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