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Chinese Destroyer Haikou Boards U.S. Coast Guard Cutter

|Includes:FRO, GOGL, NAT, Teekay Tankers Ltd (TNK)

It looks like things are starting to get serious again in the international battle against piracy. During ongoing international exercised held in the waters off Hawaii, China has partnered with the United States and 20 other nations to hone their skills and foster international naval cooperation. As reported by the Associated Press:

China has been boarding ships looking for mock pirates and contraband as it joins the world's largest maritime exercises for the first time.

On Wednesday, Chinese sailors from the destroyer Haikou boarded the Coast Guard cutter Waesche for a drill checking cargo as part of Rim of the Pacific exercises the U.S. is hosting in Hawaii waters this month. The Americans played the role of a merchant ship carrying valuable paintings.

Coast Guard Lt. Gregory Ostrov, exercise safety officer for the drill, said the Chinese sailors were eager to cooperate and demonstrate their proficiency as mariners.

This cooperation is more than just necessary, it is timely, since the South China Sea has become a haven for pirate activity since the beginning of the year. Thus far, there have been more pirate attacks in the South China Sea and Malacca Straits between Singapore and Indonesia than any other geographic region.

This past Tuesday, the tanker MT Oriental Glory was hijacked and drained of it's gas oil cargo before being set adrift. Noel Choong, head of the International Maritime Bureau's Kuala Lumpur-based Piracy Reporting Centre said "This is the ninth attack in these waters recently… It's a big concern."

Earlier this month, pirates hijacked the tanker Moresby 9:

The Honduras-flagged Moresby 9 was boarded by nine pirates armed with machetes and pistols on 4 July in Indonesian waters near the Anambas Islands in the South China Sea. The crew were tied up and locked in the engine control room, apart from the chief officer who was forced to navigate the vessel.

The Moresby 9 was then met by a second vessel, an orange tanker of around 3,000 gt, and 2,118 tonnes of MGO transferred onto the second tanker in an operation that lasted about six hours. The pirates left stealing personal belongings and communication equipment, and the crew were unharmed.

It should be noted that the Moresby 9 is owned by the same company that owns Naniwa Maru No. 1 , 3,238 gt and Ai Maru, 1,007 gt which were boarded on 22 April 2014 and 14 June 2014 respectively. Obviously these attacks are being pre planned and some have suggested there is much more behind the incidents that they typical smash and grab attacks or ransoming tactics commonly used by pirates off the African coasts.

Delex Systems consultant James Bridger puts it this way, "The common modus operandi used by these pirates indicates that the attacks are likely the work of one gang that's receiving information and paychecks from a crime syndicate with roots in Indonesia and ties to Singapore. Since no pirate, nor anyone from this alleged crime syndicate, has been caught, not much is actually known about them." He believes that the pirates are most likely from Indonesia and have intelligence contacts in Singapore.

Obviously, this makes things more risky for any tanker traversing the straights. Share holders of tanker transports like Frontline (NYSE:FRO), Knightsbridge (VLCCF), Nordic American (NYSE:NAT), Scorpio (SBNA), and Teekay (NYSE:TNK) should take note.

Stocks: TNK, NAT, GOGL, FRO