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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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Monday, 25 August 14
API 8 CFR SOUTH CHINA COAL SWAP GAINED DAY OVER DAY AND MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.30 (+0.44%) day on day and decreased US$ 0.20 (- ...
Sunday, 24 August 14
SEA FREIGHT MARKETS STARTING TO LOOK POSITIVE; CAPES DRIVE FREIGHTS HIGHER
COALspot.com: The freight market has strengthen further this week with BDI up 7.19 pct week on week. The BDI was closed at 1,088 points while the B ...
Friday, 22 August 14
INDIAN IRON ORE ROYALTY RISE NOT LIKELY TO HURT STEELMAKERS' MARGINS - FITCH
Fitch Ratings does not expect an increase in India's iron ore royalty rates to have a major impact on the profitability of steel producers in t ...
Friday, 22 August 14
ARBITRATION CLAUSE IN LOU HELD TO REPLACE CHARTERPARTY ARBITRATION CLAUSE
KNOWLEDGE TO ELEVATE
The Claimants had claims for cargo damage against the vessel Owners arising under four bills of lading. The vessel was th ...
Friday, 22 August 14
ICAP ENERGY LAUNCHES GLOBAL COKING COAL DERIVATIVES TRADING
First contract completed and cleared on CME
COALspot.com: ICAP Energy, the energy business of ICAP plc, announces today that it has successful ...
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- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Planning Commission, India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- The University of Queensland
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Australian Coal Association
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
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