There are many reasons why pirate ship shipping rates are astronomically high: The shipping companies are heavily regulated, with many ship owners facing fines for running their ships in breach of rules.
But a recent report from a New Zealand shipping company shows why these regulations have not stopped the industry from growing: A high percentage of the pirate ships in New Zealand are sold to overseas buyers.
“There’s definitely a demand from overseas for pirate ships, especially for cargo.
They’re the biggest ship class for a lot of the ships that we have in New England,” says Joe Brown, a former vice president of the New Zealand Shipping Association, which represents more than 20 shipping companies.
“But we don’t have the regulatory structure that we do in New York City, for example.”
Brown says the industry has a complex relationship with local governments, who regulate their own shipyards and oversee the licensing of ships, and the industry in general.
The most recent federal guidelines recommend that a vessel should be licensed as “not to exceed the length of an average passenger motor vehicle, if that is the only way to ship it.”
In New Zealand, a large number of vessels are licensed for a maximum of about 40 people.
Brown says that is often enough for some ship owners, but there is a limit on the number of people allowed on a vessel.
“If the ship is a smaller vessel, and you can’t make it, then that ship has to be shut down,” Brown says.
“In New York, the number you can ship to is limited to three.
In other parts of the world, there are three, and they can be very big.”
In the New England region, Brown says many of the shipping companies have been trying to find ways to get around these rules.
He says they have started licensing smaller vessels that are smaller and smaller, with some of the vessels getting so big they are almost a boat.
He’s heard stories of small vessels being shut down because the owners were able to convince a local council that they are not allowed on their vessel, even though the regulations clearly state that they can.
“They’re a little bit of a grey area,” Brown tells me.
“You don’t want to get too close to the legal issues that are involved, but they’re an option.”
He says the companies that are getting big vessels and using them in international shipping have the option of licensing these smaller vessels as well, if they need them.
Brown also says that there are also many more local owners who have found the pirates are willing to pay a higher shipping rate.
“There’s a lot more competition in the market for small ships, so it’s a more efficient ship,” Brown explains.
“That’s why the prices have gone up so much.”
For now, Brown thinks there is some relief in the marketplace.
“We’ve had a couple of small ships with high prices that we’re going to have to put down a little and put the other ships out there for a little while,” he says.
But he says it’s not always a happy experience.
“It’s kind of frustrating when they get really big and they’re going all over the world,” he admits.