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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, 10 July 14
SGX EXPANDS ACROSS THE BULKS WITH NEW COAL PRODUCTS
COALspot.com: Singapore Exchange (SGX) is expanding its bulk commodity derivatives offering by launching new coking and thermal coal products on 4 ...
Thursday, 10 July 14
HANDY: SMALL INCREASE; PANAMAX: POSITIVE TONE; CAPESIZE: PAPER VALUES REMAIN WEEK
Handy
It is a general increase in activity in both hemispheres whereas rates have just experienced a small increase. In the Feast we see stable a ...
Wednesday, 09 July 14
SHIP INVESTMENTS ARE TRENDING LOWER
Most ship owners are deeming current ship prices on the high side, refraining from making serious commitments in new acquisitions or newbuilding or ...
Wednesday, 09 July 14
INDIAN GOVERNMENT ADVISED POWER UTILITIES TO INCREASE COAL IMPORTS
COALspot.com: The government of India has advised power utilities to increase coal imports to meet fuel shortages and those that have fuel supply p ...
Wednesday, 09 July 14
PANAMAX MARKET FINALLY CORRECTING UPWARDS; AVERAGE TC MORE THAN DOUBLING WEEK ON WEEK - INTERMODAL
The Dry Bulk market has closed off on Friday on a more positive note, with most segments noting weekly gains and the Panamax market finally correct ...
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- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Australian Coal Association
- Ministry of Mines - Canada
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- White Energy Company Limited
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
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