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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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Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
Monday, 28 July 14
Q3' 14, SUB-BIT FOB INDONESIA COAL SWAP GAINED $ 0.08 DAY ON DAY AND $ 0.68 WEEK ON WEEK
COALspot.com: Indonesian coal swaps for average Q3’ 2014 increased by just US$ 0.08 day on day and US$ 0.68 week on week. The swap was lost U ...
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- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
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