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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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Friday, 23 May 14
DRY BULK NEWBUILDING CANCELLATIONS COULD HELP SUPPORT MARKET IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's demise over the past few months maybe has come as a surprise to many, but analysts and shipbrokers are looking forward to ...
Thursday, 22 May 14
HEAR SUCCESSFUL CASE STUDIES FROM 10 INDEPENDENT UNCONVENTIONAL GAS OPERATORS
Unconventional Gas Asia 2014 will provide a unique opportunity for Asia’s unconventional gas leaders to share their experience and expertise ...
Thursday, 22 May 14
CNPC-GAZPROM DEAL A MEDIUM - TERM POSITIVE FOR CHINA'S GAS SECTOR
Fitch Ratings says a 30-year deal in which Russia's OAO Gazprom (BBB/Negative) will supply gas to China National Petroleum Corporation (CNPC; A ...
Thursday, 22 May 14
CAPESIZE : RATES ARE STILL UNDER PRESSURE
Handy
A quiet start into the week in Far East, some fresh Indonesian coal order in the market. For trips within S.E. Asia, Supras are trading aro ...
Wednesday, 21 May 14
SHIPPING: MARKET INSIGHT - GEORGE LAZARIDIS
The recent revision by the OECD of its global growth forecast has sparked a debate as to the potential outcome these new figures will have on seabo ...
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- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
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