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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, 05 September 14
U.S. PRODUCED 19.2 MMST OF COAL LAST WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.20 million short tons (mmst) of coal in ...
Thursday, 04 September 14
PUNJAB STATE POWER CORPORATION LIMITED OF INDIA HAS DECIDED TO BUY IMPORTED COAL - HINDUSTAN TIMES
COALspot.com: The Punjab State Power Corporation Limited (PSPCL) has decided to buy imported coal to run its thermal plants, as reported by Hindust ...
Thursday, 04 September 14
INDONESIAN COAL MINERS MAY GET MORE TIME ON ROYALTIES - FITCH RATINGS
COALspot.com: Fitch Ratings says that coal miners in Indonesia are likely to get more time to repay the government the royalties that were set off ...
Thursday, 04 September 14
INDONESIAN COAL SWAPS SLIDE THIS PAST WEEK
COALspot.com: Indonesian coal swaps for average October 2014 decreased US$ 0.90 (-1.68%) day on day and US$ 1.80 (-3.31%) per mt week on week. The ...
Thursday, 04 September 14
CAPESIZE : SENTIMENT REMAINS POSITIVE FOR Q3/Q4 - FEARNRESEARCH
Handy
The Atlantic market has experienced more activity this week. Rates for TA´s are up about 8% w-o-w, much lead by an increasing number ...
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- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Anglo American - United Kingdom
- Parliament of New Zealand
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
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