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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, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered ab ...
Tuesday, 22 July 14
INDONESIAN ELECTION RESULT ENCOURAGING FOR FOREIGN INVESTMENT IN ENERGY AND MINING SECTORS - WOOD MACKENZIE
Joko Widodo-Jusuf Kalla has been announced as the official winner of Indonesia's presidential election. Joko Widodo, or Jokowi, is viewed as a ...
Tuesday, 22 July 14
THE CURRENT COAL PRICES ARE UNPROFITABLE FOR MINERS; COAL PRICES WILL GRADUALLY INCREASE - FITCH
COALspot.com: The Fitch Ratings expect the benchmark Newcastle coal prices (currently at about USD70/MT) to gradually increase.
Fitch's la ...
Tuesday, 22 July 14
SUB-BIT FOB INDONESIA COAL Q3' 14 DOWN 5.21%; Q4' 14 DOWN 3.56%; Q1' 15 DOWN 4.75% M-O-M
COALspot.com: Indonesian coal swaps for average Q3’ 2014 flat on day, weak week on week and on month according to AsiaClear OTC coal swap' ...
Tuesday, 22 July 14
INDONESIA'S MINERAL EXPORT BAN: CHINA UNDER PRESSURE? - CLARKSONS
In January 2014, Indonesia introduced new regulations on exports of unprocessed minerals. Exports of some minerals have been heavily taxed, whilst ...
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- Eastern Coal Council - USA
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- PTC India Limited - India
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
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