Choong Sheen Mao, Director of Singapore bunker supplier Equatorial Marine Fuel Management Services Pte Ltd (EMF), on Tuesday (6 October) shared the company’s outlook on the impact of Covid-19 for the Singapore and international bunker markets.
He also explained steps taken to establish EMF’s brand as a trustworthy company at the 21st edition of Singapore International Bunkering Conference, also known as SIBCON 2020.
Coming a long way as a home-grown brand, EMF currently operates a fleet of 19 bunker tankers, three floating storage terminals and supplies a monthly bunker volume of 450,000 metric tonnes at Singapore port.
Covid 19: Reversible and irreversible outcomes for the bunker industry
Shortening credit terms:
Increased uncertainty in relation to credit risk in the bunker industry due to Covid-19 related problems, has caused many shipowners to be concerned about shortening credit terms. In the past, the normal credit term was 30 days, but now it’s not uncommon to see a request for 15 days or cash in advance.
Pre-Covid-19, a crew change could be done within two or three days. Now, shipowners will have to plan two to three months in advance. In fact, crew change has become a critical factor in considering which port to bunker at. It has caused operational expenditure to increase as shipowners now have to consider which ports to divert to in order to facilitate crew change.
Shipowners prefer ports with MFMs:
EMF has observed shipowners now prefer ports which enforce the use of mass flow meters (MFM) such as Singapore. The company has received reports that because of Covid-19 related restrictions in other ports, shipowner’s surveyors, or owner’s representative are not allowed to go onboard ships during bunkering. As a result, ship owners and bunker suppliers can only rely on the figures reported by the ship’s crew.
With an MFM in place, one would be relying on figures provided by the mass flow meter, which is a neutral machine, and thus the industry finds it more to be more transparent and reliable.
De-globalisation is a very real issue and a side effect of Covid-19 related lockdowns. This does not mean international trade will come to a halt, but rather that trade patterns will pivot towards regionalisation. Shipowners will now have to plan differently and consider how to divert vessels, bunkering ports, and even the amount of bunkers to procure.
Higher trade barriers:
Smaller bunker suppliers and traders are going to face much higher trade barriers due to shrinking credit lines provided by banks. So, what happens next? More consolidation in the market is expected as banks look to reduce their exposure in the current environment.
EMF sees trust between industry stakeholders as one of its core values as a company. The following are some steps taken by EMF to increase transparency and accountability to establish confidence in its brand:
A series of SIBCON 2020 related articles have been earlier written by Manifold Times:
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Related: SIBCON 2020: TR 48 reaps annual savings of at least SGD 80 million for bunkering sector
Related: SIBCON 2020: Singapore introduces new MFM bunkering standards SS 660 and TR 80
Related: SIBCON 2020: Powering Fuels of the Future, Driving towards Decarbonisation
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Related: VPS: Shipowners face ‘tricky situation’ to balance VLSFO shelf life and wax appearance temperature
Related: VPS: Big data analysis reveals link between Covid-19 and spike in low flashpoint MGO off-spec cases
Related: Interview: Total Marine Fuels Global Solutions discusses sector growth, IMO 2020, and future plans
Related: SIBCON 2020: Evolution to a ‘completely different’ bunkering industry event, says organiser
Related: Singapore: SIBCON 2020 bunkering event to be hosted virtually
Photo credit: SIBCON 2020
Published: 7 October, 2020
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