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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, 29 May 14
PEABODY ENERGY CHAIRMAN RECEIVES WCA AWARD
The World Coal Association has presented Gregory H. Boyce, Chairman and Chief Executive Officer of Peabody Energy (NYSE: BTU), with the 2014 Chairm ...
Thursday, 29 May 14
HANDY : THE SUPRAS ARE BEING TRADED AROUND 13K FOR SHORTER UPTO 1 YEAR PERIOD
Handy
The week started off with bank holidays in London and very little happening. This trend has continued and we believe it will continue into ...
Wednesday, 28 May 14
THE DRY BULK MARKET REMAINED UNDER PRESSURE - INTERMODAL
COALspot.com: The Dry Bulk market remained under pressure during this past week, with all indices pointing down compared to the previous Friday. Th ...
Tuesday, 27 May 14
PORT OF NEWCASTLE SHIPPED 19.13% LESS COAL THIS PAST WEEK
COALspot.com: In the week ended 07:00 hours 26 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
Monday, 26 May 14
SUB-BIT FOB INDO COAL SWAP Q1' 15 DELIVERIES CLOSED AT US$ 59.40 PER MT
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
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