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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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Thursday, 28 August 14
PANAMAX: OWNERS CAN GET AROUND USD 16000 FOR A FRONTHAUL; PERIOD MARKET - VERY QUIET - FEARNLEYS
Handy
The activity and sentiment is improving in the Atlantic with the general TA rate is up about US$ 800 w-o-w. We see more South American carg ...
Thursday, 28 August 14
BANPU REPORTS HIGHER FIRST-HALF YEAR RESULTS FOR 2014
COALspot.com: Banpu Public Company Limited (BANPU) reports higher first half-year financial results for 2014 having its gross profit increasing 3 p ...
Wednesday, 27 August 14
FREIGHT MARKET: IS THE MARKET IN A RECOVERY MOOD? - GEORGE ILIOPOULOS
Is the market in a recovery mood?
August is typically a time when the shipping industry takes it easy… charter-ers book their requireme ...
Tuesday, 26 August 14
4TH ANNUAL ASIA NICKEL
4th Annual Asia Nickel
19-20 Nov 2014
Grand Hyatt Jakarta, Indonesia
Web Site
Asia’s Premier Nickel Conference
Regulation in ...
Tuesday, 26 August 14
DESPITE LOW DRY BULK RATES, BULKER PRICES ARE STILL HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, August tends to be a month of slow activity in the sale and purchasing market and this year has been no exception. However, as shipb ...
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- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Minerals Council of Australia
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- The University of Queensland
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- White Energy Company Limited
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Parliament of New Zealand
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