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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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Saturday, 27 September 14
OIL MARKET CONTANGO: SPECULATION ON FUTURE PRICES CAN BE A RISKY MOVE, EVEN FOR TANKER OWNERS HELLENIC SHIPPING NEWS
Despite the fact that tanker owners can easily use their vessels as floating storage units for oil, in a bid to exploit the current oil market dyna ...
Saturday, 27 September 14
MORE COAL MINERS AGREE TO AMEND CONTRACTS - THE JAKARTA POST
The Energy and Mineral Resources Ministry is in a rush to beat a deadline for the conclusion of numerous memorandums of understanding (MoUs) with t ...
Friday, 26 September 14
INDIA SUPREME COURT RULING TO HIT STEEL, UTILITY EARNINGS, SAYS FITCH
COALspot.com: The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative f ...
Friday, 26 September 14
U.S WEEKLY COAL PRODUCTION FELL 1.8% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.80 million short tons (mmst) of c ...
Friday, 26 September 14
ORACLE SIGNS EPC FRAMEWORK AGREEMENT WITH SEPCO FOR COAL MINE AND POWER PLANT IN PAKISTAN
COALspot.com: Oracle Coalfields PLC, the UK developer of a lignite coal mine and power plant in the south-eastern Sindh Province, Pakistan, has ann ...
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- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Australian Coal Association
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Latin American Coal - Colombia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
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