Denmark’s BunkerTrust is looking to shake up the bunker industry by bringing to it an unprecedented level of transparency.
Founded in 2017 by Daniel Kampmann, a CEO and partner in a dry bulk owner/operator, BunkerTrust seeks to achieve two core aims. One is to make the bunker industry more transparent – and we do that by giving companies the tools to get additional insights into the industry. The second, he says, is to change the incentives in the industry.
“At present, the industry is so non-transparent that it is actually [of] benefit to be one of the bad guys. Our mission is to change the incentives, so that the suppliers instead benefit from being one of the good guys and there is a better correlation between the price and the complete service being delivered.”
“BunkerTrust is in essence a rating platform,” Kampmann continues, likening it to the travel-focused TripAdvisor website. “The main difference is that we don’t just collect ratings, we also collect timings, quantities, quantities and compare all these parameters with the market prices and benchmark [them] against the market. Another difference is that we can validate the data by ensuring that the physical delivery of the product has actually taken place.”
Consequently, BunkerTrust enables users to enjoy a higher degree of transparency that in turn results in more fact-based procurement. “Again, if we are taking the TripAdvisor example, I don’t think that anyone would book a hotel room online without checking the ratings from previous guests first. So, with ratings we actually enable a new purchasing model for bunker procurement, which is not only based on gut feelings and relations but is also based on aggregated data from other bunker purchasers.”
“The system works as an integration platform,” Kampmann says, explaining that as such BunkerTrust can be integrated with the bulk of existing enterprise resource planning (ERP) and bunker purchasing systems. “When a bunker stem has been made in either of these systems, we send a confirmation to the receiving vessel. On the date of bunker delivery, we send a rating questionnaire to the vessel, which they can complete online on the platform or off-line in a special form,” he says.
BunkerTrust then collects, validates and collates all submitted data to provide a complete picture of the shipowner’s bunker deliveries, identifying such criteria as inter alia the best supplier, the best bunker barge, the most efficient port and the highest quality deliveries. This data can then be compared with the aggregated data from all other BunkerTrust users.
And with “the cost of marine fuel [constituting] a great part of the total cost associated with shipping”, it is perhaps unsurprising that “customers always want the best product at the best price”. However, as Kampmann observes, “the problem when ordering bunkers is that the best price is not necessarily the lowest price”. Rather, “many factors come into play” when evaluating price, such as place, terms, availability, timing and pricing trends.
On top of this, there are also less obvious issues, such as waiting times, pumping times and the likelihood of disputes. Furthermore, if a shipping line has a corporate social responsibility (CSR) policy in place, there will arguably be the need to ensure that the bunker barges delivering to its vessels adhere to certain standards of safety, environmental protection and documentation.
“One of the issues is that the customers might know who the contractual partner is (i.e. supplier/trader), but often they don’t know if it is the physical supplier who supplies the vessel and which barge is actually coming alongside the receiving vessel. Therefore, it is hard to take the necessary actions to mitigate risks [and] minimise waiting time,” he says.
“The suppliers’ performance (the perceived value by their customers) is reflected by the performance of their entire value chain down to the point of delivery, i.e. barge operators and bunker barge crew,” Kampmann states. “Hence, it is essential that the subcontractors are also motivated to deliver the best possible service to the customer.”
“So, if it is crucial for suppliers to get the best subcontractors, is there then a way for the suppliers to ensure that they get the best performing barges – the ones who come on time, allow the crew on the receiving vessel to board the bunker barge (to do soundings, etc), who communicate about delays and deliver the agreed quantity/quality product?”
“[The] reality is that the customers in many cases know very little about their counterparts and the barges delivering to their vessels and the same is actually often the case with traders and suppliers. In our opinion, the bunker industry could really benefit from a higher degree of transparency, both for the sake of the bunker industry [and] also for the sake of the customer.”
And when it comes to achieving this transparency, Kampmann reports that BunkerTrust, which currently has “35 registered shipowner/operators, about 400 rating vessels, almost 4,000 ratings and about 1,000 suppliers/traders in [its] database”, is “completely free” for shipowners and operators to use. “We do not charge for the use, for the integration or for the intelligence the system provides,” he states.
“Most users ask me how BunkerTrust makes money. The short answer is, we don’t. So in my opinion, if you are a shipowner or vessel operator, if you procure bunkers for your own or chartered vessels or even if you don’t buy the bunkers because you charter out your vessels, I see absolutely no reason not to use BunkerTrust,” he says. “It will give you a lot of intelligence and the more that use the system the better the incentives the suppliers and barges have to provide a better overall product and service.”
More information can be found on the BunkerTrust website here: http://bunkertrust.com/