Chief Shipping Analyst at BIMCO, Peter Sand on Tuesday (6 October) discussed some key dynamics and trends that he feels will emerge in the bunker industry moving forward, considering how Covid-19 related problems have changed the economic landscape, while providing advice on how to stay competitive in such an environment.
A new business dynamic: trustworthy relationships and hassle-free bunker procurement:
“I think that many of the new dynamics in the marine fuel sector will be led by the hubs and supported by local authorities,” shared Sand.
Sand added that while Singapore is the world’s largest bunkering hub and is a leader in its own way, it also faces many of its own issues and thus “in the bunkering and shipping industry, it isn’t always hassle free to go buy bunkers anywhere in the world”.
Moving forward, Sand sees the element of trust as a key value proposition that bunkering businesses can embrace if entities were to integrate it into their existing system.
He adds that trust is such an inherent part of the new business dynamic that shipowners and operators could see more returns shifting away from chasing that extra dollar of discounted price to investing in a solid relationship with the bunker supplier instead.
If a mutual trustworthy relationship is built into the system, shipowners can then avoid the hassles that come with bunker procurement because they can trust the counterparties.
What is the potential consolidation among suppliers and traders?
Looking at how the industry is composed today, large independent distributors take up the lion’s share, the majors second, and then the small independent ones, believes Sand.
Bearing in mind the fuel quality issues with low sulphur fuel, everyone is seeking: a competitive price, high quality and ensure availability on a global scale; this is something not always available from small independent distributors.
Moving forward, Sand observes that any consolidation trends will be a diminishing of small independent distributors, and an effect of this trend is to develop higher reliability in the industry.
Peter Sand’s top three tips on how to stay competitive are:
A series of SIBCON 2020 related articles have been earlier written by Manifold Times:
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Photo credit: SIBCON 2020
Published: 7 October, 2020
Seeking bunker claim from 13 unpaid invoices; seven under Term Sales Contracts entered on 30 April 2020 and six under Spot Contracts, according to court documents obtained by Manifold Times.
The representative was providing clarification to a query from Manifold Times when asked if the bunkering licenses of the Hin Leong Trading affiliated company have been permanently revoked.
Patrizia Cosulich becomes first bunker tanker in Singapore to undertake its Mass Flow Meter extension test using the Master Mass Flow Meter, learns bunkering publication Manifold Times.
Bunker claims totalling SGD 628,000 for 88 deliveries of marine gas oil between the period of 7 February 2020 until 15 April 2020, according to documents obtained by Manifold Times.
Event welcomed over 1,100 attendees from 42 countries; delegates visited virtual booths about 4,800 times; while around 5,800 connections were made, according to data from organiser Informa.
Bunker suppliers and bunker craft operators may choose to carry out meter verification using either existing MIMO method OR with the use of a Master Meter.