very early on - earlier in fact than anyone else - Michael and his team already had identified the waters south of India and Sri Lanka as meeting all the criteria. Since then, the signs have become even more supportive of that conclusion.



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TANKER RANSOMS

Record ransoms for hijacked oil tankers - November 2008 to present


[ Please run your cursor over pictures so explanatory captions can pop into view. ]


Sirius Star - US $3.2 million
ransom paid for the VLCC - January 2009

Maran Centaurus - US $5.5 (or
$7?) million ransom paid for the VLCC - January 2010

Samho Dream - US $9.5
million ransom paid for the VLCC - November 2010

Irene SL - US $13.5 million
ransom paid for the VLCC - April 2011

MV Zirku - US $12.0
million ransom paid for the Aframax - June 2011

Savina Caylyn - US $11.5
million ransom paid for the Aframax - December 2011



RETURN TO OVERVIEW


Second long range Somali piracy forecast - April 2011

C-LEVEL developed a second long range forecast last year that reviewed recent trends and built them into the original long range forecast's business model of Somali piracy.

The growth in hijacking local trawlers and even large foreign merchant vessels which the pirates put to work as motherships and use the crews as human shields to prevent interruption by foreign navies has been leading to a premium being put by long range raiders on leveraging human lives so as to operate hijacked ships, protect them from attack, and make money.

Pirates were also beginning to pivot again to avoid focused repression by warships - this time not out of the Gulf of Aden, but to avoid the waters immediately to the west of India.

C-LEVEL forecast some pirates would make a tactical retreat to the waters south and east of Oman to avoid the Indian warships to the East and the patrols of the IRTC to the West. The waters about 150 nautical miles to the SE of Salalah would become a hot spot in 2011 - and still are.

C-LEVEL forecast - and still believes - that other pirates, namely the most ambitious and professional long range raiders, would move into the waters South of India where they could keep attacking tankers headed to the Far East with less risk of interference by Indians. Reports from NATO and a UK PMSC in early 2012 warned of a growing presence of Somali pirates to the East and North of the Seychelles and Maldives.

C-LEVEL still believes that Somali pirates using forward bases (also predicted in the December 2009 briefing) in the Maldives, as well as relying on arms and other support from the remnants of the LTTE in Sri Lanka, will present an even greater threat to merchant vessels.

C-LEVEL believes that Somali pirates will be able to threaten not just the sea lanes of the NW Indian Ocean as they go around the Southern tip of India, they'll also be able to attack the Cape-Malacca route that so far has escaped much if any predation. The warnings from NATO and the PMSC already mentioned above allude to this possibility.

C-LEVEL believes that as a result Somali pirates will be one step closer to attacking the approaches to the Western end of the Strait of Malacca.



RETURN TO OVERVIEW


MAP & CHART GALLERY

Strategic Sea Lanes of Communication (SLOCs) in the Indian Ocean


[ Please run your cursor over pictures so explanatory captions can pop into view. ]


Major winds of the world.


Major currents of the world.


Major sea lanes of the world.


Major chokepoints of the world.


Major areas of maritime piracy in the world in past 30 years.



Major sea lanes of the Indian Ocean


Major energy sea lanes of the Indian Ocean. Courtesy of Petroleum World


Major energy sea lanes and energy pipelines of the Indian Ocean and Asia. Courtesy of TamilNation.co



Comparison of Africa with USA, Europe, China and others, to show continent's true size.


Comparison of size of USA to Somalia, then the Horn of Africa in relation to NW Indian Ocean. Courtesy of U. Texas


Comparison of size of Europe to NW Indian Ocean & other



Indian Ocean - satellite view from geostationary orbit - 22,000 miles up.



Spread of piracy year by year from 2007 to fall of 2011. Courtesy of MUSC.


Spread of piracy by beginning of 2011. Courtesy of FT - sourced to EU Navfor & IMB.


Somali piracy bases / locations where ships can still be held offshore with complicity of onshore authorities, as of February 20103


Major sea lanes of the Indian
Ocean - represented by AIS pings - circa 2008. Courtesy of USCG & SpaceQuest


Spread of piracy by end of 2011 - orange represents waters with Somali pirates, red represents highest risk zone. Courtesy of Naval Oceanographic Office War Fighting Support Center.


Spread of piracy by beginning of 2011 - orange represents waters with Somali pirates, red represents highest risk zone. Courtesy of Naval Oceanographic Office War Fighting Support Center.


Spread of piracy by end of 2011 - orange represents waters with Somali pirates, red represents highest risk zone.Courtesy of Naval Oceanographic Office War Fighting Support Center.


Spread of piracy by end of 2011 - orange represents waters with Somali pirates, red represents highest risk zone.Courtesy of Naval Oceanographic Office War Fighting Support Center.


Major sea lanes of the Indian
Ocean - represented by AIS pings - 2009 and then 2011 - representing sea lanes readjusting to avoid Somali pirates. Courtesy of OEF & SpaceQuest


Admiralty chart developed to assist mariners in navigating piracy high risk zones of the NW Indian Ocean.



RETURN TO OVERVIEW


Somali piracy trends in the Gulf of Aden & NW Indian Ocean region

Since the fall of 2011, C-LEVEL has been increasingly troubled by the reporting about Somali piracy. Some groups that became involved only very recently in reporting Somali piracy started arguing that Somali pirates had destroyed their business model - this because they were becoming bad faith negotiators - and shipowners were losing patience with the pirates.

We issued an in depth refutation of the hypothesis, and then in rapid succession also issued a series of follow ups. It became clear in just over a month after we issued our warning against the "happy talk" that the Somali pirates were headed to make their biggest haul ever in 2011.

If in 2009 Somali pirates earned just over $70 million US in ransoms, and in 2010 just over $80 million, then in 2011 they earned over $150 million - and that from returning only half as many ships. That is not a doubling of their rate of return, but a quadrupling.

If that is a "broken" business model, we dare not want to see a successful one!

And while the number of successful hijackings dropped significantly in the second half of 2011, the number of attacks continued to grow. That is something that many public reports gloss over - but that merchant vessels and their crews using pirate-infested waters have to endure.

A combination of closer-to-shore harassment by the warships of foreign nations, more consistent respect for Best Management Practices, better intelligence about where pirates are operating, and armed guards on a growing number of merchant vessels has forced the Somalis to improvise and adapt. Unfortunately for maritime commerce, the pirates are getting even more aggressive and violent.

They have abandoned using hijacked merchant vessels as motherships for long range raiding - because it was too easy for foreign navies to track them down and warn other ships, while the fuel costs for operating large vessels were too high. So the Somalis returned to using hijacked local fishing boats - many times dhows - and using them as motherships which could hide in plain sight from anti-piracy patrols.

Somali pirates are now also attacking on the comparative peripheries - not just around and to the North of the Bab el Mandeb, but also in the Mozambique Channel, and even closer to the Strait of Hormuz - as patrolling by foreign warships is much lighter there and merchant vessels are more likely to let down their guard there. ALSO, the more ambitious Somalis are indeed probing in the waters to the South of India and Sri Lanka.

In a troubling related development, C-LEVEL noted an increase in attacks in those waters, but attacks that Somalis can't possibly all be responsible for. We must conclude that the example of the Somalis has inspired local copy cats.

It's by no coincidence that the Italian tanker Enrica Lexie was embroiled in an incident in February 2012 off Kerala - ships have been attacked regularly in waters off India and armed guards have become very jumpy and quick to defend their merchant vessels from approaching smaller craft.



RETURN TO OVERVIEW



RECENT PIRACY TRENDS


Somali Piracy trends (as of September 2012)

Over the summer of 2012, attacks by Somali pirates dropped in frequency, and many of the hijackings were only of local fishing boats, used to operate as "mother ships".

As a result, some folks in the West have rushed to claim "victory" over Somali pirates - and depending on who you listen to, it's all because of what they and their comrades have done: the uniform military claim that they've been largely to credit, while private armed guard firms take the credit, and then Best Management Practices advocates claim they have been the main contributor. No one seems to want to acknowledge the other two - it's quite silly and actually a distraction - as all are in some way or another responsible.

But there is also more going on than meets the eye.

FIRST, as pirates became more proficient as negotiators in 2011, they learned to extract more cash by twisting a few shipowners' arms better, instead of rushing about and capturing any and all merchant vessel they could and negotiating like amateurs. Any how, hunting for new prize has become rather prohibitive, given the chances of being shot at by private armed guards, or run down by patrolling warships that now don't hesitate to launch intercepts and rescue operations.

The latest news of a hostage being executed fits well into the line of "no more Mr. Nice Guy - pay up or pay the consequences". If the owner of the MV Orna pays up promptly, we expect that executing a hostage after negotiations drag on "too long" per the pirates will become common for all the pirate gangs.

SECOND, pirates were cautioned by their politician friends (and leading investors and partners in crime) in Mogadishu and in Puntland that their animated antics were threatening the flow of foreign aid that was meant to stabilize Somalia - the politicians were now able to draw down more millions a week or month of foreign aid than the pirates could ever dream of - so the pirates calmed down - probably with a promise of the millions in diverted foreign aid.

We are also aware that at least one leading Somali pirate gang has plowed some of its ransom earnings into the construction of a new luxury hotel for Mogadishu - that may very well be used by visiting foreign donor teams. The pirates are making money the smarter way right now.

THIRD, Somali pirate bosses read the business newspapers and maritime trade press - and so they are aware of the fact that shipowners are under more pressure financially this year than in 2009 (just after the 2008 financial markets meltdown, the maritime shipping world took it on the chin, but most shipowners and shippers still had some cash left aside - today, all those reserves are gone).

The craftier pirate bosses are therefore calming their game not just so as not to annoy their politician buddies and get a piece of the new monies flowing into Mogadishu - but also so as to encourage shipowners and shippers to declare victory over pirates and abandon the use of private armed guards. Many of the foreign navies engaged in anti-piracy ops off the Horn of Africa are also under unprecedented budgetary pressures. Some are looking for any excuse to declare victory over piracy and send ships elsewhere, or even decommission them outright.

ERGO, by 2013, if the three trends play out as we think they might, Somali pirates may very well return rested, smarter and less worried about meeting armed guards on the ships they covet or being intercepted by a fast warship once they've seized a merchant vessel or big tanker.


Recent piracy trends in Gulf of Guinea and SE Asia / South China Sea

C-LEVEL was asked in January of 2012 by a client in London to focus on the rising piracy threat off Nigeria and throughout the Gulf of Guinea. We reviewed 3 years' worth of reports and concluded that piracy was seriously under reported in the area, and for many reasons.

While the global press now has a good idea of what is happening off the Horn of Africa, perhaps because of the human interest aspect to the stories of crew members from all over the world being held hostage for months if not years in Somalia, that same press has not shown anywhere near as much interest in the victims of piracy off Nigeria.

Perhaps because many of the victims among the crew members of attacked ships are locals who are threatened and beaten mercilessly - they know better than to talk and have the pirates come back and finish them off where they live. That is the most direct reason for under reporting.

The cost of maritime to the economies of West African nations is equal if not greater than that of Somali piracy to the economies of East African nations - but stolen crude oil as well as refined petrochemical products like gasoline or diesel, the most common target of pirates, is almost immediately sold back into the immense black market of oil in the Gulf of Guinea.

While private security in the form of armed guards aboard ships is the main topic of discussion when Somali piracy is being addressed, it represents just a minor fraction of the cost of private security to foreign oil companies operating in Nigeria - by one count, almost $3 billion US every year. The cost to Nigeria from stolen and trafficked oil is even greater.

Despite the great costs to industry and society, it's unlikely that modern maritime piracy will be repressed off Nigeria, Benin and the other coastal states, as too many people in government or uniform in Nigeria benefit from the traffic in oil.

We have decided to monitor piracy in this area closely as it's not going to be turned around any time soon, and in the mean time, Nigerian pirates and their West African brethren are being inspired at least in part by Somali pirates. In the first quarter of 2012 observers detected the adoption of motherships by Nigerian pirates - hijacked fishing boats are allowing them to raid ships well over 100 nautical miles from shore - something unheard of even late last year.

ALSO, observers noted some pirates experimenting with short-term kidnaping of crews and officers from ships. Kidnaping foreign oil executives or wealthy locals on land in Nigeria - especially in the Niger Delta - has been a problem for years. Maritime pirates operating just off that same Delta had shown little interest in kidnaping crews, though. But where the pickings have been found slim - as in little cash or jewelry or consumer electronics - some pirates have opted to grab people off of ships. This trend needs close watching.

SE Asia and the South China Sea have seen their share of piracy in the past decades, but a concerted effort by nations in the region, especially Malaysia and Indonesia, and the disruptive effects of the Boxing Day tsunami, led to a major drop in incidents. There has been stirrings though in the past year or two, though - and we monitor developments in the region closely.

Most acts of piracy in the region are really armed robbery in ports as the ship is at rest, and when there is real piracy at sea, it is more armed robbery of the crew and their personal effects.

Nevertheless, there has been at least a couple of short-term kidnapings of crew off of ships using the Strait of Malacca, and there has been a growth in piracy incidents also in the waters around Indonesia.

We are also aware, given our regular trips to Asia and consultations with shippers and shipowners, of troubling "Somali-like" incidents off Indonesia - the use of motherships and fast attack skiffs has been observed there but not widely reported.

We doubt that Somalis are to blame - the most advanced Somalis are still probing just to the east of the Maldives and Seychelles as well as just South of India and Sri Lanka. So this may be local copy cats.

We believe that Asian pirates, like West African pirates, follow the news and compare strategy, tactics and even business models with the Somalis. While the Nigerian pirates are probably the most successful pirates of all three regions (based on the rate they make money - it takes an average Nigerian pirate gang maybe perhaps only 10 days to make what it takes a Somali pirate gang an entire 10 months), we believe that some Asian pirate gangs could become very well reorganized and constitute a threat again to peaceful commerce in the region.

So while it's unlikely that Somalis themselves will be found raiding in the Straight of Singapore any time soon, we think that the Somalis are already casting a long shadow into Asia - all the way from SW Asia to now even SE Asia - as they've done into Western Africa. So one should not be surprised to observe sudden changes in strategy, tactics and even business models among previously predictable local SE Asian pirates. The learning curve could be considerably shorter if borrowing from Somali pirates is factored in.



RETURN TO OVERVIEW




The flagships of the 3 main anti-piracy forces off Somalia. Left to right: Korean frigate Wang Geon, French FS Marne & Dutch frigate Evertsen.



OUR SERVICES

THREE LEVELS OF REPORTS & SUBSCRIPTIONS

Standard, Premium & Economy - for varying levels of interest, need & budget


C-LEVEL Maritime Risks produces a comparatively brief but comprehensive weekly round up of prioritized piracy & anti-piracy, as well as maritime terrorism, news.

We survey the world's daily, weekly and monthly press not just in English - and not just the English language press in the US and UK, but also other major English language countries such as India and Australia for example, as well as the growing English language press in places like China, Japan, Singapore and the rest of Asia, the Persian Gulf states and the rest of the Middle East, as well as Somalia, Kenya and the rest of Africa) - but also the world's press in French, Spanish, German, Italian, as well as Russian, Arabic and Chinese.

We further filter and prioritize news items based on confidential feedback we receive from people with their own humint from inside the piracy hotspots, as well as from key national capitals like Washington and London. Our small but influential and critically placed circle of "C-level" readers around the world - some people at the top of their organizations and so where all the intel "stovepipes" converge, as well as other people at "sea level" and so with unmatched views from the field- constitute our core feedback loop. We are in fact a collective intel ops.


Our flagship report: the WEEKLY EXPRESS NEWS UPDATE

The Weekly Express News Update - aka the "WENU", begins with an overview & analysis of the previous week's most important news, with thoughts about what the developments mean and where things are headed, followed by a prioritized outline with one line summaries with links to every underlying story, as well as links to online machine translations of every story not in English.


Our Standard Intel Subscription Package includes the WENU.


A Premium Intel Subscription Package exists for those with above average needs. It is the WENU plus personal support services, as in, the package for those who want to schedule personal briefings as needed, as well as get answers to their questions within 24 hours.


An Economy Intel Subscription also exists. It includes the "SUMMARY PLUS" - aka the "SP" - which is built from single line bullet points and clickable links to the underlying stories. It's just what's needed for those who don't want analysis and/or who cannot justify the costs of a standard subscription.


In addition, there is the SUMMARY (with no abbreviation), the lightest and briefest of our weekly reports. We reserve the right to dole is out carefully as we deem appropriate. It is not a paid-in product and should not substitute for either the SP or the WENU, but in some cases, we can and will provide it as a professional courtesy.


Sample copies of the Summary, the Summary Plus, and the WENU can be found on this site
by clicking here.

ALSO, the Summary, Summary Plus and / or WENU can be received for free on a limited trial basis. Please just ask and we'll put you on the complimentary distribution.

Please contact Michael G. Frodl, Esq. directly for a free trial, as well as the most current information about our product line and pricing by clicking here.



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HISTORY / TUTORIAL

Piracy off Africa East & West, choke points, other risks



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This is how Somali piracy all began - at least if you listen to the modern apologists. European and East Asian industrial tun fishing boats like this, dragging miles long nets, swooped down into the incredibly rich waters of Somalia after the national government imploded in the early 1990s. With no one to stop the rape and plunder of Somalia's natural resources, noble Somali fishermen attempted to collect money for fishing permits, but were largely ignored by the rapacious industrial fleets. Then the fishermen organized themselves into maritime militia / people's coastguard of sorts, and went back out armed with machetes and guns - and started getting paid. Then someone had the bright idea of simply hauling the rogue fishing ship back to port and demanding an amazing $50,000 for its return. Soon, the militia / coastguard idea was abandoned and it became free for all. By the time a Japanese LNG was ransomed for $1,000,000, the Somalis had become real pirates. Only problem with this version of the facts is that even the Ancient Egyptians in 1400 BC who sent an expedition to Punt noted that the folks around there were already known to be notorious pirates and that the area was best avoided...

The Islamist insurgency is another story. Al Shabaab (translates as the youth) began a few years ago as a breakaway faction from the Islamic Courts Union that took control of Somalia briefly in 2006 (here we see a parade of sorts for the press - Shabaab is rather news media savvy). Somalia has been without an effective national government since the early 1990s. When Ethiopian troops invaded Somalia and ran the ICU out of power, the irredentists went to ground and created an even more hostile and violent movement (you might want to compare this to the latest generation of Taliban in Afghanistan - in some ways even more dangerous than the original version). In the past couple of years, Shabaab leaders have publicly negotiated with al Qaeda and been inducted formally into the network. The Shabaab have had an uneasy relationship with Somali pirates: on the one hand, they publicly condemn their life of crime, drinking, whoring and listening to music, while on the other hand, they have charged Somali pirates wharfage fees (in ports Shabaab has held like Kismayo, only recently liberated by the Kenyan military, that has its own plans for the region) and then even taxed pirate ransoms about 20% to 30%. Pirates really don't trust the Shabaab and fear getting tarred as terrorists, which they are not - pirates have been getting more than enough unwaned attention from the navies. Some pirates have even moved north into Puntland so as to avoid paying Shabaab taxes and harassment.

Somali refugees in a camp in
Kenya. Average annual income in Somalia is about $500 a year. The lowliest pirate can earn more in one year of piracy than in a lifetime of honest work. An undeclared civil war has been raging for 20 years. Some refugee camps are the size of a city - one hosts over 300,000 - and the people in it are NOT returning home in response to the latest game of political musical chairs. The camps know little or no order. Women face gang rape by marauding gangs of young men - a raped woman in Somali society is considered despicable - Islamists have even stoned young women for being raped. Food aid is regularly hijacked by warlords who sell it on the black market to fund arms and luxuries. Refugee boys are forcibly taken away by al Shabaab or TFG recruiters and made to carry a gun and kill other boy soldiers. Compared to this, being a pirate is a much better proposition: it's low risk & high payout. Some pirates have even retired and set up a legitimate business and spread the wealth to extended family and clan - while the majority blow their pay on whores, khat (a chewable narcotic leaf), whiskey and other luxuries. Increasingly, Somalia's economy centers on piracy, as everyone scrambles to grab a sliver of the new wealth.

The main tool used by Somalis to hunt for prize is the humble fisherman's skiff - usually a 24 foot, flat-bottomed boat, with 3 foot high sides, usually powered by a couple of outboard motors. Used by fishermen to drop and drag nets, the skiffs can carry up to a dozen pirates armed with AK-47s and RPGs. The average skiff can make approaches on a target vessel at up 25 knots, but requires calm seas - a chop of more than 5 feet can easily flood and capsize the craft. That's why studying wind and wave is so important in predicting Somali pirate activity.

In response to growing attacks against navigation in the Gulf of Aden, India dispatched a Talwar-class frigate, the Tabar (seen here). She began her patrols in early November 2008. She successfully escorted scores of ships and foiled numerous Somali pirate attacks. Her initiative earned the praise of piracy experts who expressed the hope that her example would be followed by other navies. The Tabar became entangled in controversy when she was fired upon while stopping a Thai trawler: before Indian sailors could inspect the fishing boat, Somali pirates having just hijacked the Thai boat opened fire on the Tabar. She returned fire in a prolonged firefight that led to fire erupting on the fishing boat. Most of the crew would be lost at sea, while the pirates escaped in a speedboat. The Tabar clearly had the right to defend herself, but the loss of hostages' lives did cloud her prevailing over the pirates. Nevertheless, a few weeks later, her example was followed as other warships started streaming into the region, in response in general to the rising number of attacks and in particular to the hijacking of the MV Faina that carried Soviet era tanks and the hijacking of the MV Sirius Star that carried 2 million barrels of oil destined for the USA.

This is the way ships first attempted to defend themselves from Somali pirates - at least circa 2008 - with fire hoses. This ship, the MV Biscaglia, deployed all of its fire hoses in a desperate attempt to intimidate pirates - the idea being that the water would flood the flimsy skiff and send them to the bottom. That didn't work in this case. The Biscaglia also had a noise gun that was supposed to make it too painful for pirates to keep approaching. That didn't work either. The unarmed British security team operating the noise gun was unable to repel the pirates by other means - and so the pirates boarded the ship and took control of the bridge. The unarmed team was trapped on the roof of the super structure and eventually jumped overboard and swam to safety - a military helicopter scooped them up. The crew and ship weren't as lucky - the Somalis took them both home.

The crew of the Chinese Zhenhua 4 showed uncommon bravery and resourcefulness when it improvised anti-piracy defenses to protect itself while transiting the Gulf of Aden. It used Molotov cocktails, beer bottles and water cannons to defend themselves against Somali pirates who boarded the ship in December of 2008 (here we see one of the crew members lighting one of the firebombs). Nine pirates armed with rocket launchers and AK-47s forced the 30 multinational crew members to lock themselves in their accommodation area. No injuries or deaths were reported. The ordeal ended with the arrival of military helicopters and a warship despatched by the task force fighting the piracy menace in the region. The intrepid defense of their ship earned the crew praiseworthy headlines back home and they were welcomed as heroes when they regained China.

China joined the multinational naval effort to combat Somali piracy the same month. This was a historic and risky move for China - no Chinese naval vessels had operated so far from home since the expeditions of the famous Chinese Admiral Zheng He who explored the Indian Ocean and even visited Somalia over 500 years ago.  Destroyers Wuhan, Haikou and Supply ship Weishanhu of the South China Sea Fleet sailed out on December 26, 2008 from China's Hainan island and commenced escort operations off Somalia from January 06, 2009. Destroyer Shenzhen (the mission's flagship, pictured here) and Frigate Huangshan sailed out on April 02 from China to relieve destroyers Wuhan and Haikou and commenced operations from April 16. Guided missile frigates Zhoushan and Xuzhou sailed on July 17 to relieve destroyer Shenzhen and frigate Huangshan, while supply ship Qiandaohu was deployed to relieve Weishanhu. They commenced operations from August 01. Since then, China has sent many more navy ships, which have escorted hundreds of merchant vessels, and tendered assistance not just to mainland ships, as well as Taiwanese and Hong Kong, but also to non-Chinese vessels in distress. The PLA Navy and Western navies have gained valuable experience through close cooperation in fighting Somali piracy.

This is the second generation - a fibreglass whaler - shorter and stubbier, but able to carry enough armed men - five here in this case - one carrying the RPG for intimidation. The others likely armed with AK-47 assault rifles. And armed even with an aluminum ladder to make boarding easier. Note the amateurish blue paint job on the hull, meant to make the attack boat less noticeable as it sneaks up. One engine and 5 guys tells us that this is group that can afford a better boat but is not yet in the major leagues.

The revolutionary step taken by Somali pirates in or around 2009 was to marry the attack skiff to a larger fishing boat. The dhow, a traditional form of long distance fishing boat that has been used in the region for thousands of years, can tow a couple of attack boats further out to sea than where any small boat by itself ever could go, because of the wind and wave. The larger fishing boat can also carry more fuel and supplies for longer hunting missions. In this way, Somalis were able to break out from the Gulf of Aden and avoid the growing warship presence and begin threatening the waters off of Oman, western India and even the Maldives. This dhow is being stopped by a naval patrol, and is towing a whaler, a shorter fibreglass boat that Somali pirates equally like. Note the blue paint job given the whaler, so she can sneak up on her prey - and we don't mean fish in the ocean.

The real prize these days for
Somali pirates is crew on merchant vessels - Somali piracy has increasingly become an industrial
form of maritime kidnaping. This is the crew of the MV Faina, paraded on deck in 2008. The
captain of the MV Faina died of an untreated heart condition soon after his kidnaping. Average
length of captivity by mid 2011 had grown to 150 to 210 days, up from only 45 to 60 days in
2008 - it is longer still in 2012. Pirates hold crews longer and mistreat them more so as to extract
larger ransoms. In the past 2 years, average ransoms have doubled, even tripled. Getting exact
figures on ransoms is very hard - more often it's the pirates who announce the amounts, for
bragging rights over their competitors. Additionally, al Shabaab, the Islamist insurgent group that
controls much of southern Somalia, is applying a tax of  5% to 20% on ransoms collected by
pirate gangs operating out of areas it controls, including especially Kismayo in the South.

A Somali pirate poses
dramatically in front of a hijacked ship. The real threat for him comes not from foreign navies or
local authorities, but more from other gangs preferring to hijack ships from rival pirates. Modern
Somali piracy is a low risk, high payout deal - and so won't be gotten rid of, even if the current
crop of pirates is imprisoned or lost at sea or even killed in action. A new crop will just take their
place. To succeed, any global anti-piracy strategy must understand how and why Somalis
conduct piracy - it must attrit the business model of the most successful pirate entrepreneurs
first, and then slowly roll back pirates to raiding closer to Somalia.

Even after they've been
freed by pirates, the ordeal still is often not over for the crew. Getting back home can be a
challenge. These men are from the Samho Dream, a South Korean VLCC. After an arduous
captivity in Somalia, they were stranded in Dubai by the owner after it filed for bankruptcy. They
weren't paid for months. Only the charity of others assured their food and shelter. The ship ran
out of fuel and so the AC, lights and clean water failed. They eventually abandoned ship and
some finally flew home - while others remained in Dubai. So even freed foreign crewmen can
become as forgotten as the hundreds of thousands of Somalis in refugee camps and the hundreds
of seafarers still held hostage.

Just when one would think
things couldn't get worse for Somalia, a long drought was declared in 2011 - it led to the worst famine in 20 years. This woman waits patiently in line for food at an aid camp - she's lucky though because the UN and aid organizations have managed to focus public attention on the misery - the world's press is slowly coming back to report on the world's worst natural and human catastrophe. Shabaab's mismanagement of the territories under its control only worsened the food shortage. Pirates are perversely profiting, as the famine only increases the desperation of Somali youths and makes them even more ready to join a gang, if only to escape the misery. So drought and famine are conspiring with predatory humans to drive Somalis to do desperate things to stay alive.

In 2011, the foreign navies amassed around the Horn of Africa and NW Indian Ocean moved away from playing a losing game of catch-up against Somali pirates and went instead to a game of offensive defense. Meaning that surveillance was increased, and suspiciously acting dhows towing skiffs, as well as other odd behavior by fishing boats was tracked and in the most glaring cases a warship was sent to go inspect. In this case we see a dhow towing a skiff that's been stopped by a USN warship - a team is moving towards the dhow, while the cameraman sits in a helicopter that likely carries a marksman with a large caliber sniper rifle who is providing cover for the inspection team. This new strategy by the navies has been one of the main reasons - along with greater numbers of merchant vessels respecting BMP4 and more armed guards on board ships - Somali pirates have had to change their game and get a lot craftier.

Those Somali pirates who didn't change their game either died at sea from running out of fuel, food and/or water, or if they were lucky, got picked up by a friendly warship. The EU Navfor are known to have better concierge services for pirates - and then either deliver them home after nice meals and medical treatment, OR hand over the especially nasty pirates to be in courtrooms built with the grudging cooperation of regional nations hard up for foreign assistance. Kenya has engaged in this game and has tried Somali pirates - on and off, as it suits its whims - for a few years now. These poor Somalis are wearing the universally recognized orange garb and glumly going off to trial. It could be worse - they could be in India, which is a lot tougher on pirates.

This image is just to put
all the happy talk on land in Somalia lately into sobering perspective. The highly publicized theatrics in Mogadishu in August of 2012 surrounding the establishment of a new, almost entirely self-selected regime of largely the same avaricious people who've mismanaged Somalia for years, but who've been peddled to the press by foreign donor states as a new and democratically elected national state to replace the utterly corrupt and incompetent TFG - that has held onto clumps of downtown Mogadishu only thanks to almost 20,000 foreign donor-funded troops from other African states - is highly unlikely to put an end to either Shabaab or the pirates. Nothing is going to be fixed through such cynical Potemkin Village tactics. This street in Mogadishu was photographed in late 2011 after Shabaab made a tactical retreat - so as to spare itself being on the back foot in ranged battles with AMISOM forces and fought according to conventional principles of warfare. Now Shabaab uses unconventional combat principles against AMISOM and the TFG in Mogadishu - as well as against Kenyans in the south. Car bombs, ambushes with RPGs, suicide bomber attacks - Shabaab has changed the game back to its natural advantage - terrorism, which the foreign fighters from al Qaeda are expert in. Meanwhile, the civilian population huddles in makeshift shelters and dodges bullets and shrapnel. This is the real situation - and is nothing to celebrate about. Misery continues to feed the ranks of desperate young men ready to try their hand at piracy.

While average Somalis are starving, and are seeing their men murdered in senseless combats, their women raped by gangs in refugee camps, and their kids forcibly recruited to fight a civil war between the fanatical Shabaab and the corrupt TFG, Somali pirates have been doing well - thanks for asking.  Remember that lowly skiff we were telling you about? Well, some of the more successful pirates have moved up to the ultra fast rigid inflatables with four outboard engines - something that would give even a special forces fast boat a run for its money in any chase. Unfortunately for these rich and ambitious pirates, such a fast boat sticks out like a sore thumb amongst the miserable local fishing boats. So these poor guys raised suspicions immediately - and maybe also forgot that military fast attack helicopters can still fly faster than their new boats can skim the waves.

Two Italian marines were arrested in February 2012 by authorities in Kerala, India when local fishermen were fired on and killed just outside territorial waters. It's still not settled whether the Italians were indeed the people who shot the fishermen - they insist that the small boat that approached them is not the same boat as the fishermen's. Italy is also insisting that India does not have jurisdiction, and that any wrongdoing by its Marines has to be adjudicated back in Italy. While the authorities in Kerala insist that the killing of an Indian even outside the territorial waters of India by itself gives them jurisdiction. This case is still working its way through the Indian courts and painfully slowly at that, but the chilling effect on armed guards, both active duty military and private, has been significant and swift. We suspect that piracy incidents are being under reported in large part because guards are afraid of being accused of mistaking fishermen who fail to heed warnings to back off for pirates and for shooting them. That 2 Italian Marines can be held for murder by a coastal state has to make any reasonable private armed guard and ship master worry how much more harshly they would be treated if arrested for murder themselves, and not be protected by their being military men in service and having the chain of command skip the ship master.

Armed guards onboard merchant vessels have in modern times been frowned upon by ship crews, shippers, shipowners, underwriters and naval personnel - they had been judged to be more trouble than good. But given the inability of modern maritime nations to deal with the growing Somali pirate threat by simply sending more warships - by one account the warships of all the top navies could be employed to patrol the NW Indian Ocean and still much of it would be left unpatrolled - shipowners concluded that desperate times required desperate measures - and so began hiring armed guards in earnest in 2010 - by late 2011 it became a scramble. Overall, their record in preventing Somali pirates from taking a ship has been successful - and some insurance brokers have even found ways for shipowners to get a break on their insurance by hiring armed guards.

The surge in the use of armed guards means that people are being hired without sufficient background checks. Over 200 private maritime security firms are now competing for contracts from shipowners - compare this with a world where for many years 20 or so firms constituted the bulk of the industry. There is much discussion behind the scenes - especially among those 20 firms - about how unprofessional the new firms are, because of lax hiring practices, lack of sufficient training, little or no insurance to protect themselves or third parties, and a willingness to work for peanuts. One incident got a lot of security professionals talking - a video of some mysterious armed guard team unloading hundreds of bullets at practically point blank range on Somali pirates who were allowed to approach a merchant vessel way too closely - the withering barrage of bullets did not stop the pirates - in fact they slammed into the ship.

[ Above YOUTUBE video can be played by clicking here. ]

Not by coincidence, the latest trend out on the water is the growing number of innocent fishermen being mistaken by armed guards (be they private sector or active duty military), for attacking pirates or terrorists. Off India in February and then off the UAE in July Indian fishermen were shot and killed by guards protecting in one case a merchant vessel and in another case a ship supporting warships. Other cases of mistaken identity, inadequate warning off, and excessive use of force against innocent boats failing to turn back are all too common. The fishermen in the foreground here (in waters off Oman) might have been putting their lives at risk by approaching the merchant vessel in the background. As long as armed guards are not given better guidance about rules of engagement, graduated responses and the use of lethal force, they present risks not just to innocent parties that approach too closely a merchant vessel, but also to crewmen onboard, as well as shippers and owners who potentially face unquantifiable liability if and when armed guards fail to warn adequately and in time and then shoot and kill in error. IMO in May 2012 asked ISO to develop standards for the use of private armed guards, but this effort alone will not suffice - while the transport and use of firearms by armed guards also needs more uniform regulation, lest they be charged with arms smuggling and trafficking.

In addition to warships, fixed wing and rotor wing aircraft have played a growing role in allowing the foreign military forces converged on the Gulf of Aden and the NW Indian Ocean to spot pirates before they cause trouble. The P-3 Orion, flying out of the French military base in Djibouti, has become the workhorse of anti-piracy patrol.  Suspected pirate motherships - usually fishing dhows - are sought out from high above and warnings given to shipping to avoid the boats, and in some cases, if and when possible, warships are vectored towards the dhow so as to inspect them and disarm pirates if suspicions prove right.

Unmanned aerial vehicles, also known as

The news from end of August 2012 that pirates holding the MV Orna had lost patience with the owner and executed shocked many but did not surprise everyone. The MV Orna has been held for about 2 years and in August the owner was supposed to make a payment of just over $1 million US. When that payment failed to show up, the pirates lost patience and decided to show their displeasure - a Syrian crewmember was executed and a crewmate of his was wounded. If the owner decides to come back to the negotiation table and makes a payment, this brutal maneuver will have succeeded - and not only will the gang holding the MV Orna be tempted to use it again, more importantly, other gangs holding ships for a year or more will likely be tempted to employ it. Pirates holding ships for long periods - which are now anything over 6 to 8 months on average - have a lot of debts to pay to people who've provided lodgings, food, khat, alcohol, whores and everything else that a small pirate army needs to hold a ship and her crew. With the hunting of new ships being a lot tougher these days, pirates were already squeezing owners harder to extract more out of shipowners - last year, 2011, saw the pirates double their ransoms to about $160 million US compared to the year before, BUT they did so after hijacking only half as many ships. That pirates in 2012 are seeking to monetize the problem ships they are still holding is not surprising - although the cold blooded execution of a hostage is still shocking. This development in one Somali pirate gang's business model is one that we don't welcome, but which may spread quickly across most of the Somali pirate gangs.

In a recent visit to the pirate port of Hobyo and other pirate ports north of Mogadishu but west of Puntland, a news team with the Associated Press snapped a picture of this Taiwanese trawler, now beached and abandonned after its crew was ransomed after lengthy negotiations. The journalists were able to come back with this picture only because the clan elder wanted the journalists to report that they had piracy under control. Otherwise a pirate gang would surely have kidnaped the journalists and held them for ransom. The message intended for the outside world we must surmise is meant to position Hobyo and other pirate ports to get foreign aid that is now almost exclusively focused on Mogadishu. This visit to Hobyo resulted in very little reporting about why pirate attacks had dropped off, other than to note almost in passing that credit had dried up for new missions. This was actually the real nugget from the trip. Up until now, Somali pirates have paid back investors, creditors, pirate chief and their hands, and then looked to lenders for the capital needed to launch the next mission. When credit started to dry up in the past few months for many reasons, the missions became rarer. This is not an irreversible situation, and so we would not be surprised to see in the near or not so distant future a return of more attacks. The pirates are down but by no means out.

This Somali callgirl, also snapped by the AP team, reflects the problem of credit for pirates: no one is offering it to them. Not investors in pirate missions, not dealers in cars, whiskey or drugs, and not this callgirl. Her services she insists cost $1000 a night and she will only take cash. She may have been posturing a bit for the reporters, so as to use them to send word around town that she's not lowering her price and that she's worth every penny. But right now, we doubt she'll get many takers. Tea in Hobyo, which cost 50 cents a cup at the height of piracy in 2011, has drifted back down to just a nickle. So do the math on the callgirl. Everyone profits from piracy - from the callgirls, to the 4 wheel drive dealers, to the whiskey salesman and the khat merchant - as well as the clan elders who get their cut. Not to mention most importantly Somali young men who can make $10,000 to $15,000 in one successful mission. Compare that to making $600 a year on average otherwise. As long as so many people can benefit directly and indirectly from piracy through the monies it brings into the local economy, we believe that the threat will remain with us, ready to flair up as soon as lenders decide to front the pirates some money and send them off to sea again.

The news from Somalia is increasingly incredible - as in hard to believe. No one less than the father of modern Somali maritime piracy, Mohamed Abdi Hassan, AKA Afweyne (Somali for Big Mouth) staged a press conference in early January to announce his retirement. We would like to take him at his word, but even if he is being honest, there are a few minor legal details remaining. Such as the need to investigate and prosecute the boss of the gang that hijacked the MV Faina and MV Sirius Star, for starters. His gang hijacked many other high profile ships. And if the new Somali government won't do the job, we trust there are foreign states that will step in and get justice for the shipowners, seafarers, and their families.  The local administration of Adado may take the credit for having Afweyne retire, but they don't have the legal authority to shield the legendary pirate boss from paying for his crimes at the national and international levels.

Somali pirates remain active, even though reported incidents are down sharply since mid-2102. Part of that is due to under-reporting of piracy both by armed guards protecting merchant vessels (when they use their weapons to warn off suspicious boats, they increasingly opt not to report the incident, so as to avoid any potential liability), as well as by shipowners (who in the hypercompetive market where too many ships are chasing too few charters, fear having news of one of their ships being targeted by pirates lead to potential or actual clients to shun them). Here we see a French military man operating a machinegun from a helicopter on patrol over sea lanes near Somalia. The continued presence of warships, helicopters and even unmanned reconnaissance aerial vehicles is needed.

Despite all the encouraging news from Mogadishu since late 2012, al Shabaab, the al Aqaeda-affiliated Islamist insurgent group has not put down it arms. As it's been pushed out of major cities and towns, it has moved from conventional combat over to terrorist attacks and asssasinations. Here we see the authorities responding to an especially heinous and bloody attack on a courthouse, which involved almost a dozen attackers and which cost the lives of at least 20 innocent people.

The private maritime security industry's response to the Somali piracy threat is constantly evolving. In 2009 and 2010, most shipowners were looking for protection from the navies converging on the Gulf of Aden after the spike in piracy in 2008. Insurers were very opposed to merchant vessels carrying private armed guards to protect against pirate attack. A first attempt at providing armed escorts - engineered by the firm Blackwater - failed miserably. By early 2011, attitudes started changing: as shipowners saw pirates growing in numbers faster than the navies could keep up, they reconsidered and started hiring private armed guards to ride on ships. Companies were also formed to provide armed convoy escorts but while shipowners were ready to employ guards on their ships, they still preferred to have navies do the escorting - because they liked the price - as in, free. One company retnted the services of the Yemeni coast guard and had the CG patrol boats accompany vessels through Yemeni waters, proving at least that the escort concept was sound. Another company created even greater expectations but kept failing to raise funds and missing launch targets. It didn't really matter at the time, as navies were more than available to protect most vessels. In 2012, though, the Somali pirate threat stopped growing and even started shrinking. At the same time, states paying for the naval patrols started facing serious budgetary pressures: the Eurozone crisis intervened and Greece had to withdraw from the EU military effort off Somalia. It became obvious that it wouldn't take forever for some navies to declare victory over piracy and go home. Shipowners were also finding that the cost of private security, even cross-subsidized by insurers (who had changed their minds about armed guards on ships), was increasingly less tolerable, even though it was effective - shipowners were growing more cost-conscious as the shipping market stagnated and earnings flattened. In early 2013, a third private convoy escort company, known as Typhon, came to the fore. Its first ship will be a converted feeder container, pictured here. If navies draw down their presence in the NW IOR and Gulf of Aden, that may make shipowners think again about private escort ships. A new private security business model where vessels carry less than 4 private armed guards but are accompanied by an escort ship with its own fast patrol boats might be more cost-effective than the present 4 man embarked security team model and also become cross-subsidized by insurance. If so, the new model might eventually be exported to protecting ships in the Gulf of Guinea.



Another unintended consequence of the ridding of the Gulf of Aden of many pirates has been the driving of the especially more persistent and hardier of the species to choke points like the Bab el Mandeb and the Strait of Hormuz (not to mention the Mozambique Channel as well as the Minicoy passages). Somali pirates already migrated in 2011 to waters just SE of the Omani port of Salalah and created a new hotspot there - attacking ships slowing down to form convoys just to the East of the entrance of the IRTC protected corridor in the Gulf of Aden. When pressure was applied there, some pirates moved even more to the NE - and began raiding just South of the Strait of Hormuz. The choke point sees about 12,000 tanker transits a year, and other than the Strain of Malacca, is one of the most important narrows that energy shipments to the world in general, and the Far East in particular, have to navigate. Add heightened tensions between the West and Iran, and the Straits look to be a new area for mischievous maritime hijinks.



Meanwhile, on the other side of the African continent, the long simmering insurrection in the Niger Delta, momentarily suppressed by an amnesty that included massive bribery and attempts at coopting warlords, is coming back to a boil. Some of the natives of the oil-rich Niger Delta, who still feel left out of all the oil wealth monopolized by national authorities in Abuja, are exporting their skills at bunkering - read, stealing crude oil - by hunting for tankers scores of miles off the Nigerian coastline, if not even off the shores of neighboring countries. The black market for oil is so big in West Africa, and has so many takers among the ruling political, military and business elites, it is unlikely piracy of oil in the Gulf of Guinea will be rolled back up any time soon.


For those who wonder why someone just doesn't go into the Niger Delta and find the pirates, free the hostages, and shut down the gangs, this picture show explain a lot. Simply put, the Niger Delta presents an almost infinite number of hiding places. And not only does the Nigerian government lack the resources to patrol all the nooks and crannies of the Delta, also, even if other nations were to send a good portion of their respective navies, the Niger Delta would still not give up most of its secrets.


The Gulf of Guinea includes African states from Angola to Senegal - and Nigeria sits more or less in the middle of the long coastline. And as Nigeria's navy has attempted to repress piracy off the Niger Delta, it's unfortunately only spread the problem to its neighbors, up and down the coastline. In 2012, reported acts of piracy in the Gulf of Guinea more than doubled - and we suspect that the under reporting rate is so bad that the incidents that are known might only constitute 10% of the total acts of piracy up and down the coast - as well as now deeper into the high seas. And we don't reporting improving, or the number of attacks not growing into the foreseeable future.

Just to the north and inland of the pirates in the Gulf of Guinea, just like to the south and inland of the pirates in the Gulf of Aden, we find an Islamist insurgency that is funded and led by foreign interests - al Qaeda being shorthand for such. In Mali, the local forces of Islamist fundamentalism attempted to take over the remaining southern parts of the country in rapid succession, but France stepped in and not only stopped their progress, it sent them back north packing. At the same time, the UK embassies in Libya, Somaliland and Kenya began warning its citizens to leave Somaliland and the border lands between Somalia and Kenya, after receiving actionable intel that Islamists were looking to kidnap Britons. This we can only attribute to the UK's assisting France in her efforts to protect Mali. What's worrisome is that the Kenyan move into southern Somalia around Kismayo may have denied the port and the adjacent lands of Juba to the Shabaab, but then many of its militants seem to have moved north into the border lands with Puntland and Somaliland. Lands that the regime in Mogadishu can't possibly yet patrol and assure law and order in. And many displaced Somali pirates are also there. Query as to how all this will play out? Will the fight with Somali piracy and Somali Islamist terrorism become one in the same? Have Western powers inadvertently pushed the two groups, not naturally suited to work together, into an alliance against the West? In any case, France needs to keep it up in Mali - and with the UK's help.



So far, in S.E. Asia, piracy has been brought back down to manageable levels - in part, thanks to the increased efforts of countries like Malaysia and Indonesia in repressing piracy in the Strait of Malacca, and in part also due to the Boxing Day tsunami of 2004 that hit pirates as hard as fishermen all through the region. We are on the look out though for any copycatting by locals of the successes of the Somali pirates, and namely copying of the maritime kidnaping model that has paid off so well.


This map shows at least three areas of concern for those alert to maritime risks. The East China Sea where China and Japan dispute strategically located islands and the resources they can claim if they retain control of the islands, the South China Sea where China and her neighbors to the south all have competing claims to the resources of the sea, including especially energy;  and then the Strait of Malacca and the waters around Malayasia, Singapore and Indonesia where SE Asian piracy has waxed and waned. Maritime risks in Asia are not to be underestimated, if only because over 60% of merchant marine tonnage is owned by Asians, while China and her neighbors are engaged in high stakes claim and counter-claim to resources needed to fuel their economies. Any one of the three risks by itself would be enough negatively to impact economic growth in the area.

This map for example underlines the importance of free navigation in the South China Sea. It shows just how much Liquid Natural Gas transits the SCS as it travels to China, South Korea and Japan. Having conflicts going on between states making competing claims in the region will make such transits riskier, as states may claim they are transiting national waters. For example, China claims vast tracks of the SCS going many hundreds of miles south from Hainan. Its claims include the Paracels as well as the Spratlies, both visible on this graphic.


Maritime risks are not limited to even the growing spread of modern maritime piracy: they also include for example tensions between nation states like China and Japan over islands that can lead to fears of war. The islands that China calls the Diaoyus and which Japan calls the Senkaku are uninhabited but have been visited for centuries by fishermen, mostly from Taiwan. The islands were captured by the US in WWII and then handed over to Japan in the 1970s. When the islands were sold by a private Japanese owner, the Japanese national government rushed to buy them so as to prevent a right-wing politician from buying them. That didn't preempt a rise in tensions with China, though, as in late 2012 there were many violent protests in China against the Japanese move. Japan and China are now sending ships and aircraft to patrol the islands so as to reaffirm their respective claims and to intimidate the other side into stepping back. There have already been impacts on the maritime industry: the fledging Asia cruiseship industry has suffered as routes have been avoided and clients lost because of nationalist fervor. It could could get worse: just like Hormuz might be closed if tensions boil over and the US and its allies face off militarily with Iran, the closure of a major part of the East China Sea could lead to serious interruptions in maritime commerce. Add to this tensions between China and her neighbors to the south in the South China Sea and it's not just pirates in SE Asia around Malacca who can impact maritime commerce.

The islands in dispute - called Diaoyus by the Chinese and Senkakus by the Japanese - are strategically located between Taiwan and the Japanese island of Okinawa. The islands were taken from the Japanese by the US at the end of WWII and all were handed over to Japan in the 1970s. The problem now is that with the UN Convention on the Law of the Sea, the islands allow the nation that claims them 200NM of exclusive economic zone around them - and in this case may include as yet undiscovered but suspected natural gas and oil fields. So this is not just a matter of national prestige at stake, but also of potentially enormous reserves of energy that both China and Japan hungrily covet.

Fishing boats from Japan, Taiwan and mainland China regularly visit the waters surrounding the disputed, in an effort to underline their respective home country's claim on the islands and their waters. Here we see a complex skirmish between numerous fishing boats, and almost as many maritime patrol boats (this is most likely Chinese fishing boats being herded by Japanese patrol boats).

The game of tit for tat is fast becoming a game of chicken between the navies of Japan and China, as well as their respective air forces. While Beijing and Japan's leaders talk publicly and privately about the need to have some sort of top level diplomatic summit, back around the islands, ships and planes are probing the other nation's responses. There is worried talk now from even military experts that this game could quickly spin out of control and result in both countries stumbling into war.



The Suez Canal is also subject to new risks, as social instability shakes the foundations of the new Egypt post-Mubarak. On the second anniversary of the uprising against the former president, Egyptians took to the streets and protests turned violent. Scores of people were killed or injured in Port Said alone in just a couple of days. The new president declared a state of emergency for the towns involved, that all just happened to be along the Suez Canal. The military took over control of the Canal and sought to reassure the world that there was nothing to fear. But there was: if not social protests spreading out of control, then terrorist attacks originating from inside the country and seeking to deny the regime the country's most important source of foreign exchange. Or terrorist attacks from outside Egypt: including threats from Islamists in eastern Libya who are armed to the teeth with weapons raided from the old Libyan military stocks. Foreign terrorists may be interested in denying the US and other navies the ability to transit rapidly from the Med to the Arabian Sea. And if the Suez Canal is closed either because of riots or terrorism, then there will be no choice but to swing around Africa the old fashioned way: namely, around the Cape. Tankers, bulkers, container ships - it'll add many miles and days to their transits. And it also might deliver new prizes for pirates of East and West Africa to raid and hijack.

This map shows the 2 ways to get from Mumbai to London: either via the Suez Canal or the Cape - the Canal shaves over 5000 miles off the trip, which means hundreds of thousands of dollars in fuel and about 2 week in transit time. The Canal is not that much of a savings in fuel costs today, as the fees have been rising fast. With the announcement that fees are to go up another 5% this May, after they went up 3% last year, the International Chamber of Shipping is protesting loudly and warning that ships may avoid the higher fees as well as the increased secuirty risks, and slow steam around the Cape.

Despite talk of the Egyptian opposition resolving its issues with the government in Cairo peacefully, street protests have continued across Egypt, and not just in the Suez Canal zone. Here we see protests that degenerated again into violence, and this in front of the Presidential Palace. News that the Emma Maersk, the world's largest container ship, suffered mechanical problems and started taking water on in her engine room right after she entered the Suez Canal and was struggling not to sink and block the channel were met with alarm and suspicion. A tweet was issued claiming it was not sabotage. But the global shipping community will remain on edge as long as unrest reigns in Egypt and added security measures are needed to assure the security of the Suez Canal.

A few centuries ago, when Portugal was ahead of the game in exploring and exploiting Asia by maritime adventure, a Portuguese trader and wag commented that he who controls Malacca has his hands on the throat of Venice. That, when the Venitian Republic was losing its dominance gained by controlling the ground-based, so-called Silk Route. Today, the reverse might be more true, especially how in the past 50 years, the world's manufacturing and merchant marine center of gravity has shifted to the Far East. Places like Singapore, Hong Kong, and other leading trading centers are the Venitian Republic of yesteryear, and the control that allows one to put ones hand on their throat is control of the Suez Canal

This is the port of Ningbo, the second busiest port in mainland China, after Shanghai. Ningbo and other major ports in Asia may find that the Suez Canal is no longer worth the speed and convenience if transit fees keep climbing, and if insecurity and uncertainty keep growing, thanks to the civil unrest. The Cape route may become a just as good option for East Asian importers and exporters. If so, the reversal of the Portuguese wag's comment about Malacca and Venice may not be 100% true.

This map shows the 2 ways to get from South Korea to London: either via the Suez Canal or the new Arctic sea passage. The Artic shaves a few thousand miles off the trip, which means hundreds of thousands of dollars in fuel and another week or two in transit time. The Arctic passage has been becoming a reality over the past decade, at least for the summer months. Yet even if the ice shield has broken up in the summer, a chunk of ice the size of an office desk can still do a lot of damage to the standard 3/8ths steel plate on a modern merchant vessel's hull.

This shows fresh rioting in Egypt as of June 2013. The first anniversary of the Morsi regime is triggering protests across the country, while the military insists that chaos will not be tolerated, and the Suez Canal will stay open. International shippers are starting to doubt that. And as the social unrest spreads, the pressure builds on Cairo to raise the fees for transiting the Canal, which is the last major source of foreign exchange for the regime. As time goes on, the Canal will become a riskier as well as more expensive proposition.


This is the view you'd see if you were coming in to land on the USS Truman (except the flight deck would be clear). This view won't be seen in the Persian Gulf or Arabian Sea any time soon, because the Pentagon has announced that due the looming probability that Congress won't agree on how to reduce spending,


The cuts in the budget of the US Navy haven't prevented it from deploying the first of 4 Littoral Combat Ships to Singapore. Here we see the USS Freedom, the first in its class of single hulled LCS, leaving Hawaii for its new mission. The new warship will be tested over 2013 and provide training to local navies.


North Korea's new leader is threatening not only South Korea as well as Japan and the US with nuclear war, even just his missile tests threaten to increase risks of navigation in the waters of East Asia.

This graphic shows the maximum ranges of the many classes of missiles that North Korea possesses. Even short of a full scale war, these missiles can pose a threat to navigation because it's unlikely that North Korea will announce ahead of time maritime and aerial closure zones, and this so as to frustrate missile defenses that might seek to shoot down the missiles.


Bangladeshi piracy has been around for decades, but in the past few years it has grown in frequency and severity. And in the past year, there have been 1000 local fishingboats captured by pirates, and 3000 fishermen kidnaped and held for ransom. 30 fishermen were killed in the Spring of 2013 after they identified the pirates and the pirates decided to leave no witnesses. Left unchecked, Bangladeshi pirates could begin to threaten foreign fishermen, and after that, maybe even foreign shipping. That is essentially how Somali piracy grew from being a persistent local piracy problem into being an accute regional threat to international navigation.


Nicaragua has awarded an exclusive contract to a Hong Kong-based company headed by a Chinese billionaire to develop new plans for an inter-oceanic canal. Here is its most likely path (see graphic). Not a few experts who were polled by the Western press on the heels of the announcement expressed skepticism about the plan's chances, but as details emerged about how the Chinese businessman is partnered with some very serious consultants in engineering, construction and infrastructure, many are giving the news a second look. The businessman claims that the new canal will be open and running by 2020. It would allow ships to transit that will not be able to transit even the new and improved Panama Canal (Panama will be able to handle boxships only up to 13, 200 TEU when the new third locks open in 2015 - while the newest class of big boxship to be delivered later in 2013 will weigh in at 18,000 TEU - so in effect, Panama will still be behind the curve).

Once the initial and mostly undeserved skepticism wore off about the capabilities and qualifications of the team assembled by the Chinese businessman, Mr. Wang Jing, countries throughout Central America and the Caribbean started considering the potential impacts of a new and larger inter-oceanic canal through Nicaragua. Panama is perhaps the most concerned, because if the new canal is built, it will attract ships away from its own canal, and thereby also revenues. The Panama Canal Authority responded to this threat by dangling the possibility of building a fourth set of locks, such that ships bigger than 12,000 or 13,200 TEU could transit through Panama. This may be too little, too late, though, because the Nicaraguan canal might already be built by the time Panama begins building the 4th set of locks, if Panama ever builds them: Mr. Wang now plans to have his canal open by 2020. The Central American division of Maersk has already welcomed plans for the new canal in Nicaragua, given that its fleet already has ships that will be too big to use the Panama Canal even once the 3rd set of locks are open sometime in 2015. The failure to think big when designing the 3rd set of locks back in the last decade is what made the Panama Canal vulnerable to competition and what makes the Nicaraguan Canal so attractive to many.

While the Panama Canal was upgraded with accommodating the newer and larger container ships in mind, the Nicaragua Canal was justified more to accommodate the newer and larger LNG ships that will be developed and used to move LNG from North America to East Asia. The very large price differentials between 1,000,000 BTU of natural gas between North America, Western Europe and East Asia - $3 v. $9 v. $19 as of end of 2013 - mean that savings for Asia from getting LNG from the US and Canaa will help amortize the building of the Nicaragua canal very rapidly. Add to that lower shipping costs by sending LNG to Asia via a VLGC - for Very Large Gas Carrier - if not even a ULGC - Ultra Large Gas Carrier - and the arbitrage potential will be even greater (currently shipping 1,000,000 BTU of LNG costs about $5 by sea - the larger carriers will reduce that)  .

No one can claim that Mr. Wang doesn't think big - here he enjoys giving an interview from his head office in Beijing. He is in a good mood because his project is moving forward. And if and when (or as he might correct us and say - when, by 2020) the Nicaraguan Canal opens, it will rival not only the Panama Canal, but also be able to serve the world as not only a complement to the Suez Canal, but also a substitute in case continuing social, economic and security troubles in Egypt make transiting the Suez Canal too risky as well as too costly. It will benefit not just China but the rest of the world by allowing comparatiavely shorter oceanic transits using ever larger ships.


After removing the Muslim Brotherhood President in response to massive protests in Egypt on the one year anniversary of Mr. Morsi's coming to power, Egyptian General al Sisi, Army Chief of Staff and Defense Ministre - pictured here - moved fast to put an interim civilian government in place. This has not prevented those unhappy with developments from continuing to protest. Some of the unhappy have even escalated to terrorist acts. Bombings and shootings are becoming all too common. It's reasonable to be worried about the security of the Suez Canal, and the General is signaling he will crack down on the troublemakers. Studies are now being issued that look at the costs of going around the Cape of Good Hope if the Canal is ever closed. Hopefully, that detour will never be needed, but the Canal could still remain open and still be a very risky and costly proposition. All scenarios need to be considered, and we provide guidance on such.

Pursuant to General al Sisi's call for massive peaceful protests against violence and terrorism, on Friday July 26 millions of Egyptians showed up. Here we see Tahrir square. The green lights are lasers that the demonstrators started using on June 30th. American built Apache helicopters flew over the crowd and were cheered by the crowds, who painted the copters with their lasers. Other protests later that night weren't as jovial or peaceful: pro-Morsi protestors tried moving over to a bridge and the worst violence so far occurred since the military intervened.

If the detour is needed, it might be because the Canal becomes collateral damage in the battle between the pro-Morsi and pro-military / interim government forces. After only 3 weeks in power, the new regime in Cairo was dealing with a growing number of terrorist plots, including one which involved a car bomb attack against the Suez Canal bridge, pictured here. The bridge and access roads to it have been quietly closed by the security forces. As have other crossings over the canal, as well as the tunnel under it. All vehicles using car ferries have to be searched, too. If an attack were successful, and even if the bridge were not to fall into the canal, a weakened bridge might not be found safe enough for ships to transit under. So the canal could be effectively closed for weeks if not months as the bridge were repaired. There are probably other ways the canal could get dragged into the conflict and closed despite the best efforts of Cairo. Again, we hope this won't be the case.

Confirming that the Suez Canal Bridge had ever been closed since the events of July 3, 2013 was no easy matter. First was the short published report from Asia that the bridge had been closed indefinitely because of fears of a car bomb attack. We found it odd that news full of such implication for global maritime commerce did not get any echoes. The report got no coverage in London except by our group. We then got an unpublished report confirming the bridge was closed and would remain closed. The only published report out of Egypt that we found explained that the bridge had been closed on Saturday 20 July and then reopened the 21st after a militant plot to attack it did not materialized. That was hard to believe, as the level of alertness of the military the week of the 22nd was rising as more bombings were being reported across Egypt. We worked through that week to find other sources either confirming or denying the closure. We'd eventually found a couple more sources, confirming the unpublished report. The most convincing source for some might just be this one picture, Tweeted by an intrepid Washington Post reporter who'd made her way to Northern Sinai. She snapped a picture of an Egytian Army helicopter buzzing the bridge on the 23rd and confirmed the story that the bridge was closed out of fears that someone would blow it up, and added that it had been since the removal of Morsi. Note that on the long ramp leading to the bridge, there is no car or truck traffic. The Suez Canal Authority is technically correct to say that the canal remains secure and open for transits, but it's also not letting the world know that the bridge over the canal has been closed because of fears someone wants to blow it up. If a car bomb were to damage the bridge, the question arises whether that might lead to the closing of the bridge. That is a material information that shipowners, shippers and insurers should have, and only our detective work was able to alert that they didn't have the full story.

This is the China Cosco owned Asia, a container ship flagged in Panama. The Suez Canal Authority admitted on Saturday, August 31st that she was the target of a terrorist attack while passing through the Canal. Three men were arrested for firing machine guns and a RPG at her. The SCA also reported that the purpose of the attack was to disrupt commerce. It then went on to reassure the world that all was fine with the Canal and there was no need to worry. There are still many details to come out about this incident, and we don't think it's as minor as the SCA would like the world to believe. To say that it's embarrassing to Egypt is an understatement - it also threatens Egypt's bottom line because the Canal is its last remaining major source of foreign exchange. That the Egyptian Army is deploying armored vehicles and Apache attack helicopters along the length of the Canal tells us that this could happen again. We are not surprised that such an attack did happen, as we've been noting that the security situation inside Egypt has been deteriorating rapidly since the beginning of the year. Eventually, the turmoil and unrest that has beset Egypt outside the Canal Zone we warned would eventually intrude. And so it did.

On Wednesday, September 4th, a terrorist group posted a blurry video and letter online so as to take credit for the attack on the China Cosco Asia a few days before. That the video was uploaded to the Web, and that the faces of the 2 people shooting rocket-propelled grenades at the passing ship were pixelated, would imply that the perpetrators are still at large. In their note they claim that they already attacked a ship with RPGs, and that they would attack again. They justify their act by claiming they seek to deny the canal to the commercial ships of tyrants and the warships of infidels seeking to attack other Muslims. The ease with which the attackers fired and hit the passing ship and then apparently made a successful get away may encourage copy-cats. A suicide attack involving a waterborne IED might have done more damage, but would not be as easily repeated - not just because of technical reasons, but also because suicide bombings are still unusual in Egypt. Ships transiting the Suez should maintain heightened vigilance (so as to provide as much reaction time as possible), keep their crews safely off the deck and inside (so as to preclude injury or death from shrapnel), make sure their inert gas system is working well (so as to reduce the chance of a secondary explosion), and also practice additional fire drills (so as to increase the chance of getting any ensuing fire under control as soon as possible.


In October 2013 the long awaited Tom Hanks movie Captain Phillips opened across the world. Viewers were given a rather portrayal of what that hijacking involved. Although reported incidents of piracy in the Gulf of Aden are at their lowest in years, we do know that some Somali pirates are still trying to snare a new big commercial ship - so this is not entirely not a purely historical movie - the threat is diminished but still real. We've also been consulted many times by the press from all over the world about the similarities between piracy off Somalia and piracy off Nigeria. We direct our visitors to the section below where new stories quoting us can be found - just scroll down.


In late October 2013 2 Americans - the captain and his # 2 - were kidnaped from a US-flagged offshore ship that was not far from Brass, Nigeria (the ship is seen here, abandonned in a small inland port in the Niger Delta). The kidnaping was soon claimed by the Movement for the Emancipation of the Niger Delta, which made some political demands. Later it was learned that the hostage takers were in contact with the US owner of the ship and that ransom negotiations were underway. The news sent shock waves through not just most of the world, but especially the USA, where average Americans were going to see the movie Captain Philipps - many immediately made a connection with the kidnaping of that brave American. Interest has spiked in the world press again about African piracy, but as we have explained to the record number of journalists who've asked us for our thoughts, Somali piracy and Nigeria piracy don't have that much in common, even if Nigerians are starting to kidnap sailors more. Readers of our weekly reports already have been given much useful guidance in distinguishing the two.

PBS News Hour Weekend - What does piracy off Nigeria mean for global business?

[ Above PBS NEWS HOUR WEEKEND video about "What does piracy off Nigeria mean for global business?" can be played by clicking here. ]






RETURN TO OVERVIEW



SPEECHES, COLUMNS, INTERVIEWS & QUOTES


Select public statements in person, the printed press and on radio & TV


NATIONAL DEFENSE - "Hijacked Super Tanker Exposes Vulnerability of Energy Supplies" - March 2009

Column as submitted to National Defense published in full by Yale Global Online:

YALE GLOBAL - "Hijacked Supertanker Underlines Our Energy Vulnerability" - March 2009



ROTOR & WING - "High Sea Piracy: Crisis in Aden"- June 1, 2009



AMERICAN SHIPPER - "Piracy Insurance Poised to Increase" - October 2009

Not available online to non-AS members - please contact us about getting a PDF copy.



NATIONAL DEFENSE - "Somali Piracy Tactics Evolve; Threats Could Expand Globally" - April 2010



IDGA 2ND MARITIME PIRACY SUMMIT, Presentation - "Why the latest BMPs, as well as armed guards & citadels, although effective, aren't being adopted by enough ships, because they cost too much compared to the real risks involved. Why better anti-piracy tools and solutions are needed, whereby "better" means more cost-effective, when calculated bottom-up & reflecting per ship transit real risk exposures." - Washington, DC, September 13, 2010.



NATIONAL DEFENSE - "Attack Against Oil Tanker Shows Why Terrorists and Pirates May Join Forces" - November 2010



LIFE WEEK MAGAZINE (Beijing) - "The Strait of Hormuz: a new battleground against terrorism?" - December 2010.

Not available online & in Mandarin only - please contact us about getting a copy.



LLOYD'S LIST - "Answer to piracy attack patterns is blowin' in the wind" - January 20, 2011

Not available online to non-LL members - please contact us about getting a PDF copy.

Reprinted on University of Hull Business School Website:

UNIVERSITY OF HULL - "Piracy study reveals fairweather traits - Hull University Business School" - January 2011



SUPERYACHT NEWS - "Superyachts Could be used by Pirates to Attack Cargo Ships" - February, 2011



SUPERYACHT BUSINESS - "Pirates to Target Superyacht Crews?" - April 2011

Not available online - please contact us about getting a PDF copy.



IFW - "Friday Focus: How war underwriters keep the world going round" - April 1, 2011



LLOYD'S LIST - "Indian Navy's muscular approach could drive pirates to Malacca" - April 13, 2011

Not available online to non-LL members - please contact us about getting a PDF copy.

Summarized in part on Shiptalk Website:

SHIPTALK - "Shifting Problems" - April 14, 2011



REUTERS - "Piracy spurs India coal buyers to diversify" - April 15, 2011

Available also on Yahoo Indian Finance page:

YAHOO! India Finance - "Piracy spurs India coal buyers to diversify" - April 15, 2011



BUSINESS WEEK - "The Arms Race Against the Pirates" - April 21, 2011

Available also on Yahoo main news page:

YAHOO! News - "The Arms Race Against the Pirates" - April 21, 2011



AGENCE FRANCE PRESSE - "Tension escalates as navies, pirates take off gloves " - May 1, 2011

Philippines Inquirer (above) ran full text - AFP story available also (edited) on Taipei Times print edition:

TAIPEI TIMES - "Tension as navies, pirates take off gloves " - May 2, 2011

AFP story available also (edited) in French here, here and here:

L'ESSENTIEL ONLINE - "Escalade de la violence au large de la Somalie" - 5 mai 2011


DJIBTALK.COM - "Escalade de la violence au large de la Somalie" - 5 mai 2011


CENTRE D'INFORMATION ET DE DOCUMENTATION DE L'INDE FRANCOPHONE (C.I.D.I.F) - "L'Inde, ennemi public numero un des pirates" - 6 mai 2011



BUSINESSWEEK - "From Capture to Payment in 12 Steps" - May 12, 2011



AMERICAN SHIPPER - "IMO creates standards for armed guards at sea" - 26 May 2011



REUTERS - "ANALYSIS-Vital shipping lanes can weather turmoil in Yemen" - June 3, 2011

Available also on Yahoo:

YAHOO! NEWS - "Analysis: Vital shipping lanes can weather turmoil in Yemen" - June 3, 2011



INTERNATIONAL TRANSPORTWORKERS FEDERATION - SEAFARERS SECTION 2011 Meeting, Presentation - "The Growing & Evolving Somali Pirate Threat: Where it came from, where it is today, where it's going; What can be done to slow it, stop it & turn it around; How you can make yourself safer meanwhile" - Buenos Aires, Argentina, June 13, 2011.



AMERICAN SHIPPER - "Will terrorists turn to piracy? Yemen crisis could raise piracy risk, experts say." - June 21, 2011

Needs free online registration for those who aren't already American Shipper subscribers.



IFW 40th Birthday Supplement / "Piracy" by Dr Risto Talas - June 30, 2011



REUTERS - "Exclusive - Somali Pirates Use Yemen Island as Fuel Base" - July 5, 2011

Available also on New York Times & Yahoo:

NEW YORK TIMES - "Exclusive - Somali Pirates Use Yemen Island as Fuel Base" - July 5, 2011

YAHOO! NEWS - "Exclusive - Somali Pirates Use Yemen Island as Fuel Base" - July 5, 2011



RADIO FRANCE INTERNATIONALE, interview in English - "Role of Socotra as forward logistical base in Somali piracy business model" - Paris, France, July 7, 2011.

No longer available online - please contact us about getting a copy of the WMV file.



REUTERS UK - "Piracy ransom cash ends up with Somali militants" - July 6, 2011

REUTERS AFRICA - "Piracy ransom cash ends up with Somali militants" - July 6, 2011

Available also on Business Insurance & Somali Diaspora News:

BUSINESS INSURANCE - "Piracy ransom cash ends up with Somali militants" - July 6, 2011

SOMALI DIASPORA NEWS - "Piracy ransom cash ends up with Somali militants" - July 6, 2011



UK SAIL WORLD - "Somali pirates - why do they prey on cruising yachts?" - July 13, 2011



AMERICAN SHIPPER - "Self-defenseless - Vessel security measures, insurance coverage, called inadequate." - 25 July 2011



AMERICAN SHIPPER - "Deadly Business - Pirates demonstrate coordinated logistics approach in spreading mayhem." - August 3, 2011



RADIO FRANCE INTERNATIONALE, interview in English - "Hijacking off Benin of an Italian tanker - how Somali piracy can inspire at distance" - Paris, France, July 26, 2011.

No longer available online - please contact us about getting a copy of the WMV file.



REUTERS - "Somali pirate ransoms skirt U.S. directives" - August 8, 2011

REUTERS AFRICA - "Somali pirate ransoms skirt U.S. directives" - August 8, 2011



REUTERS UK - "Ship insurers add Benin to risk list after attacks" - August 8, 2011

REUTERS AFRICA - "Ship insurers add Benin to risk list after attacks" - August 8, 2011



SUPERYACHT NEWS - "Yacht Attacked by Pirates and Crew Snatched " - September 10, 2011



NEW YORK TIMES - "Armed Pirates Hijack a Fuel Tanker Off Benin and Take 23 Crew Members Hostage" - September 14, 2011



IFW - "IMO calls for states to 'facilitate' passage of ships with armed guards" - September 19, 2011



REUTERS - "W.Africa pirates adapt after Nigeria crackdown" - September 21, 2011



FINANCIAL TIMES OF LONDON - "Yemen's descent into chaos fuels piracy fears" - September 26, 2011



SINGAPORE MARITIME OFFICERS UNION 2011 Manning Conference, Presentation - "Protecting Seafarers from the Piracy Scourge" - Singapore, September 30, 2011.



HONG KONG SHIPOWNERS ASSOCIATION Seminar, Presentation - "A Multi-Layered Approach to Piracy" - Hong Kong, October 3, 2011.



RADIO FRANCE INTERNATIONALE, interview in English - "Kidnaping of French woman from Kenyan luxury resort: context & implications" - Paris, France, October 4, 2011.

No longer available online - please contact us about getting a copy of the WMV file.



LLOYD'S LIST - "Where will pirates go next?" - October 12, 2011



AGENCE FRANCE-PRESSE - "Kenya at high risk of more kidnappings" - October 15, 2011.

AGENCE FRANCE-PRESSE - "Quatre Europeennes enlevees en un mois : le Kenya, voisin somalien, expose" - October 15, 2011.

AGENCE FRANCE-PRESSE - "Cuatro europeas secuestradas en un mes: Kenia expuesta a su vecino somali" - October 15, 2011.



MARITIME ACCIDENT ATTORNEY - "Piracy victims and PTSD: the untold story" - November 19, 2011



RADIO FRANCE INTERNATIONALE - "Ocean Indien: la lutte contre la piraterie porte ses fruits mais les pirates sont de plus en plus riches" - December 13, 2011



LA GAZZETTA DEL MEZZOGIORNO - "Indagine viziata da bugie e superficialita" - February 21, 2012


LA STAMPA - "Il caso dei pescatori ucisi" - February 21, 2012



WALL STREET JOURNAL (Blogs - India Real Time) - "Italy, India Have No Common Ground On Sea Incident" - February 23, 2012



MARINE MONEY ASIA 2012 Meeting, Presentation - "How growing direct & indirect costs of a hijacking can harm even shipowners or shippers with good fundamentals - and their bankers. Or why 2012 won't be 2009 - if only because cash reserves are gone" - Hong Kong, February 28, 2012.


SHIPPING WEEK HONG KONG 2012 Meeting, Presentation - "Crisis Management and the growing & under reported threat from piracy" - Hong Kong, February 28, 2012.


SHIPPING WEEK HONG KONG 2012 Meeting, Panel Discussion - "Piracy - cost and solutions. A geopolitical discussion on options for a solution to the piracy problem. International government intervention - or armed guards? What is the true cost to the industry? Criminal immunity for guards on ships, crew on escorts?" - Hong Kong, February 29, 2012.



NATIONAL DEFENSE - "Pirates Exploiting Cybersecurity Weaknesses in Maritime Industry " - March 31, 2012



LLOYD'S LIST - "Piracy study notes at least three patterns behind attacks" - April 4, 2012



SOUTH CHINA MORNING POST - "China's insurers see chance in trade shunned by West" - April 19, 2012



BLOOMBERG - "Shooting to Kill Pirates Risks Blackwater Moment on High Seas " - May 8, 2012



SAFETY4SEA - "Pirates Exploiting Cybersecurity Weaknesses in Maritime Industry" (reprint of NDIA column) - June 12, 2012



COWES YACHTING - "Superyachts to Carry Guns in Bid to Combat Pirates" - Summer 2012



BLOOMBERG - "Somali Pirates Battled in London as Banks Curb Dollar Supply" - June 22, 2012



LLOYD'S LIST - "Shooting reignites debate over rules on use of force" - July 24, 2012



THE (iPAD) DAILY - "Shiver Me Timbers - Somali pirates less a scourge of the seas as private security firms proliferate" - July 30, 2012



NATIONAL DEFENSE - "Security Firms Divided Over How to Succeed in the Anti-Piracy Business" - August, 2012



LLOYD'S LIST - "Relatives of Albedo 15 plead for help to raise money for ransom" - August 8, 2012



LLOYD'S LIST - "Killing over unpaid ransom signals new Somali pirate business model" - September 3, 2012



LLOYD'S LIST - "Ocean Atlas detention highlights need to regulate PMSCs" - September 11, 2012



LLOYD'S LIST - "Piracy resurgence is possible with cashflow injection" - October 5, 2012



LLOYD'S LIST - "Shift in pirate attacks may require new Listed Area boundaries" - October 10, 2012



LLOYD'S LIST - "IMB chief condemns cover-up of pirates' attempted attacks" - October 24, 2012



NATIONAL DEFENSE - "Energy Security Starts With Hardening Power Grids" - November, 2012



OCEANUSLive - "Piracy & Robbery At Sea Incidents - October 2012" - November, 2012



LLOYD'S LIST - "Two Southeast Asia hijackings highlight regional piracy threat" - November 2, 2012



NORDDEUTSCHER RUNDFUNK- "Rambos fuer den Anti-Pirateneinsatz? Vorwuerfe gegen private Sicherheits Firmen" - November 17, 2012



NATIONAL DEFENSE - "Piracy: A Threat to Maritime Security and the Global Economy" - December, 2012



BLOOMBERG - "Brother Shot Dead Fishing Tests Armed Guards' Accountability" - November 29, 2012



LLOYD'S LIST - "Nato urged to explain 'soft' approaches by pirates" - December 12, 2012



LLOYD'S LIST - "Super pirates" - December 12, 2012



ONBOARD ONLINE - "Piracy and the Rise of Armed Security" - January 8, 2013



LLOYD'S LIST - "Rules for use of force will be published this month" - January 15, 2013



LLOYD'S LIST - "UK strengthens its ocean security response" - January 28, 2013



LLOYD'S LIST - "Enrica Lexie case moves to Delhi" - January 29, 2013



LLOYD'S LIST - "Enrica Lexie legacy" - January 29, 2013



RADIO FRANCE INTERNATIONALE, interview in English - "Comparing Somali & Nigerian piracy models after hijacking of French-owned tanker off Cote d'Ivoire" - Paris, France, February 5, 2013.

No longer available online - please contact us about getting a copy of the WMV files.



ONBOARDONLINE - "C-LEVEL Maritime Risks Weekly News Summary" - February 12, 2013



BLOOMBERG - "Suez Canal Tanker Traffic Slides in January Amid Strikes, Riots" - February 18, 2013



LLOYD'S LIST - "Crew kidnapped from service vessel in new West Africa attack" - February 18, 2013



ONBOARDONLINE - "C-LEVEL Maritime Risks Weekly News Summary" - February 19, 2013



REUTERS - "Nigerian offshore attacks surge as pirates advance" - February 21, 2013



LLOYD'S LIST - "A rose by any other name - K&R policies operate along roughly the same lines on both sides of Africa, despite the risks being inherently different" - February 25, 2013



ONBOARDONLINE - "C-LEVEL Maritime Risks Weekly News Summary" - February 25, 2013



US NAVAL INSTITUTE PRESS - "Defense Cuts Could Increase Piracy, Experts Say" - February 26, 2013



LLOYD'S LIST - "Italy refuses to return Enrica Lexie marines to Delhi" - March 12, 2013



REUTERS - "Egypt unrest raises re-routing risk after Suez toll rise" - March 20, 2013



LLOYD'S LIST - "Return of Italian marines to India raises stakes for armed guards" - March 25, 2013



LLOYD'S LIST - "Many new PMSCs will not survive the year" - March 28, 2013



OCEANS BEYOND PIRACY - "Economic Cost of Somali Piracy 2012" - April 9, 2013



LLOYD'S LIST - "Settling the bill - Have Somali pirates cost global trade $6bn or $18bn?" - April 16, 2013



LLOYD'S LIST - "Bangladesh-based pirates pose a real threat to shipping" - May 16, 2013



SUPER YACHT NEWS - "Hurricanes and Piracy, You Need Expert Advice on Both" - May 21, 2013



REUTERS - "INSIGHT-Nigerian pirate gangs extend reach off West Africa" - May 29, 2013



LOS ANGELES TIMES - "Suspected pirates face unprecedented trial in U.S. court" - June 1, 2013



LLOYD'S LIST - "Will al-Shabaab turn to piracy? Analysts disagree over links between militants and pirates" - June 4, 2013



REUTERS - "Insight: Murder trial of Italian marines in India navigates murky waters" - June 9, 2013



REUTERS - "Egyptian anger grows over Suez Canal development plan" - June 13, 2013



LLOYD'S LIST - "Egypt looks for more revenue as Suez transits decline" - June 28, 2013



INSURANCE ADVICE NIGERIA - "West Africa: Maritime Business In Danger As Pirate Attacks Rise" - July 25, 2013



SHIPPING HONG KONG FORUM - "Egypt's politics make Euro-Asia trade via Suez Canal shipping latest hot-spot' says US based C-Level Maritime Risks " - July 31, 2013



LLOYD'S LIST - "Security industry questions flag state regulatory strain - Division on whether states should go beyond the international standard requirements" - August 5, 2013



LLOYD'S LIST - "Foiled port attack strengthens threat to shipping off Yemeni coast" - August 7, 2013



INTERNATIONAL OIL DAILY - "Egypt Boosts Security at Suez Canal, Sumed Pipeline" - August 26, 2013



INTERNATIONAL OIL DAILY -"Suez Canal Attack Raises Security Red Flags" - September 2, 2013



REUTERS -"Shippers brace for more Suez turmoil after vessel attack - Ships step up vigilance after Suez attack" - September 2, 2013



LLOYD'S LIST - "Lloyd's Agents have confirmed the Suez Canal Authority's initial line that Cosco Asia was the victim of an attempted terrorist attack" - September 4, 2013



OIL PRICE INFORMATION SERVICE - "Suez Ship Terror Attack Video Ups Oil Tanker Transit Threat" - September 5, 2013



US NAVAL INSTITUTE NEWS - "Video: Terrorists Launch Rocket Attack at Commercial Ship in Suez Canal" - September 5, 2013



THE NEW YORKER - "How to fight pirates" - September 24, 2013



ENERY INTELLIGENCE / ENERGY COMPASS - "Egypt: Suez Canal Risks Downplayed, Yet Real" - September 27, 2013



NEW YORK MAGAZINE - "Blackwater on the High Seas: The Real Legacy of Captain Phillips" - October 14, 2013



LLOYD'S LIST - "New attacks show Somali pirates will put up a 'real fight' for ships" - October 14, 2013



REUTERS - "Icebergs, insurance hamper top of the world shipping route" - October 15, 2013



LLOYD'S LIST - "Afweyne arrest in Brussels could trigger pirate reprisals" - October 15, 2013



WALL STREET JOURNAL - "Arming Captain Phillips - No ship with an armed security team aboard has been successfully pirated" - October 16, 2013



REUTERS - "Pirates kidnap two U.S. sailors off Nigerian coast - sources" - October 24, 2013

GUARDIAN - "Two US citizens kidnapped by pirates off Nigerian coast" - October 24, 2013

DAILY MAIL -"Two Americans have been kidnapped by pirates off the Nigerian coast after their oil supply vessel was attacked" - October 24, 2103

AL JAZEERA - "Pirates capture 2 US citizens off Nigerian coast" - October 24, 2013

BUSINESS INSIDER - "Pirates Kidnap 2 US Citizens On Oil Tanker Off Nigerian Coast" - October 24, 2013

HUFINGTON POST - "Pirates Kidnap U.S. Sailors Off Nigerian Coast" - October 24, 2013"



THE NIGERIAN VOICE - "Pirates kidnap 2 US citizens off Nigeria's coast" - October 25, 2013



GUARDIAN - "White House notes increase in west Africa piracy as Americans held hostage" - October 25, 2013



FOX NEWS - "Two Americans taken from Commercial Ship" - October 26, 2013

[ Video not yet available - please check back with us ]



PBS NEWSHOUR - "What does piracy off Nigeria mean for global business?" (PBS video) - October 26, 2013

PBS NEWSHOUR - "What does piracy off Nigeria mean for global business?" (YOUTUBE) - October 26, 2013



FOREIGN POLICY - "The Rise and Fall of Somalia's Pirate King" - November 4, 2013



VOICE OF AMERICA / TV2AFRICA - "Africa Piracy" (video) - November 4, 2013



OYIBOS ONLINE (EXPATS GUIDE TO NIGERIA) - "Spike in piracy spells disaster for Nigeria's oil, gas industry" - November 7, 2013



VEJA - "Mesmo fragilizados, piratas ainda ameacam costa da frica" - November 11, 2013



LLOYD'S LIST - "Security expert says ransom payout will prompt more West Africa attacks" - November 18, 2013



LLOYD'S LIST - "Lloyd's List 100 2013 # 90. Afweyne (Mohamed Abdi Hasan) Reformed' piracy figurehead is down but not out" - December 12, 2013



TIME MAGAZINE - "Did 2013 Mark the End of Somali Piracy?" - January 6, 2014



CARGO SECURITY INTERNATIONAL - "United States: New security service - US-based risks consultancy C-Level Maritime Risks has entered 2014 with the announcement of a new service for the maritime security market. " - January 6, 2014



FOREIGN POLICY - "Puntland is for Pirates - Why are convicted high-seas bandits being sent to the Somali region that profits from their crimes?" - March 20, 2014





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