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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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Sunday, 15 June 14
COAL FREIGHT RATES FALL FURTHER ON LACK OF DEMANDS - CAPT. REDDY
COALspot.com: The BDI softened this week as all segments fell this week. The Panamax sector being most affected. The Cape index was down 3.51 pct w ...
Friday, 13 June 14
US COAL PRODUCTION FELL 3% IN WEEK THAT ENDED JUNE 7, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
Friday, 13 June 14
DRY BULK MARKET KEEPS ON FALLING, DESPITE RESPITE OF THE CAPESIZE SECTOR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on its lacklustre performance overall, with the Baltic Dry Index (BDI) still hovering below the 1,000 point mark. Yest ...
Thursday, 12 June 14
INDONESIA SETS HBA FOR MONTH OF JUNE AT US$ 73.64
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised up first time in last four months the coal bench mark price. ...
Thursday, 12 June 14
HANDY : TA MARKET IS CONTINUING SOUTH WITH A DECREASE OF 26% W-O-W
Handy
The week started off with holidays in most European countries and the TA market is continuing south with a decrease of 26% w-o-w. We do see ...
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- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- PTC India Limited - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
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