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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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Tuesday, 26 August 14
GOVT ON TRACK TO LIMIT COAL OUTPUT - THE JAKARTA POST
The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the envir ...
Monday, 25 August 14
4TH ANNUAL FLOATING TERMINALS
4th Annual Floating Terminals
18-20 Nov 2014
Intercontinental Jakarta Midplaza,
Indonesia
Web Site
The Floating Terminal c ...
Monday, 25 August 14
THE BALTIC DRY IS JUMPING, BUT DON'T DRAW ANY BROAD CONCLUSIONS - NASDAQ
Those who consistently preach doom and gloom and see an economic apocalypse around every corner would make me laugh if it weren’t for the fac ...
Monday, 25 August 14
COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX
By Mark Wilcox
Heads of some of the largest coal companies in Wyoming are saying the demise of coal has been exaggerated, though the industry def ...
Monday, 25 August 14
INDO COAL SWAPS W-O-W: NEGATIVE; M-O-M: POSITIVE
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.28%) day on day and US$ 0.65 (-1.19%) per mt week on week. Th ...
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- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
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