By Rene Toomse, CEO of Aburgus
Maritime Security is not a rocket science. To conduct the actual
work one just needs a number of trustworthy men, some money and a bit of
creativity. The whole industry can be roughly explained within the
three simultaneous lines of operations: logistics, marketing and
manpower. They all have the logic, but also the pain.
In the article I will discuss on types of the service providers, the
logistics that embeds huge amount of irrationality and touch base with
intelligence, all the crazy licensing, certifications, approvals and
also touch on false image marketing.
Here will be no names of the companies or persons other than
referring to public statements or data. The idea is not to condemn
anyone or promote my company, but simply and openly bring out the
essence of the industry that is far simpler but meanwhile tremendously
complex and stressful that non-industry people could imagine. And let me
put this up front here – the real stress and fight is not caused by the
pirates. They are likely the easiest part in the whole “game.”
Defining security – imagination or reality?
What is security? Is it a perception or something touchable? What is
the standard for security? There are no clear answers. Many theories
explain security as this is someone’s concern, being a person, company
or State, feeling safe (perception) and being saved from the actual harm
(real). Many say that deterrence is the highest level of security. By a
good deterrence one creates the perception to adversary that the
security provider is capable of providing the real security and this
will most likely hurt the adversary. A rational person evaluates the
risk-reward and if the balances are not to his favor, he will not
attack. The deterrence has worked.
The same can be explained in maritime security.
The providers who emphasize on deterrence are likely less needed to
present their real capabilities to provide the security, which is fight
the attacking pirates. A vessel, wrapped up with razor wire with
visually armed men on board, is not an attractive target. The defender
of a vessel has always held the so-called tactical high ground that puts
him him or her in a better tactical position over multiple attackers
from the sea.
Here the security starts and presents a scenario to the potential
pirate that by attacking this vessel, he will likely end up bleeding to
death due bullet holes while tangling within razor wire. Clearly not a
soft target, or a good visual for the would-be pirate.
Another level is warning shots.
Some pirates will test to see if what they perceive as a hard target,
is in fact ready to defend itself. Maybe the guards are dummies or
they have mock weapons? Pirates then come closer to provoke and if no
sign of real harm to them is presented, they attack. The deterrence has
failed, perception diminished.
Warning shots however, will insure that the perception is backed up
by real harm in case they are willing to proceed. Most of the time they
will drop the intent, change their course and will wait for another
vessel to test her in the same way.
In summary we can say that security is mainly a perception that needs
to be backed by real means in case the deterrence does not work.
Service providers – the good, bad and ugly
No one knows exactly how many actual service providers are out there
today. Let’s define the “service provider” as groups who conduct or
organize security services on vessels operating in the areas where
pirate attacks are likely.
From service providers we can recognize the few different emerging groups:
Full Style Providers – the ones who run all the
previously mentioned lines by themselves. They have acquired most of the
industry recognized memberships (ICoC, SAMI), certificates (ISO 9001
and others), Flag State licenses (Panama, Cyprus etc.) and by industry
demanded Insurances (Public Liability, Professional Indemnity and
Personal Accident). In addition, they have procured the weapons legally.
In short, these are the companies who will conduct the full service
from A-Z by following the IMO and other governmental and industry-set
demands.
There are also small and large companies in this field. Some of the
companies are cooperating and some are trying to push the competitors
overboard. There are very few who trust each other and truly cooperate.
They are usually found within SAMI’s list of 181 companies as of June
2013, but not all the listed will count as such companies. Full Style
Providers are trying to run the operations as independently they can to
save the maximum possible profit that is not easy to collect over the
huge expenses on all the formalities and operational fees.
Half Baked Providers – they are either on the way to
the Full Style or have decided to operate in the middle zone for
different reasons. Mostly they are lacking of weapons that are not easy
to procure for different reasons and would produce high costs of
sustaining them. Some will not buy the insurances. The combination of
renting weapons, insurance coverage and a custodian serves them well.
They are relying heavily on a partner’s assets availability. Therefore,
sometimes they might not be able to provide the service within short
notice. Also, their expenses depend on partner’s rates to rent weapons
and be the proper custodian of them.
Brokers – there are companies who fully or mainly sell
to the other companies. They have heavy focus on marketing, but usually
possess no teams, weapons, licenses, certificates or insurances. They
act as connectors between real providers and collect their revenues
either by so-called union fees and percentage or added fees to the
providers demands.
Some of them are honest and are pursuing long-term mutually
beneficial relationships, but some are simply thieves who will stop at
nothing to maximize their profits on short terms gains while sacrificing
long-term sustainability. Directly they are not responsible for
anything and all the burden lays on the actual provider.
Illegals – Companies or bands of brotherhoods
who are missing a majority of the prerequisites or not following best
management practices demanded by the industry. They usually have the
manpower and channels to acquire the weapons from black market and do
the actual job at a very low cost using inexpensive manpower and cheap
weapons.
In many cases, the weapons are usually for one-time use and will go
over board before arriving in port. There are also some vessels
companies who will hide the weapons well within the vessel and issue
them out for the next transit, usually to the same company. This saves
significant costs, but if discovered by port authorities, the ship could
charged with possessing illegal weapons or missing backup of insurances
in case of security-related incidents.
Of course there are variations and mix of even the types described
above. However, those are the most commonly distinguishing company types
in this industry.
The actual providers can also be divided as large and small companies.
Large companies generally have a more robust logistics chain, and
even a few of them have their own floating armories to reduce their
costs on agency and governmental armory services fees in a particular
region. To sustain them however, they need to have a great volume of
transits as the fixed costs are relevantly high. The larger the company,
the larger the supporting staff, but also the threat to lose the
flexibility to meet the particular needs of the client in short term.
Smaller companies in turn, are sometimes more likely to provide more
personally-catered services to a particular client. There is often a
perception that smaller ones cannot provide the solutions that require
the fast and problem-free embarking/disembarking, but this is not
necessarily the case.
Here the personal touch and truly customized solutions of the top
management by themselves can make a smaller company a more attractive
option than a large one.
Also, in times of fewer transits, the smaller companies are about to
suffer and frustrate less as they have no huge fixed costs to sustain.
They can easily go to idle mode for some time and still be ready to send
out a high quality teams once requested. A perception that companies
who do
less than certain number of transits
per month will not survive in current market situation, is not
necessarily true. Also they can have a very swift logistics as they
approach their agents more personally then large ones can allow for
themselves. Personal approach is and will stay a great enabler in this
ever-changing environment of regulations from every direction.
There is also an overall sense that as larger companies are even
advising all the different licenses to force the small companies out of
the market.
Smaller ones simply do not possess enough assets to pay all the fees
despite the fact the actual quality of their operations may easily
exceed the larger company’s services.
There is no mercy in this business. Adopt or die. However, once the
small companies are gone then shipowners will likely have only “Walmart”
shopping, standardized solutions, and perhaps open the door to more
illegal operators.
