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Somali Pirates and the Navy

  1. Apr 4, 2010 #1
    Have any scholars suggested means of combating the issues of violence and Somali pirates via naval tactics (by the U.S. or other countries), and if so, what are their suggestions?

    Please, feel free to request clarification if necessary.
     
  2. jcsd
  3. Apr 4, 2010 #2
    I think the largest piracy hub lies somewhere in the Malaca Straits near Singapore. I don't knowwhy Somali pirates make headlines over the others, but there are rumored insurance issues that prevent recording all thefts at sea.

    Though if I had to take a gamble, I would say proximity to the Middle East, Red Sea and Aden Gulf makes Somali piracy a headliner. When I look at Somalia, I see a divided country with no real nationwide central government. The piracy hub from what I reckon lies to the south near Mogadeshu. Since Somalia's coastline is large I would say that piracy issues in the south would lead to military action in the north.:wink:
     
  4. Apr 5, 2010 #3
    The explanation I heard was that there's a cost-benefit analysis that has prompted shippers to accept a certain amount of loss to piracy rather than combat it.

    This sounds like a profit-sharing issue to me, as such.

    If that's the case, I would say the solution is to reduce the profits generated by shipping to the point where piracy and security are unaffordable.

    This could be done by better market competition between those chartering shipments. Shipping would become a much less lucrative industry, but it would also become less attractive for pirating or security mercenaries with the ability to effectively combat pirating.
     
  5. Apr 5, 2010 #4

    CRGreathouse

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    Unless the profits drop enough to stop shipping, I don't think this works. If a shipper is paid $80,000 to ship $1M of goods, then the shipper's profit is some fraction of $80,000 and the pirate's potential profit is some fraction of $1M. If competition amongst shippers drives prices to $70,000 their profit decreases by $10,000 (possibly making it negative!), but the value to the pirates is unchanged (or even increased).

    Pirates are working from a much larger pie than shippers.
     
  6. Apr 5, 2010 #5

    mgb_phys

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    Until very recently they mainly targeted small boats in the Straights of Malaca, they left large ships that could afford security alone.

    The pirate attacks off Sudan targeted large ships, owned by companies that could demand some government action, they don't want the cost, liability and political headaches of employing mercenaries - and Sudan is in a region where lots of naval hardware is present anyway.
     
  7. Apr 5, 2010 #6
    This isn't what I meant. I meant that the $1M be driven down by competition such that the profit of shipping the goods in the first place goes down. At that point, the risk of piracy would either deter shipping completely OR shippers would employ cheaper methods of preventing or fighting piracy.

    I wonder why shippers have not just installed strong security doors on the ships. Isn't it possible to run a ship from behind closed doors? In fact, isn't it even possible to run a ship completely by remote control?
     
  8. Apr 5, 2010 #7

    mgb_phys

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    They do on modern ships but it's expensive to retrofit to an older ship with lots of walkways and grantries that is designed for easy exit in an emergency.
    Then how strong do you have to make them, bullet proof, assault rifle proof, rocket propelled grenade proof?


    For much of the voyage yes, the remote control is more a liability issue.
    A cruise missile can pilot itself far more accurately than a passenger airline - but e insist on pilots, how much damage could a 200,000ton tanker or container ship do if it went wrong.
     
  9. Apr 5, 2010 #8

    CRGreathouse

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    Why would competition reduce the value of the goods carried?
     
  10. Apr 6, 2010 #9
    I guess my question then becomes who is supplying these weapons for piracy? Is it possible to trace the supply chains of weapons and control them somehow?

    This gets into a big discussion of economic market behavior, but basically it comes down to the fact that there are two forms of supply-side competition. #1 is price competition where firms with similar products compete to lower costs and win sales by undercutting competitors' prices. #2 is competition for relative market control. Since monopoly is still illegal most of the time, I think, the farthest most industries can get is oligopoly.

    Even when there are multiple competing firms, though, they often compete by finding ways of positioning their product(s) in such a way that price competition is either prevented or discouraged. There are many ways of doing this within a free market, such as advertising or negotiating special treatment by vendors. The idea is to drive the price as high as possible to maximize profit by avoiding price competition whenever and however possible.

    This second form of competition is what drives prices across the board up, imo. It also drives up profits and the ability to re-invest. This "surplus money" is what makes it possible to levy taxes or steal/extort money, such as by pirating.

    If price competition drives prices down to the level where businesses are working at cost-levels or slightly above, not much could be extorted in piracy before the businesses would be pirated into bankruptcy. Pirating czars would have to make the decision of whether they wanted to terrorize industry out of the waters or whether they wanted to allow shipping to take place. There would be no profit in piracy.
     
  11. Apr 6, 2010 #10

    mgb_phys

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    It's east Africa, after 40years of civil wars weapons are rather easier to find than food.
    Originally most of these weapons were either supplied to terrorists to allow them to murder their legitimate government or were given to freedom fighters to allow them to throw off the yoke of communism.

    The business model is also a little different, the Singapore/Malaysia pirates have killed a lot more people (not sure if the actions off Somalia have killed any?) but most of these are crews of local small ships so it doesn't make the news.
    The Somali pirates operate more like neighborhood drug dealers, somebody funds the boat, he pays middlemen who pay middlemen who hire the actual guys you are going to shoot - they get a few $.

    So you can kill enough of them that there is a shortage of teenagers who want to play with guns and fast boats or the amount they have to pay the foot soldiers is uneconomic.
    You can trace the ransom money higher up the food chain, essentially stop any cash going in/out of Somalia.
    You can invade the country.
     
    Last edited: Apr 6, 2010
  12. Apr 6, 2010 #11

    CRGreathouse

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    How is this related to your point?

    I think you're talking about product differentiation here, or what used to be called second-degree price discrimination.

    That doesn't follow at all! If profits were literally zero, piracy would still be possible: steal the cargo and fence it.

    1. If pirates steal from all shipping companies, not just one in particular, then piracy is a cost of business. This is a shift in the supply curve: at any given quantity, the cost will increase. The quantity demanded will decrease, the price per unit will increase, and the market will find a new equilibrium. The net effect is a deadweight loss in former shipping consumers who are now priced out of the market and a transfer of wealth from remaining shipping customers and the shipping companies to the pirates.
    2. Pirates don't need to get money from shipping companies. In a pinch, they can just sell the stolen goods.
     
  13. Apr 6, 2010 #12
    So this piracy is just organized crime that has found a way to "tax" the supply chain for shipped goods, basically. If pirates are willing to sell "stolen" goods, a solution might be to offer them a deal where they can buy the goods they would steal on credit at a price that would allow them to make a profit legally and with less risk. The same people could do the logistical labor, only the deal would be mutually beneficial instead of tolerated theft on one end and dangerous big rewards on the other.
     
  14. Apr 6, 2010 #13

    mgb_phys

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    For the pirates off singapore - yes.
    Our off-shore division did some work for boats in this area.

    The pirates mostly want cash, they rob smaller local commercial shipping and take mostly petty cash from the crew. The boats keep a certain amount of pay-off money, sometimes the pirates kill people to keep the cash flowing but as long as they are locals no-one cares.
    They tend not to attack large fast container ships and the big shipping companies regard any payoffs as a tax. Basically in SE asia they pay off the pirates, in Long Beach they pay off the teamsters and in Rotterdam they have to pay for expensive low-sulfur diesel - they don't see any differences in these costs!

    Slow high value boats in the Malacca straights (hydrographic survey, cable laying, salvage etc) do employ heavily armed security to warn off any pirates. The pirates don't want a fight so pick an easier target - it's all economics.

    The pirates off Somalia don't unfortunately play by the same rules. They have financial backers that aren't taking the risk themselves so it's no problem to send a few teenagers with AK47 to attack a defended merchant ship - so until you kill all the poor dumb teens in east africa there is no end to the arms race.
    Then there is a political aspect that some of the backers are trying to attack the 'west', others are trying to attack Egypt by reducing canal traffic and others want hostages.

    The shipping companies feel that if this is really an international/political problem then it's the government's problem - not theirs. Of course many of the governments feel that if the shipping companies feel that, then they shouldn't have registered their ships in Liberia!
     
  15. Apr 6, 2010 #14
    Thanks for this very informative post.
    They are all methods of socially-redistributing profit-margins. I have been wondering what is going to happen as real estate prices keep deflating, as far as real estate taxation and tax revenues go. You would think that government would adjust to a deflating economy, but fiscal stimulus proponents think that cutting government budgets and revenues further harms the economy. It's a parallel issue, maybe, but it seems relevant with regard to the relationship between shipping costs and the economics of trading in the shipped goods.

    Obviously the attacks are "on the west," or maybe you could say "on global consumerism." People are jealous of prosperity and hate it at the same time, mainly because of the greed and inequality. People who aren't jealous don't care about inequality. I don't desire a Porsche so I don't worry about inequality in car ownership.

    Probably the most effective solution would be if you could somehow get to these kids and/or whoever is backing them and teach them that material wealth isn't worth risking and/or wasting your life. That probably sounds like hippie solution, but I don't see how else you can ever have lucrative shipping trade and not have taxation and pirating designed to spread access to "the pie."

    Ironically, if there was no money changing hands for things, they would be much less interesting to steal. Think about drugs. Who would want to hijack a boatload of heroine if it was just something that was given away to get "social-undesirables" to overdose, which it is anyway for the most part, I think. The fact that people pay for junk makes the junk valuable to tax, steal, hijack, etc.

    That's why I think lower consumer prices would reduce shipping demand, and make pirating less lucrative and therefore attractive. I bet no one is pirating trash barges!

    As for the petty-cash theft, haven't these sailors ever heard of cash machines or traveler's checks? What about having a safe for petty cash? I suppose if hostages are involved, someone would open the safe, but if it was like a supermarket, the safe would be deposit-only until they were at a port.

    It's a morality problem. Like most ethical abuses, trying to control it results in more ethical abuses and it becomes a balancing act of lesser evils. Maybe the way to balance it would be to support pirating of pirates returning from piracy missions. That way, if a boat of kids is returning with their booty, another boat of kids pirates them and takes the booty. Pretty soon, either no one will want to risk pirating for risk of being pirated themselves OR the strongest will survive and pirating skill will have evolved that much further.
     
  16. Apr 24, 2010 #15
    I say let's put some fake cargo ships out there, with Navy Seals in mini-subs.
    When the hijackers approach and threaten, blow them away!! No press!! Keep it secret.

    Then do it again, and again and again...
     
  17. Apr 24, 2010 #16
    That's clever. What about constructing a generous amount of fencing with barbed wire around the perimeter of the hull? Would pirates be able to come on board then?
     
  18. Apr 24, 2010 #17
    No. These pirates like to initially threaten with RPG's(rocket propelled grenades)
    That's a "stand-off" weapon of considerable influence. Can blow a hole in the hull.
    Thus threatening to sink the ship they demand boarding.

    We need to intervene before boarding.
     
  19. Apr 24, 2010 #18
    It is much more cost effective to pay 1 million to get your tanker back, than it is to pay 2 million for a private contractor that may or may not be needed. Also, it is illegal to carry arms into national waters, so security forces would have to have their arms locked in a safe until passage into international waters.

    Currently pirates are being detained, their ships sunk, and then they are sent back to shore with just enough gas to get home in a remaining ship.
     
  20. Apr 24, 2010 #19
    What about changing the shipping route to avoid the area?
     
  21. Apr 24, 2010 #20

    mgb_phys

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    That would require creating an alternate route between the Indian ocean and the Mediterranean.
    Perhaps a canal through Iraq, Jordan and Isreal?
     
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