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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, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low p ...
Tuesday, 08 July 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN IN JULY; LOST 1.62%
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia again revised down the coal bench mark price in July. HBA for month of J ...
Tuesday, 08 July 14
ENERGY IN THE MIX - INTERMODAL SHIPBROKERS
With the Tanker freight market having showed much promise this year compared to the performance that had been noted during the previous five, it is ...
Monday, 07 July 14
INDONESIA STATE-CONTROLLED COAL MINER BUKIT ASAM TO TRADE COAL ON-LINE THROUGH JFX
COALspot.com: Indonesian state owned coal miner PT Tambang Batubara Bukit Asam Tbk (PTBA) has teamed up with Jakarta Futures Exchange (JFX) to sell ...
Monday, 07 July 14
RBCT, THE WORLD'S SINGLE LARGEST EXPORT COAL TERMINAL SHIPPED 31.91 MMT OF COAL IN H1 2014
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the world’s single largest export coal terminal, shipped 31.91 million ton ...
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- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Economic Council, Georgia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- The University of Queensland
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- PTC India Limited - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
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