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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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Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
Monday, 28 July 14
Q3' 14, SUB-BIT FOB INDONESIA COAL SWAP GAINED $ 0.08 DAY ON DAY AND $ 0.68 WEEK ON WEEK
COALspot.com: Indonesian coal swaps for average Q3’ 2014 increased by just US$ 0.08 day on day and US$ 0.68 week on week. The swap was lost U ...
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- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
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