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