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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, 11 August 14
SGX CFR SOUTH CHINA COAL SWAPS DIRECTION HEADING TO NORTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.50 (+0.74%) day on day and US$ 1.55 (+2.33%)&nbs ...
Monday, 11 August 14
A TALE OF TWO TRADES - EVA TZIMA
COALspot.com: It has without a doubt been “a cruel, cruel summer” for the Dry Bulk market so far and with second hand values still stan ...
Sunday, 10 August 14
FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com: This week the BDI and other segments saw some improvements. The BDI increased by 3.46 pct week on week and closed at 777 points.
...
Friday, 08 August 14
MINING DISPUTE IS CRIPPLING LOCAL ECONOMIES IN EASTERN INDONESIA - JG
- By Iwan Harsono -
It seems as if there’s no end in sight to the series of negotiations between the government and mining companies about ...
Friday, 08 August 14
CAPESIZE RATES ARE REMAINING MORE OR LESS UNCHANGED AT BOTTOM LOW LEVELS - FEARNLEYS AS
Handy
An improving sentiment with stronger rates and fair demand for prompt tonnage in the Atlantic, both on the Continent and in the Med for the ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Planning Commission, India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
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