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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, 23 June 14
COAL SWAPS DROPS FURTHER MONTH ON MONTH ON WEAK DEMAND
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 6.91 percent month on month and closed at US$ 69.00 per mt a ...
Sunday, 22 June 14
THE PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA SLIPPED THIS WEEK
COALspot.com: The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell slightly on Friday ...
Friday, 20 June 14
DRY BULK MARKET LOOKING FOR UPSIDE ON ROBUST SEABORNE IRON ORE TRADE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn’t been able to justify the heightened expectations this year. Yesterday, the Baltic Dry Index managed to inch forwar ...
Friday, 20 June 14
US WEEKLY COAL PRODUCTION DROPS 1.8% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
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- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
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