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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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Tuesday, 26 August 14
GOVT ON TRACK TO LIMIT COAL OUTPUT - THE JAKARTA POST
The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the envir ...
Monday, 25 August 14
4TH ANNUAL FLOATING TERMINALS
4th Annual Floating Terminals
18-20 Nov 2014
Intercontinental Jakarta Midplaza,
Indonesia
Web Site
The Floating Terminal c ...
Monday, 25 August 14
THE BALTIC DRY IS JUMPING, BUT DON'T DRAW ANY BROAD CONCLUSIONS - NASDAQ
Those who consistently preach doom and gloom and see an economic apocalypse around every corner would make me laugh if it weren’t for the fac ...
Monday, 25 August 14
COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX
By Mark Wilcox
Heads of some of the largest coal companies in Wyoming are saying the demise of coal has been exaggerated, though the industry def ...
Monday, 25 August 14
INDO COAL SWAPS W-O-W: NEGATIVE; M-O-M: POSITIVE
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.28%) day on day and US$ 0.65 (-1.19%) per mt week on week. Th ...
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- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
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