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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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Monday, 28 July 14
S. KOREA'S KOSPO SEEKS 148K T OF 4700 NAR COAL
COALspot.com: Korea Southern Power Co Ltd (KOSPO) is seeking 148,000 tonnes of 4,700 kcal/kg NCV steaming coal for shipment between October to Nove ...
Monday, 28 July 14
CFR SOUTH CHINA COAL SWAP SLIGHTLY UP WEEK ON WEEK
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. The swap for Q3, Q4 and Q1 2015 showing slight improvement ...
Sunday, 27 July 14
RAMADAN HOLIDAYS IN INDONESIA PUTTING PRESSURE ON CHARTER RATES FROM INDONESIA - VISTAAR INDIA
COALspot.com: The freight rates were almost steady as very slight improvement in BDI by about 1 pct. The BDI was at 739 points after improvin ...
Saturday, 26 July 14
COAL MINING COMPANIES CLOSED TEMPORARILY - THE JAKARTA POST
The Sarolangun regency administration in Jambi has suspended the operations of 10 coal mining companies in line with a circular issued by Regent Ce ...
Friday, 25 July 14
U.S WEEKLY COAL PRODUCTION UP AROUND 3.5% WEEK ENDED JULY 19
COALspot.com – United States the world's second largest coal producer, produced approximately 19.00 million short tons (mmst) of coal in ...
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- Kumho Petrochemical, South Korea
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- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
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- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
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- Australian Coal Association
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- AsiaOL BioFuels Corp., Philippines
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- Thai Mozambique Logistica
- Commonwealth Bank - Australia
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- Mercuria Energy - Indonesia
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- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
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- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
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- Parliament of New Zealand
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- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
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- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
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- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
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- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
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- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
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- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
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- The University of Queensland
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- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- MS Steel International - UAE
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- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
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- White Energy Company Limited
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- Indonesian Coal Mining Association
- Economic Council, Georgia
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- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
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- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
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- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
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