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Wednesday, 13 August 14
WHAT DOES PROJECT CARGO REALLY MEAN TO INSURERS?
KNOWLEDGE TO ELEVATE
Richard Kamppari-Baker, claims manager of FP Marine Risks, explains the challenges of project cargo risk assessment from an insurer’s point of view.
Project cargo is the large, oversized, overweight heavy lift cargo or critical pieces of equipment that may be high value or time sensitive and sometimes both. Project cargo insurance covers against loss or damage in transit for critical components of large civil, production facility, infrastructure, and/or construction projects.
Considerations
In addition, there are considerations to be taken into account for Delay in Start up (DSU) and Advanced Loss of Profits (ALOP) against loss of income and profit arising from late or non-delivery of critical components due to an accidental occurrence in transit.
Failure of a shipment to arrive, or not arrive intact, can turn a USD10 million cargo loss into a claim ten times its value when factoring in the knock-on effects of one piece of equipment not being ready at a particular date, which then causes disastrous consequences to the project as a whole. Whilst failure of any cargo to arrive has an enormous impact on operations, for project cargo this has far reaching ramifications.
For this reason the assured look towards insurers to cover the additional economic cost when something goes wrong.
Evaluating risk
Insurers will only compensate the assured for the loss or put it back in the same position. So how does an underwriter even start to evaluate the risk when the consequences are not easily apparent? Project cargo is specifically dependent on transport logistics and tight timeframes, so missing any goal or target will have serious knock-on effects.
To begin a proper assessment of the exposure, a few crucial factors need to be considered. The time and costs for re-fabrication as well as for reshipping the item need to be calculated, which is not an easy task when the bespoke nature of these items is considered.
During this time, insurers will need to calculate the knock-on effects when other goals or targets cannot be met. This means they need to evaluate the loss of profit and/or other operational costs at each stage affected until the project is completed. This is by no means guesswork and there is a complex system involved in calculating each risk.
Appraising the exposure is only part of the problem to insurers because one must consider how to move such an item. Project cargo will most likely be out-of-gauge or exceed regular weight limits, so the question is how the transport is to be done. Moving pylons across muddy roads in India during monsoon season, or loading reactors onto vessels, need the highest level of expertise. The services of engineers, surveyors, mariners, naval architects, consultants and government officials will be required. Careful consideration is essential in deciding who to employ.
Relevant experience
A major factor is to ensure the right people with the relevant experience are chosen. A team of international experts may need to be flown out at each stage of the transit. A key role is an individual who will be in charge of coordinating all communications amongst the team, ensuring all members are properly informed whilst avoiding any misunderstanding whatsoever.
Once the determined route has been scrutinised, the next stage is to ensure all requirements are met. Inland transits often require special authorization or conditions and vessels might need special clearance from their P&I clubs or insurers.
Insurers are very reliant on the assured and other experts to advise on stowage and on whether an item is capable of withstanding the rigours of transit. Items that protrude or carry extreme weights present a huge problem while stationary, but these complications are magnified tenfold when combined with extreme forces of rolling and pitching while in transit.
Calculations need to be carried out by professionals, securing contractors to ensure correct fastenings, buttresses, and so on, are used. Stability during the voyage is essential, so great care is taken to ensure the centre of gravity is evenly distributed.
All the advice from the experts is only as good as Mother Nature permits. A final weather routing will often need to be agreed before the shipment can commence.
No matter how fastidious insurers, carriers, freight forwarders and shippers are, there is a chance that an accident will happen. Claims will of course arise when route surveys are not properly carried out of when stowage of fittings are not adequate.
There will always be unforeseen events that cannot be predicted. The role of the insurer is not to take a gamble on whether a shipment will arrive in time and good order, but to know the risks and eliminate the uncertainties. For project cargo this is critically important, given the high cargo values and the potentially enormous claims involved.
Source: FP Marine / Hellenic Shipping
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Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
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Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
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Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
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- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- The University of Queensland
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Wilmar Investment Holdings
- VISA Power Limited - India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
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