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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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Monday, 15 September 14
CFR SOUTH CHINA COAL SWAP GAINED DAY ON DAY AND WEEK ON WEEK
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 2.30 (-3.36%) month over month, but increased day on day a ...
Sunday, 14 September 14
FREIGHT RATES RALLY AS DEMAND INCREASED
COALspot.com: The Baltic Dry Index (BDI) is a number (in US$) issued daily by the London-based Baltic Exchange up 2.25 percent week on week. BDI cl ...
Friday, 12 September 14
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 673.3 MMST, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.20 million short tons (mmst) of coal in ...
Thursday, 11 September 14
THE PANAMAX MARKET IS TAKING A BREATHER - FEARNLEYS
Handy
We have experienced more activity in both hemispheres this week, said Fearnleys in this week's weekly report.
"We see rates c ...
Wednesday, 10 September 14
ARE GREEK BANKS ON THE VERGE TO START LENDING AGAIN? - JOHN N. COTZIAS
It is well known that Greek Banks had suffered severely after the economic crisis of 2008. From that period onwards, major changes have occur ...
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- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
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- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
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- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
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