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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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Thursday, 14 August 14
INDIA'S PLAN TO START AN INFRASTRUCTURE BOOM AND TO INVEST US$ 1 TRILLION BY 2017 WILL SURELY AFFECT THE DRY BULK TRADE - FEARNLEYS
Handy
The Atlantic Supra market has continued its improving sentiment with rates climbing and TA´s are now up about US$ 900 w-o-w, said Fea ...
Wednesday, 13 August 14
WEEKLY MARKET INSIGHT - KONSTANTINOS KONTOMICHIS SNP BROKER
Being at the peak of the holiday season, August is, as usual, the quietest month in terms of snp transactions, yet it is also a time very critical ...
Wednesday, 13 August 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN CLOSE TO 57 MONTHS LOWS
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price in August. HBA for the month of A ...
Monday, 11 August 14
LARGEST CHINESE TRADE SURPLUS EVER RECORDED IN JULY - BIMCO
China recorded a trade surplus of USD 47.3 billion in July 2014. The record high surplus came on the back of very strong export growth while import ...
Monday, 11 August 14
INDONESIAN THERMAL COAL SWAPS SEEING SOME POSITIVE TREND
COALspot.com: Indonesian coal swaps for average September 2014 increased US$ 0.20 (+0.36%) day on day and US$ 1.30 (+2.41%) per mt week on week. Th ...
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- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- VISA Power Limited - India
- Australian Coal Association
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
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