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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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Friday, 22 August 14
U.S WEEKLY COAL PRODUCTION UP 2.4% WEEK OVER WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.60 million short tons (mmst) of coal in ...
Thursday, 21 August 14
PREDICTIONS FROM VARIOUS SHIPPERS AND MINING INDUSTRY FOR 2ND HALF YEAR AND ESPECIALLY Q4 IS POSITIVE
Handy
The activity has increased in both hemispheres this week and we see rates edging up on all trades. TA´s are now paying around 8k whic ...
Thursday, 21 August 14
SHIP OWNERS KEEP SHYING AWAY FOR NEW SHIP INVESTMENTS, OVERALL TREND IS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have remained in the sidelines of the Sale & Purchasing market for second hand vessels, during most of August, while they also slow ...
Wednesday, 20 August 14
DRY BULK MARKET TO REBOUND IN THE FOURTH QUARTER, OR NOT....- NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The projected rebound of the dry bulk market is still an elusive trend and shipbrokers and analysts are looking to identify the timing of the loomi ...
Monday, 18 August 14
CAPESIZE RATES TO RISE TO MUCH HIGHER LEVELS THIS YEAR - JEFFREY LANDSBERG
COALspot.com: Capesize rates ended last week at $15,561/day, which marked a week-on-week increase of $6,167 (66%). Capesize rates have been a ...
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- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Australian Coal Association
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- The University of Queensland
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
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