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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, 22 September 14
COAL SECTOR CHAOS - GENESIS TO REVELATION - DIPESH DIPU
COALspot.com: “Let there be light”, intends the government of India but the fuel side of the story paints a blackout. The recent Suprem ...
Monday, 22 September 14
CFR SOUTH CHINA COAL SWAPS LOST ON DAY, WEEK AND MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 3.10 (-4.50%) month over month and $ 0.95 PT MT week over ...
Monday, 22 September 14
INDONESIAN COAL SWAPS LOST WEEK ON WEEK AND MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for average October 2014 increased US$ 0.35 (+0.69%) day on day and lost US$ 0.30 (-0.58%) per mt week on week. ...
Sunday, 21 September 14
CAPE INDEX LOST 17% W-O-W ; BALTIC DRY PLUNGES 106 POINTS
COALspot.com: This week the freight market softened a bit compared to last week.
BDI fell 8.97% week on week and closed BDI at 1075 points on ...
Friday, 19 September 14
U.S. WEEKLY COAL PRODUCTION RELATIVELY FLAT AT +0.1% - EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.20 million short tons (mmst) of coal in ...
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- SMC Global Power, Philippines
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- PTC India Limited - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
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