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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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Thursday, 14 August 14
INDIA'S PLAN TO START AN INFRASTRUCTURE BOOM AND TO INVEST US$ 1 TRILLION BY 2017 WILL SURELY AFFECT THE DRY BULK TRADE - FEARNLEYS
Handy
The Atlantic Supra market has continued its improving sentiment with rates climbing and TA´s are now up about US$ 900 w-o-w, said Fea ...
Wednesday, 13 August 14
WEEKLY MARKET INSIGHT - KONSTANTINOS KONTOMICHIS SNP BROKER
Being at the peak of the holiday season, August is, as usual, the quietest month in terms of snp transactions, yet it is also a time very critical ...
Wednesday, 13 August 14
INDONESIAN COAL PRICE REFERENCE FALL AGAIN CLOSE TO 57 MONTHS LOWS
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price in August. HBA for the month of A ...
Monday, 11 August 14
LARGEST CHINESE TRADE SURPLUS EVER RECORDED IN JULY - BIMCO
China recorded a trade surplus of USD 47.3 billion in July 2014. The record high surplus came on the back of very strong export growth while import ...
Monday, 11 August 14
INDONESIAN THERMAL COAL SWAPS SEEING SOME POSITIVE TREND
COALspot.com: Indonesian coal swaps for average September 2014 increased US$ 0.20 (+0.36%) day on day and US$ 1.30 (+2.41%) per mt week on week. Th ...
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- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- The University of Queensland
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
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