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