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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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Monday, 25 August 14
API 8 CFR SOUTH CHINA COAL SWAP GAINED DAY OVER DAY AND MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for delivery in September 2014 increased US$ 0.30 (+0.44%) day on day and decreased US$ 0.20 (- ...
Sunday, 24 August 14
SEA FREIGHT MARKETS STARTING TO LOOK POSITIVE; CAPES DRIVE FREIGHTS HIGHER
COALspot.com: The freight market has strengthen further this week with BDI up 7.19 pct week on week. The BDI was closed at 1,088 points while the B ...
Friday, 22 August 14
INDIAN IRON ORE ROYALTY RISE NOT LIKELY TO HURT STEELMAKERS' MARGINS - FITCH
Fitch Ratings does not expect an increase in India's iron ore royalty rates to have a major impact on the profitability of steel producers in t ...
Friday, 22 August 14
ARBITRATION CLAUSE IN LOU HELD TO REPLACE CHARTERPARTY ARBITRATION CLAUSE
KNOWLEDGE TO ELEVATE
The Claimants had claims for cargo damage against the vessel Owners arising under four bills of lading. The vessel was th ...
Friday, 22 August 14
ICAP ENERGY LAUNCHES GLOBAL COKING COAL DERIVATIVES TRADING
First contract completed and cleared on CME
COALspot.com: ICAP Energy, the energy business of ICAP plc, announces today that it has successful ...
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- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
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