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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, 30 August 14
INDIAN GOVERNMENT SHOULD TAKE NOTICE: THERMAL COAL IMPORT PRICES EXTREMELY LOW - COMMODORE RESEARCH
COALspot.com: Both Indonesian and Australian thermal coal prices are at the lowest levels seen this decade, with Indonesia's monthly benchmark ...
Saturday, 30 August 14
RECOVERY IN SIGHT FOR THE DRY BULK SHIPPING MARKET - DREWRY SHIPPING CONSULTANTS
Despite weak freight rates so far this year, Dry Bulk shipping earnings are forecast to recover as demand for both major and minor bulk commodities ...
Friday, 29 August 14
U.S. WEEKLY COAL PRODUCTION DROPS 1.3 PERCENT, EIA SAYS
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Friday, 29 August 14
ADARO'S PROFITS SINK FURTHER AMID FALL IN COAL PRICES - JP
Adaro Energy, one of the country’s largest coal miners, has reported a 31 percent drop in net profit in the first half of this year as global ...
Friday, 29 August 14
CHINESE LIGNITE IMPORTS: QUANTITY OVER QUALITY? - CLARKSONS
In the first half of 2014, Chinese seaborne coal imports declined 0.4% y-o-y to 148mt, largely reflecting a 3.3% fall in imports of steam coal. Mea ...
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- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- ASAPP Information Group - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
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