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