The Bunkering Operation | Industry Trends

2020 Sulphur Regulations and the Bunkering Industry

The 2020 low-sulphur fuel regulations are expected to ‘shake’ Bunkering Operations and the Bunkering Industry at large in many ways. “There is little doubt within the industry that the cost of compliant fuel will rise” according to Hellenic Shipping News.
It is estimated that the new low-sulphur fuel regulations will increase bunkering fuel cost by approximately 250$ per ton. Major carriers already revise their bunker surcharges, in order to mmoigate the effect of the IMO 2020 sulphur cap (source morethanshipping.com).

Bunkering Credit Lines

The maritime fuel price increase will impact the sufficiency of credit lines for Bunkering Operations. According to Business Times, Banks are expected to tighten credit and carefully control their exposure to the high risk and credit dependent Bunker Industry where lending led to increased losses in recent years. Small and medium size market players will be affected the most. Credit line sufficiency influences the bunkering industry value chain; bunkering suppliers, shipowners and charterers will need to prepare for the challenge.

Smart Bunkering Procedure

Strategic alliances for suppliers and smart bunkering procedures for the demand end will become critical for the Bunkering Industry. The profitability of shipping companies is directly affected by the increase of maritime fuel prices. Increased risk, increases the importance of trust among the bunkering market key players. The tightened credit lines as a result of the general lack of trust will push the market to new buying methods as well as more intelligent decision making tools during the bunkering procedure.

The Bunkering industry looks likely to face troubles for a while until more companies shrink their operations, the outlook for shipping becomes healthier and the regulatory environment clearer; with the role of technology and the ‘democratization of information’ becoming critical.

As the bunker fuel trade patterns change, transparency, consistency and loyalty play a key role for the establishment of a new balance of trust in the bunkering market (source naftemporiki.gr)

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