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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, 30 June 14
INDO - INDIA FREIGHT RATES CONTINUE TO WEAK
COALspot.com: The latest dry Index shows that average all-in spot freight declined, the Panamax and Supramax slipping by 9.11 percent and 4% respec ...
Friday, 27 June 14
DRY BULK MARKET STILL LOOKING FOR UPSIDE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept up its lacklustre performance during the past week, as evidenced by the course of the Baltic Dry Index (BDI). The BDI ...
Thursday, 26 June 14
PANAMAX : A PACIFIC ROUND PAYS AROUND US$ 3K DAILY - FEARNLEYS AS
Handy
In the Atlantic there has been little activity which again has caused rates to slip across all trades. TA´s are now down to US$ 5,500 ...
Thursday, 26 June 14
KOMIPO INVITES BIDS FOR TOTAL 750K MT OF BITUMINOUS COAL FOR 3CY
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) has issued a new tender for supply of total 250,000 MT of bituminous co ...
Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
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- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- PTC India Limited - India
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- The University of Queensland
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
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