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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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Friday, 22 August 14
U.S WEEKLY COAL PRODUCTION UP 2.4% WEEK OVER WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.60 million short tons (mmst) of coal in ...
Thursday, 21 August 14
PREDICTIONS FROM VARIOUS SHIPPERS AND MINING INDUSTRY FOR 2ND HALF YEAR AND ESPECIALLY Q4 IS POSITIVE
Handy
The activity has increased in both hemispheres this week and we see rates edging up on all trades. TA´s are now paying around 8k whic ...
Thursday, 21 August 14
SHIP OWNERS KEEP SHYING AWAY FOR NEW SHIP INVESTMENTS, OVERALL TREND IS DOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have remained in the sidelines of the Sale & Purchasing market for second hand vessels, during most of August, while they also slow ...
Wednesday, 20 August 14
DRY BULK MARKET TO REBOUND IN THE FOURTH QUARTER, OR NOT....- NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The projected rebound of the dry bulk market is still an elusive trend and shipbrokers and analysts are looking to identify the timing of the loomi ...
Monday, 18 August 14
CAPESIZE RATES TO RISE TO MUCH HIGHER LEVELS THIS YEAR - JEFFREY LANDSBERG
COALspot.com: Capesize rates ended last week at $15,561/day, which marked a week-on-week increase of $6,167 (66%). Capesize rates have been a ...
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- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Minerals Council of Australia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
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