Maersk increases piracy surcharge to US$200-$500 to pass on rising costs

DANISH shipping giant Maersk Line is increasing its "piracy surcharge" to US$200 to $500 per FEU from $100 to $400 on cargo passing through the Gulf of Aden and the Indian Ocean.

Maersk Line makes 2,000 voyages a year through pirate-infested waters off the Horn of Africa and is now deploying larger ships, which while harder to board, are more expensive to run.


"We have larger ships with more capacity, which isn`t needed, and that costs money," Maersk daily operations chief Eric Nielsen told Dow Jones. "As a consequence, our capacity utilisation on these routes is very low."


Maersk recently hired a former army major as anti-piracy chief in an effort to develop a stronger strategy and lobby competitors and politicians to make a tougher stand on piracy.


Maersk also declared the increase in the "emergency risk surcharge" had become necessary because of the rising costs of insurance, hardship allowances and rerouting vessels away from high-risk areas.


Maersk chief operations officer Morten Engelstoft said piracy-related costs would double in 2011 to $200 million. "In 2010, one hijacking attempt was registered every six days, and in 2011 there`s been a large increase in the activity," Mr Nieslon said. "The problem has never been larger."