Friday, February 25, 2011
PIrates at it Again
Pirates attacked a leisure vessel this week. This got me thinking about how much a modern day pirate could impact the price of any commodity transported by water. Then I found that recently, pirates hijacked a US bound oil tanker off of the coast of Somalia. The Oil, being as valuable a product as it is will make the ransom for the tanker astronomical. Especially for the vast quantity that was on the tanker. Pirate attacks and hijackings cost the global economy over $12 billion a year. All that can do is cost us more at the pump.
Because of the danger of sailing through the area, the shipping companies have to pay the seamen more money to sail. They also pay increased insurance rates on ships that move through pirate infested water. The increase in cost because of the pirates impacts us directly through higher costs for anything imported to the US from the Middle East and India. That includes oil, cotton and many other highly used items.