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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, 18 August 14
SUB-BIT FOB INDONESIA COAL SWAP CLOSED AT $58.60 FOR SEPTEMBER 2015; UP $4 FROM SEPTEMBER 2014 CLOSING
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.27%) day on day and US$ 0.75 (-1.36%) per mt week on week. Th ...
Monday, 18 August 14
CFR SOUTH CHINA COAL SWAP PERFORMED WELL THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.45 (+0.66%) day on day and US$ 0.30 (+0.44%)&nbs ...
Saturday, 16 August 14
HIGH DEMAND OF IRON ORE SHIPMENTS PUSHED CAPE INDEX UPWARDS
COALspot.com: This week's freight market was buoyant with Cape and panamax index seeing a big jump pushing the BDI above 1,000 points week on c ...
Friday, 15 August 14
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
5TH ANNUAL POWER AND ELECTRICITY INDONESIA
13-16 October 2014
Grand Hyatt Jakarta, Indonesia
Web Site
The country’s definitive ...
Thursday, 14 August 14
U.S. STEAM COAL IMPORTS REMAIN DOWN SHARPLY FROM HISTORIC HIGH IN 2007, SAYS EIA
COALspot.com: U.S. steam coal imports at power plants have fallen significantly from their peak level of more than 30 million tons in 2007 to less ...
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- MS Steel International - UAE
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- PTC India Limited - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
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