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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, 18 May 14
FREIGHT RATES ARE EXPECTED TO BE FIRM NEXT WEEK
COALspot.com: The freight market was steady with the BDI was closed slightly higher at 1027 points or up 3.00 pct week on week.
The Cape ...
Friday, 16 May 14
KOMIPO IS LOOKING FOR 60K MT OF LOW VOLATILE BITUMINOUS COAL
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 60,000 Metric Tons (MT) of low volatile bitumi ...
Friday, 16 May 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 18.9 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Thursday, 15 May 14
PANAMAX : SHORT PERIOD UP TO ONE YEAR REPORTED IN THE 12.000-12.500 RANGE - FEARNRESEARCH
Handy
The Supra and handy market seems to be affected by the recent holidays in Singapore which still relatively quiet. There are some Indo / ...
Thursday, 15 May 14
USA COAL CONFERENCE
Press Release: IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Coal USA Conference, June 18-20, 2014, ...
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- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
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