Pirates of the Supply Chain: Cost, Insurance and Russian Cowboys (Part 2)

Thankfully there aren’t that many IEDs (Improvised Explosive Devices) in Somalia but my contact (click here for Part 1 in this series to learn more about his background) sees plenty of incidents on an ongoing basis. His “counterparts” can be one of the many local criminal gangs who operate on profit or the more politically motivated groups like al-Shabaab – a group that has been involved in a general struggle against the Western world.

Regardless, the Englishman thought Kenya was no big deal. He flies through on a regular basis on his way back home for leave and usually spends a few days in the country. He says that Kenya is fairly safe, as long as you realize it’s a 10% country. This refers to the fact that 10% of the population lives by Western standards in nice areas, and the rest would be lucky to have two Kenyan shillings to rub together. In fact, a substantial percentage of the population lives in shacks and earns about $1 per day.

The Englishman graded the surrounding areas and largely reinforced the views expressed thus far in this series with one interesting exception: South Africa. He was extremely negative on South Africa, describing it as a powder keg about to go off at any time. I inquired as to the trigger, and he suggested that when Nelson Mandela is no longer around as a behind-the-scenes power broker, that is the time to be concerned.

But getting back to Kenya—on a more positive note, the troubled areas mentioned above are in surrounding countries, in particular in Somalia and the Arab Straits. At the Nairobi airport I saw a large number of Western (British, French, Italian and Swedish) tourists. Some were sunburned enough to have likely been on the beaches in Mombasa, while others looked more like safari types. There were children of all ages. Clearly, Kenya attracts tourism.

Regarding my own experience in Nairobi, I went through numerous rough areas but never felt at danger. Having spoken with numerous locals, the consensus seems to be that all is well during the day, but late at night you should never stray from well-lit and largely populated areas. Driving between cities at night is also a bad idea.

These views were echoed by a group of 3rd generation Indians in Kenya that I met. All owning Kenya passports, they had all made successful careers and businesses for themselves in Nairobi. That said, they stressed the caveats already mentioned above and agreed that India has similar issues as Kenya in regards to security and the 10% society model.


In my opinion, once you have adapted your lifestyle accordingly and accepted the 10% society model (and there’s nothing you can do about that in the short term), you should be able to work and live comfortably and safely in the country.

Regarding the “anti-buccaneering” security teams: how this is handled is obviously an area that can impact not just the bottom line but also human lives (those of your own employees and contractors, and of course those of the aggressors) with the latter carrying political, media and brand impact price tags.

From a procurement and “supply risk angle” regarding ocean freight in the region, do you pick the “humanitarian” security team and risk losing your cargo and employees and/or be forced to pay a ransom? Or do you pick one that sails under a flag that permits a more proactive and forceful response policy that is presumably more effective?

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