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