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