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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, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely avail ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
Monday, 14 July 14
SGX CFR SOUTH CHINA COAL SWAP FOR Q3' 14 LOST 17.29% SINCE EARLY JANUARY 2014
COALspot.com: Coal price falling is continues as the impact oversupply and lower demand. API 8 CFR South China Coal swap for delivery in Q3 drops U ...
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- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- PTC India Limited - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Planning Commission, India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Parliament of New Zealand
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