Maersk Hikes Piracy Surcharge

Maersk Hikes Piracy Surcharge

Maersk Line is increasing its emergency risk surcharge for transporting containers through the pirate-infested waters vof the Gulf of Aden and the Indian Ocean.

The adjusted prices will  increase to $200 to $500 per 40-foot equivalent unit from $100 to $400.

The increase is necessary to pass on some of the company’s rising costs to customers, Erik Rabjerg Nielsen, the division’s head of daily operations, told Dow Jones on Monday.

Maersk Line expects its piracy-related costs to double in 2011 to $200 million to cover insurance premiums, hardship allowances and the rerouting of vessels away from high-risk zones in the region, according to Morten Engelstoft, its chief operating officer.

“In 2010, one hijacking attempt was registered every six days, and in 2011 there’s been a large increase in the activity," Nieslon said. "The problem has never been larger than right now."

Maersk Line ships make approximately 2,000 annual trips through pirate-ridden waters off the Horn of Africa, which cover an area about the size of Europe, now are made with larger ships, which are harder to invade than smaller ones. “We have larger ships with more capacity, which isn’t needed, and that costs money. As a consequence, our capacity utilization on these routes is very low,” Nielsen said.

Maersk recently hired a former army major as antipiracy chief in an effort to develop a stronger strategy and lobby competitors and politicians for a tougher international stance on piracy.

“Piracy is bad for the shipping industry, it’s bad for global trade, and it’s important that politicians and all involved take a larger responsibility now to try to put an end to it,” Nielsen said.

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