The annual cost of piracy in the Horn of Africa region alone is in the billions of dollars1, mostly in the form of higher fuel consumption ($3.3 billion) from increased speeds and re-routing of traffic, as well as private security ($1.1 billion) and military operations ($1.2 billion). Ransoms ($0.16 billion) are a small fraction of the total.
Multinational task forces, while certainly the most powerful weapon against piracy, are slow to respond, must prioritize missions based on a variety of concerns, are not likely to last indefinitely despite making a significant difference, and involve significant political and other barriers to actually accomplishing the desired result of reducing the cost of piracy.
The purpose of the proposed vessel is to provide an unprecedented worldwide response capability with a strong, multi-mission platform from which to conduct a wide range of maritime operations. These would include counter-piracy and general security, hostage rescue, shipping escorts, and humanitarian relief. Each of these missions is legal for private mariners to perform, so long as they follow the laws of the flag state and international law.
Clients would include, in order of precedence, shipping lines, insurance companies, governments with specialized needs, and private individuals. Though charters would not be possible, a range of valuable services unique to client requirements and resources would be offered, with the only limit being the availability of the ship and the minimum prices needed to make the program possible.
In the event the primary missions became uneconomical, the ship could be leased or sold to an allied navy and reconfigured as a light destroyer or patrol vessel, or converted into the world’s fastest and most powerful superyacht for a billionaire who has everything else.
The ideal business model is based on a series of fees associated with various service options, ranging from straightforward patrols and searches at lower prices to specialty packages suchas complex hostage rescues against large targets, or even interim power and water supply needs in disaster-struck areas.
The program is possible in today’s legal environment and is possible or within reach of current commercially available technology. The ship requires no classified or restricted information or products, although there would be significant challenges associated with obtaining the best propulsion system if its manufacturer is not willing to work with an international client.
The estimated cost for the ship and all necessary equipment is $400-800 million, depending on configuration, with an intended service life of twenty-five years.
Personnel and operating costs are undetermined and would depend on mission-specific configurations, but are substantial. With an estimated average complement of one hundred crew earning an average of $100,000 per year, plus forty highly qualified security force members earning an average of $250,000 per year, a base personnel cost of $20 million per year for compensation seems reasonable. Combined with the amortized cost of the ship, the floor of income needed to make the program possible is estimated to be $36-$52 million per year, or $3 million to $4.3 million per month. Mission-specific crew packages would be available, but the need for a consistent pool of qualified members suggests that a relatively constant level of staffing would be required. In any event, to make the venture economical before considering profit or additional expenses such as repairs, selection and training, upgrades, and other needs, the program would need to reliably capture at least $3-$4.3 million per month in service fees from clients. This is miniscule compared to the cost of piracy and security, and it appears there is ample room in the industry for the services that would be offered.
The ship fills a need that slots above what is possible with even the most capable private vessel, but below the more expensive option of an official navy ship. The goal is a privately operated program that offers a number of the capabilities of the new Zumwalt class of U.S. Navy destroyers at a fraction of the cost, plus a level of speed and overall performance that exceeds what is possible from the U.S. Navy’s Littoral Combat Ships. This degree of value is possible because the proposed vessel does not require the weapons systems, stealth, advanced communications, signals intelligence, or Anti-Submarine Warfare capabilities of U.S. Navy ships.
1One Earth Future Foundation, “The Economic Cost of Somali Piracy 2011” (2012).