Can Somali pirates bring down European supply chains?

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The BBC news this morning ran an interesting and worrying story: Shipping companies are considering to avoid The Somali coast and Suez canal on their way to Europe and rather take the long route around Africa. That will make for an extra lead time of 3-4 weeks, but at least the goods will arrive safely. If enough shipping companies in fact take such a step, this could mean a temporary supply chain disruption for Europe, while the new lead times settle in.

Fighting Somali pirates

The Miami Herald had this article earlier this month

The chief concern is that the brazen attacks could fuel terrorism and make one of the world’s major shipping routes too dangerous and expensive to traverse. Insurance rates for sailing in the area zone already have shot up tenfold in a year.

If the ships really were to take the Southern route this could mean a temporary and unforeseen shortage on certain goods in Europe. Is this the price we have to pay for lean and efficient global supply chains?

Is your supply chain at risk?

A report published by the RAND corporation, mentioned in my post on Is your supply chain at risk?, states that acts of piracy — boarding a ship to commit theft or another crime — totaled 2,463 actual or attempted incidents between 2000 and 2006, that’s 351 per year on average, and already the number of attacks on the International Maritime Bureau live piracy attacks map is approaching 250 for 2008, with Indonesia, Nigeria and Somalia being the top three attack countries for the past 3 years.

Threatening global trade

Chatham House, the renown British research institution on international affairs, published a report in October this year, citing the increase in attacks from Somali pirates as a major risk source for terrorism, environmental disasters and supply chain disruptions.