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MODERN DAY PIRATES operating from speedboats, armed with automatic weapons and rocket-propelled grenade launchers, attack hundreds of ships a year, stealing equipment, cargo, and entire vessels. They even hold sailors for ransom.

Reversing a three-year decline, pirates attacked 198 vessels in the first nine months of 2007, a 14 percent increase over the same period in 2006. Kidnapping crew members for ransom is a new growth industry. There were 63 cases of ransom through last September, compared with only 20 in the same period in 2006.

Pottengal Mukundan, director of the International Chamber of Commerce’s London-based International Maritime Bureau (IMB), says, “Companies do pay ransoms—there is simply no other way.” Ransoms run to tens of thousands of dollars and owners pay hundreds of thousands of dollars to get pirates to release a ship.

Pirates also sell hijacked vessels to other criminals who operate them as “phantom ships.” Renamed and repainted phantom ships take on cargo at one port and divert it to another. These scams are highly profitable and hard to detect.

Yet pirates do not present the same threat they did a decade ago, when piracy began its resurgence as Western navies scaled back at the end of the Cold War and some developing nations slipped into anarchy. In 2000, the worst year for piracy since 1995, pirates attacked twice as many ships as they do now, even though seaborne trade grows every year.

The number of attacks does not tell the full story. Ships have developed countermeasures and most ward off their attackers or suffer only minor thefts of equipment or personal effects, says Mukundan. For example, ships use fire hoses, floodlights, and sirens to stop pirates.

Some are equipped with powerful acoustic devices that emit waves of deafening noise to deter would-be attackers. Other ships are surrounded by nonlethal electrifying fences, which emit 9,000-volt pulses to deter boarders. Ships also carry tracking devices to counter hijackers.

The Straits of Malacca, located between Indonesia, Malaysia, and Singapore—one of the world’s worst piracy hotspots—has come under better control, thanks to closer cooperation among the bordering countries’ navies. “With the very positive action by the countries involved, attacks have declined dramatically,” says Mukundan. In 2004, the IMB was notified of 38 incidents in the straits. There were just four through September 2007.

But piracy is rife in Nigeria, Tanzania, and especially Somalia, which lacks any form of government. Pirates operating in the seas off these countries account for nearly all the serious incidents reported to the IMB, and they are heavily armed, vicious, and determined.

Somalia and Nigeria are the world’s most dangerous areas for shipping. An IMB report says that in Nigeria, “attacks appear to be orchestrated by a few local groups claiming their actions are in pursuit of political goals. Offshore supply vessels and their crew are frequently identified as potential targets for kidnap and ransom, although cargo ships have also been targeted.”

Somali pirates now range hundreds of miles offshore and even operate from mother ships that cruise shipping lanes. The IMB advises vessels not to enter Somali ports and to stay at least 200 miles clear of Somali waters. Pirates have attacked as far as 315 miles off the coastline.