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