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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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Monday, 29 September 14
INDONESIAN COAL EXPORT VOLUME FALL IN AUGUST
COALspot.com: Indonesia, one of the world's largest coal producers and the global leading multi grade coal exporter shipped around $1.50 ...
Monday, 29 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average November 2014 flat day on day and lost US$ 0.85 (-1.66%) per mt week on week. The swap also lost US ...
Monday, 29 September 14
CFR SOUTH CHINA COAL LOST AROUND 5% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in November 2014 decreased US$ 3.55 (-5.10%) month over month and flat week over week.
...
Sunday, 28 September 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE FIRM NEXT WEEK - CAPT. REDDY
COALspot.com: The freight market shows a bit weak trend this week.
The BDI was lost 2.42% week on week and closed at 1049 points on 26 Se ...
Sunday, 28 September 14
BERAU AGREES DEAL WITH GOVT, MINING AREA REDUCED - THE JAKARTA POST
Coal miner PT Berau Coal, a subsidiary of Jakarta-listed PT Berau Coal Energy (BRAU), has signed a memorandum of understanding (MoU) with the gover ...
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- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- The University of Queensland
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
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