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