The economic impact of piracy is likely to take a huge leap, because of changes in the way insurance rates are figured. This is expected to add billions to shipping costs. Of course it won’t hurt the insurance companies, but we can expect the cost to be passed along.

The Practice of hijacking ships rather than simply robbing them is spreading to the South China Sea, an area where piracy was common in the not too distant past. Additionally there is a report that shipping companies may be withholding information from their crews regarding the kind of treatment they can expect at the hands of pirates. (Note: BMP means “Best management Practices” and NSC means National Security Council.)

So far, no ship with armed security guards on board has been taken by pirates. The US has encouraged its ships to hire security, but some other countries still contend it is bad policy. Some even prohibit the practice. The shipping companies seem to be coming around to the conclusion armed security is a good idea. At least one Dutch company is indicating they may re-flag their ships if the Netherlands does not permit them to hire private security.

Another indication this may be a very long campaign. Japan has established its first permanent base outside of Japan since WWII to support their counter piracy effort.

The fact that Yemen, just across the Gulf of Aden from Somalia seems to be devolving into the the same sort of failed state, is not a good sign.