Søren Høll, CEO of KPI OceanConnect, one of the world’s largest and most experienced independent marine energy service and solutions providers, on Thursday (8 October) shared his views on the digital transformation of the bunker marketplace.
“The rise of digitalisation coupled with the need for decarbonisation means every aspect of the bunker industry’s operating model will be challenged over the next three decades,” said Høll.
“I think digital platforms will be able to compliment bunker trading by reducing hassle and increasing accountability; but nothing can replace the human factor and the relationship between customer and supplier.”
Søren notes that digitalisation in the bunker industry is seen in two main areas: voyage management systems and bunker management platforms.
Voyage management systems allow for tracking the efficiency of current voyages as well as planning of future voyages. Bunker management platforms allow for price comparison, verifying bunker availability, optimisation for consumption and more.
Pros of Digitalisation
Bunker management platforms could have a digital procurement assistant that offers an automated request for quotes, where suppliers are invited to bid via systems, and these usually include features that streamline the bunker procurement process, according to Høll.
These platforms usually keep a record of the flow of documents for auditing and price benchmarking which would eventually create better accountability in the industry and provide banks with the necessary assurance to facilitate trade.
These platforms can also handle very detailed and complex calculations along with large volumes of data which sometimes humans might have difficulty to calibrate.
Cons of Digitalisation
Most digital systems for bunkering and shipping, however, are developed separately so the data of a single company would not be in sync and stored across multiple platforms, he notes, while adding consolidation of all information could be a tedious step, so hopefully there will be solutions designed for this in the future.
However, what digital bunker procurement platforms do not offer is the human factor. The human factor covers local and regional expertise in ports areas where there is a partnership approach and clients can build long standing relationships with physical suppliers.
Further, the bunker market is a dynamic business and there are a lot of changes at any given time. A platform cannot provide soft information on market price developments, provide flexibility in terms of changing bunker quantities, while managing other various operational constraints.
Are current platforms ready for deployment?
Though restrictions exist, there are currently some platforms that are already available in the market, and in some cases, they allow users to be open to a total transformation of the current procurement process, shares Høll.
For example, some platforms require suppliers to agree to respond to offers in a timely offer when a request for a quote is sent out. However, this is not always possible, and suppliers may be reluctant to use the platform. This means a situation exists where there are genuine buyers but the flow for the procurement process is not in place.
Additionally, there are many platforms and systems being developed right now but most of them are working parallel rather than collaborating, he notes, while stating the development could create a lot of gaps or crossovers as progress is being made.
“I definitely believe we will be able to work more efficiently, much leaner, and be able to add value in a better way as we move towards digital solutions in the marketplace,” states Høll.
“However, the human factor is a key dynamic in the industry and we should leverage that to create better digital solutions moving forwards.”
Photo credit: SIBCON 2020
Published: 12 October, 2020
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