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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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Sunday, 03 August 14
LACK OF COAL SHIPMENTS FROM FAR EAST/SE ASIA, THE PRESSURE ON CHARTER RATES CONTINUED THIS WEEK
COALspot.com: This week, the freight rates were almost flat as charter rates were also almost steady from last week.
The BDI was up by 2.59 pc ...
Friday, 01 August 14
UNCERTAINTY IN ASIAN COAL MARKETS WHERE INDEX-LINKED PRICING DOMINATES - SGX
COALspot.com: In the past 3 years, seaborne thermal coal markets have been in a state of constant oversupply.
Reuters expects this oversupply ...
Friday, 01 August 14
U.S PRODUCED 19.4 MMST OF COAL IN A WEEK, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Thursday, 31 July 14
CAPESIZE: CARGO VOLUMES, COAL IN PARTICULAR, PRESENTLY NOT SUFFICIENT TO EMPLOY A GROWING FLEET - FERNLEYS
Handy
Both the Atlantic and Pacific has improved in the supramax segment over the last week, said Fernleys in Its latest weekly report . There we ...
Thursday, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
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- Mjunction Services Limited - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- PTC India Limited - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
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