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