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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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- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- ASAPP Information Group - India
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