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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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Saturday, 30 August 14
INDIAN GOVERNMENT SHOULD TAKE NOTICE: THERMAL COAL IMPORT PRICES EXTREMELY LOW - COMMODORE RESEARCH
COALspot.com: Both Indonesian and Australian thermal coal prices are at the lowest levels seen this decade, with Indonesia's monthly benchmark ...
Saturday, 30 August 14
RECOVERY IN SIGHT FOR THE DRY BULK SHIPPING MARKET - DREWRY SHIPPING CONSULTANTS
Despite weak freight rates so far this year, Dry Bulk shipping earnings are forecast to recover as demand for both major and minor bulk commodities ...
Friday, 29 August 14
U.S. WEEKLY COAL PRODUCTION DROPS 1.3 PERCENT, EIA SAYS
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Friday, 29 August 14
ADARO'S PROFITS SINK FURTHER AMID FALL IN COAL PRICES - JP
Adaro Energy, one of the country’s largest coal miners, has reported a 31 percent drop in net profit in the first half of this year as global ...
Friday, 29 August 14
CHINESE LIGNITE IMPORTS: QUANTITY OVER QUALITY? - CLARKSONS
In the first half of 2014, Chinese seaborne coal imports declined 0.4% y-o-y to 148mt, largely reflecting a 3.3% fall in imports of steam coal. Mea ...
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- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Australian Coal Association
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- The University of Queensland
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- London Commodity Brokers - England
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
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