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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, 08 August 14
U.S PRODUCED 35.80 MMST OF COAL IN JULY; UP 7.89 MONTH OVER MONTH
COALspot.com – United States the world's second largest coal producer, produced approximately 19.50 million short tons (mmst) of coal in ...
Friday, 08 August 14
PORT OF NEWCASTLE SHIPPED 19.52% MORE COAL IN JULY FROM LAST MONTH
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped 14,036,947 t ...
Thursday, 07 August 14
SHORT-TERM COAL OUTLOOK IMPROVES - SAM QUEST
With demand for and supply of coal to grow in the near future, prices are expected to rebound in the short term; the long-term prospects, however, ...
Thursday, 07 August 14
BULKING UP IN AFRICA: CHINA INFLATES SEABORNE MINERALS EXPORT TRADE - RICHARD SCOTT
Africa’s profile as an exporter of dry bulk commodities is rising. Responding to growing import demand from China, India and other buyers in ...
Wednesday, 06 August 14
CAPES: BUSINESS INTEREST REMAINS SOFT; CURRENTLY NO SIGNS OF IMPROVEMENT - INTERMODAL
COALspot.com: Despite the considerable pressure witnessed in the freight market for most of the size segments, the Dry Bulk Index was able to note ...
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- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Australian Coal Association
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
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