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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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Wednesday, 17 September 14
SHIPPING MARKET INSIGHT - GEORGE LAZARIDIS
Since the onslaught of 2013 the rising tide of asset prices had been primarily driven by the increasing freight market conditions and the improving ...
Tuesday, 16 September 14
INDONESIAN GOVERNMENT DECLARED HBA SUFFERED ANOTHER SETBACK IN SEPTEMBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in September. HBA for ...
Tuesday, 16 September 14
INDONESIAN COAL OUTPUT WON'T EXCEED 421M TONS: GOVT - JP
The government is optimistic that it will meet its coal production target for this year, which caps nationwide production at a flat number compared ...
Monday, 15 September 14
CHINA'S COAL PROPOSALS LEAVE SOME HOPE FOR EXPORTERS - DAILY NEWS
When the best thing you can say about new policies is that they aren’t as bad as they could have been, then you know your industry is in deep ...
Monday, 15 September 14
SUB-BIT FOB INDONESIA COAL SWAP, JANUARY 2015 DELIVERY GAINED DAY ON DAY AND WEEK ON WEEK
COALspot.com: Indonesian coal swaps for average October 2014 increased US$ 0.40 (+0.78%) day on day and US$ 0.55 (+1.08%) per mt week on week. The ...
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- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
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