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