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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, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely avail ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
Monday, 14 July 14
SGX CFR SOUTH CHINA COAL SWAP FOR Q3' 14 LOST 17.29% SINCE EARLY JANUARY 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. API 8 CFR South China Coal swap for delivery in Q3 drops U ...
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- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- ICICI Bank Limited - India
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- The University of Queensland
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Minerals Council of Australia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
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