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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, 07 September 14
FREIGHT MARKET CONTINUED TO BE FIRM IN SPITE OF CAPE'S THIS WEEK'S WEAK PERFORMANCE
COALspot.com: BDI up by 0.7 pct week on week and closed at 1155 points this week. The Baltic Dry Index is a composite of three sub-indexes that mea ...
Sunday, 07 September 14
SHIPMANAGERS SUPERVISION CONTRACT FOR NEWBUILDS - BIMCO
Shipmanagers are frequently called upon by their owner clients to supervise newbuilding projects on their behalf. The scope of the manager’s ...
Saturday, 06 September 14
SLOW COAL EXPORT REGISTRATION RAISES CONCERNS - THE JAKARTA POST
Several coal mining companies have yet to receive the go-ahead from the Energy and Mineral Resources Ministry to obtain exporting licenses, leading ...
Saturday, 06 September 14
DRY BULK MARKET'S PROSPECTS ARE IMPROVING, DESPITE WEAK SECOND QUARTER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been rebounding during the past month, with the Baltic Dry Index (BDI) ended the week on a high note, reaching 1,155 points ...
Saturday, 06 September 14
INDONESIA WANTS TO REGULATE COAL DEALS - THE TELEGRAPH INDIA
Indonesia has raised concerns about suspected coal deals struck between overseas buyers and its unregistered domestic miners, the telegraph India r ...
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- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Parliament of New Zealand
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- The University of Queensland
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
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