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