Maritime Piracy and the Supply Chain

The scourge of modern maritime piracy is expensive for the international community, ocean carriers, insurance companies, and other entities that participate in and benefit from global trade. This chapter surveys the nature and scope of modern maritime piracy, summarizes the key impacts and costs of piracy for global supply chain operations, and discusses strategies that can be employed to evade, deter, and mitigate this threat. Implications of piracy and armed robbery for supply chain partners include seafarer abuse, injury, or death; the need for premium crew compensation; the payment of hostage ransoms; elevated insurance premiums; delayed cargo delivery; reduced cargo value; higher fuel costs; security equipment expenses; and the need for embarked security teams. Strategies that can be used to address the threat of piracy that are discussed include the implementation of Best Management Practices; enhanced training, drills, and exercises; naval intervention; the use of transit corridors and group transits; and supply chain reconfiguration.