The pirates of the Aden may be causing sleepless nights for the owners of ships they have seized, as well as families of crew members they are holding hostage, but the ramifications of Somali piracy is spreading beyond the shores of Somalia into the heart of the global economy.

Shipping brokers across the world are reporting an uptick in shipping prices as the Somali situation is causing ship-owners to consider re-routing ships via the Cape of Good Hope on the Southern tip of Africa. Insurance cost for freight routed via the Gulf of Aden has already risen 10% over the summer and recent events are certain to push it much higher

Several major shipping firms have confirmed that they will be re-routing via the Cape of Good hope these include Odfjell, TMT and Svitzer. The Lloyd’sList reports that AP Moeller-Maresk will be making a decision on the matter very shortly.

The new route adds 9000km, 20 days and millions of dollars onto a journey in comparison to an equivalent trip through the Suez Canal. Additionally the long trip time will effectively mean a reduction in shipping tonnage generally available which further feeds into shipping costs

Also hard hit by this would be the Egyptian economy for which fees and services associated with the Suez Canal is the second biggest source of foreign exchange.

The most recent episode of Somali piracy was the seizure of the Saudi super tanker carrying millions of dollars worth of crude oil on Tuesday.