GoAGT failure sparks worries other shipboard guard firms will go bust

THE demise of maritime security firm, Gulf of Aden Group Transits (GoAGT), has raised questions whether the closure will bring about the total collapse of the industry or market consolidation.

Following media reports that the company had gone bust, leaving personnel stranded and unpaid, there have already been repercussions among other service providers as clients inquire over their ability to continue in business.

Another UK security firm, Ambrey Risk, said clients had asked about its financial security. Ambrey Risk managing director John Thompson said he does not expect GoAGT to be the only one to go.

Continuing financial struggles of some shipowners, coupled with the apparent success in curbing piracy off the Gulf of Aden, has led to carriers becoming less fearful than they were.

The result is a price war between security firms as shipowners look for cheaper services.

Another said there could be a total market collapse. "Views as to whether this is the entire armed guard bubble bursting, or simply a slight deflation, vary," he said.

Port agents that help in getting guards on and off a vessel and through a country could also add to the pressure on security firms. Most agents work on credit, and with a fear of other firms closing, they may call in debts.