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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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Sunday, 07 September 14
FREIGHT MARKET CONTINUED TO BE FIRM IN SPITE OF CAPE'S THIS WEEK'S WEAK PERFORMANCE
COALspot.com: BDI up by 0.7 pct week on week and closed at 1155 points this week. The Baltic Dry Index is a composite of three sub-indexes that mea ...
Sunday, 07 September 14
SHIPMANAGERS SUPERVISION CONTRACT FOR NEWBUILDS - BIMCO
Shipmanagers are frequently called upon by their owner clients to supervise newbuilding projects on their behalf. The scope of the manager’s ...
Saturday, 06 September 14
SLOW COAL EXPORT REGISTRATION RAISES CONCERNS - THE JAKARTA POST
Several coal mining companies have yet to receive the go-ahead from the Energy and Mineral Resources Ministry to obtain exporting licenses, leading ...
Saturday, 06 September 14
DRY BULK MARKET'S PROSPECTS ARE IMPROVING, DESPITE WEAK SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been rebounding during the past month, with the Baltic Dry Index (BDI) ended the week on a high note, reaching 1,155 points ...
Saturday, 06 September 14
INDONESIA WANTS TO REGULATE COAL DEALS - THE TELEGRAPH INDIA
Indonesia has raised concerns about suspected coal deals struck between overseas buyers and its unregistered domestic miners, the telegraph India r ...
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- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
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