Threat of Somali pirates forcing vessels to take longer trips, delaying shipments Somali pirate attacks are rising quickly, raising costs for shippers and posing a serious threat to vessels carrying nearly 20 percent of global trade goods, Bloomberg reports.

There has been a 36-fold surge in ransoms in five years, ultimately resulting in higher transportation costs. To avoid the Somali presence off the coast of east Africa, many vessels are diverted onto more circuitous, longer routes, adding $2.4 billion in transport costs to shipping companies.

The average ransom payment given to Somali pirates totaled $5.4 million in 2010, far greater than the $150,000 average of 2005; moreover, attacks off the coast of the poverty-stricken country were the highest ever on record in 2010, with 49 vessels hijacked.

Shipping companies often divert vessels toward longer routes: For example, many ships are sailing around southern Africa rather than through the Suez Canal, which adds about 12 days to a journey from Saudi Arabia to Houston, Texas, according to Riverlake Shipping analyst Luis Mateus.

The longer shipping routes are causing supply chain delays and eating into corporate profits, but the threat from the Somali pirates shows no sign of letting up. In areas in Somali where pirates have bases, the hijackings are "woven into the social and economic fabric of everyday life," the UN stated in a report.  
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