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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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Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
Wednesday, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
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- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Australian Coal Association
- Singapore Mercantile Exchange
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- The University of Queensland
- ASAPP Information Group - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PTC India Limited - India
- Mjunction Services Limited - India
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
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