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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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Tuesday, 20 May 14
NEWCASTLE'S COAL EXPORT VOLUME UP 39.11 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 19 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
Tuesday, 20 May 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with sl ...
Tuesday, 20 May 14
DRY BULK MARKET IS BOUND FOR A RECOVERY CLAIMS PARAGON SHIPPING'S HEAD MICHAEL BODOUROGLOU
The dry bulk market is bound for a recovery in the coming weeks, as the market will be better balanced, said Mr. Michael Bodouroglou, Chairman and ...
Monday, 19 May 14
INDO COAL SWAPS FOR AVERAGE Q3' 2014 DELIVERY LOST ON WEEK AND ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
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- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- CNBM International Corporation - China
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Planning Commission, India
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
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