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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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- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
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