U.K.-based digital bunker platform ENGINE Online on Tuesday (2 March) reported 150 shipowners now use ENGINE daily. Through their platform, shipowners are pooling together their information on stems to get real-time price benchmarks.
ENGINE is working with a team to develop a bunker procurement tool that is bringing shipowners together for more transparency in the bunker market.
“The bunker market has one big problem and that’s a lack of transparency,” said Ove Munthe-Kaas, ENGINE developer.
Buying bunker fuel has long been an opaque ordeal, said the company. For decades bunker buyers have been in the dark, trying to catch up with scattered and transient information from bunker ports around the world.
Ship operators might spend hours gathering information, calling around to ask for fixing levels seen in Singapore or Rotterdam, and the latest price indications and fuel availability estimates in other ports along the route.
By the time they have gathered all that data, the first part of it might already be outdated, so they will have to start over again to get the latest, it said.
Transparency is important because it balances out some of the information asymmetries in the market. When ships sail into a port or an area it is not trading in on a regular basis, their owners will not be able to benchmark their bunker prices against their peers in real-time. They will not know if their prices are good compared to what other shipowners get.
There is a huge amount of data and bunker market information, more than ship operators can possibly keep up with and make sense of throughout the day. Especially when buying bunkers is only one of a million things to do.
“Unless you are working for a large, very resourceful shipowning company that has focused on generating internal systems that create bunker-related intelligence you will most likely be absolutely blind,” added Munthe-Kaas.
Transparency increases when enough shipowners share anonymised information with each other rather than sticking to their own guns, gambling that they have enough information to buy bunkers at good prices.
Through agreements with five bunker sample testing firms, ENGINE is fed raw fuel quality data that is untouched and directly displayed on the platform. 250,000 bunker fuel samples are inserted every year and growing.
This means that shipowners using the platform have a very good indication of fuel quality in terms of off-specification samples and metrics like calorific content. By going for the fuel with the highest calorific content, ships can sail longer and save $2-3/mt in energy costs against fuel with lower calorific content.
Shipowners share their information either by trading on the platform, or by submitting bunker delivery notes when they fix stems.
“You can improve the calorific value, the kilojoule per gramme of energy you get from a particular stem. Simply put, the bang for your buck,” explained Munthe-Kaas.
If shipowners transact through the platform, the information will automatically be anonymized and displayed on the platform for others to see.
What users will see is the price, a quantity range, at what time of day it was done and how long the delivery time is. They will not be able to see the supplier name, vessel name or even the exact quantity.
Fuel availability statuses are updated for global ports on a regular basis by a team that gathers information from the market and makes sure it’s up to date.
Shipowners and operators that essentially compete with each other every day are now combining their information and knowledge to get the best bunker information.
Photo credit: ENGINE Online
Published: 3 March, 2021
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