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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, 12 June 14
CONSOLIDATION IS THE ' NAME OF THE GAME' WHEN IT COMES TO SHIPYARDS ACROSS ASIA - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Intense competition, a swelling of new greenfield shipyards over the past few years mainly in China, especially prior to the 2008 global financial ...
Wednesday, 11 June 14
INDONESIA'S COAL EXPORT VOLUME AND REVENUE SLIPS 2.75% AND 6.73% RESPECTIVELY IN APRIL
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.8* b ...
Wednesday, 11 June 14
BPI TOUCHING A NEW LOW FOR THE YEAR
The Dry Bulk market closed off the week positively, on the back of firming Capesize rates, while the market overall continues to face a very challe ...
Monday, 09 June 14
GOVT GETS TOUGH ON ILLEGAL MINING, SUSPENDS LICENSES - THE JAKARTA POST
The government has temporarily suspended the licenses of 62 mineral and coal transportation companies as part of its efforts to curb illegal mining ...
Monday, 09 June 14
INDO SUB-BIT COAL SWAPS FOR Q3,Q4 OF 2014 AND Q1 2015: LOST ON DAY AND MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 continue last week’s trend or lost on day, week and on month according to Asia ...
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- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Australian Coal Association
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
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