The Economic Cost of Maritime Piracy

January 2011

One Earth Future Paper

At the end of 2010, around 500 seafarers from more than 18 countries are being held hostage by pirates. Piracy clearly affects the world‘s largest trade transport industry, but how much is it costing the world? One Earth Future (OEF) Foundation has conducted a large-scale study to quantify the cost of piracy as part of its Oceans Beyond Piracy project. Based on its calculations, maritime piracy is costing the international economy between $7 to $12 billion, per year.

The report details the major calculations and conclusions made in the study. The project focuses on direct (first) order costs, but also includes some estimates of secondary (macroeconomic costs), where data is available. It concentrates on the supply-side costs to both industry and governments. The study set out to analyze the cost of piracy to the Horn of Africa, Nigeria and the Gulf of Guinea, and the Malacca Straits. The focus is inevitably on the costs of Somali piracy because this is the region where contemporary piracy is most highly concentrated and is the greatest source of current data and information.

The OEF has kindly given given permission for the report to be made available on the Steamship Mutual website. It is available to view and downloaded below.