2020 U.S. Truckload Market Forecast: Q1 Coyote Curve Update
Cockett Marine Oil Platts 2015
1. Marine Fuel Solutions
Cockett Marine Oil Group | www.cockettgroup.com Tel: +971 44 255 100 | Fax: +971 44 255 111 | Email: dubai@cockett.com
Platts European Bunker Conference
Rotterdam
May 2015
Chris Turner
Group Technical Manager
The Quantity Conundrum
Is it enough to be price competitive ?
3. Quantity : Navigating Stormy Seas
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• Bunker Cost– Even with drop in Crude
Bunker costs remain significant cost for a
shipper
• Freight rates continue to be under pressure
due to global slowdown – no sign of light at
the end of the tunnel.
• Buyer challenged to make savings – but is
it really a saving?
• Suppliers under pressure, Cash is King !
• Importance of bunker purchasing knowledge
• Action required
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4. Shipping industry remains in difficulties
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ECA seeing no benefit to reduction in Crude and
corresponding fall in Bunker Prices
Spectre of modal shift (in ECA’s) remains
Brent crude recovering somewhat in recent weeks
Dry Bulk sector remains in real difficulties
On 18 February 2015 the Baltic Dry Index* reached the historic low of 509
BDI (an assessment of the price of moving major raw materials by sea)
ARA LSFO v MGO
5. Challenges
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Buyer
• Individual performance is often benchmarked to spot market
• Continually challenged and measured on getting lowest price
• Often role is not solely purchasing, Training
• Bigger picture of aftermath often left with Operations, Technical, Vessel.
Supplier
• CIA or short credit v credit offered, financing costs, late payments
• Highly competitive enquiries driven by pressures from buyer
• Extra costs, Equipment, Bunkers, Surveyors, Testing, Compliance
• It is not unknown that supplier be selective in offering basis history of vessel
• Margins very small for such a high value commodity
Reality
• Volume measurement not exact science
• Reality is issues do occur
• Apparent distrust on both sides
6. Reality
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Control measures needed to protect position on all
sides
Appointment of surveyors, “Expense ?”
Clear instructions including requirements if/when a
dispute occurs
Better to resolve volume dispute at time than investigate
retrospectively
Date/Time stamped Photographic evidence especially
for Cappuccino
Cost of a density determination well worth paying to
check for simple shortlift discrepancies
Balanced view required : 221 B Surveys and their
results tell another story
7. Added Value
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Training of buyers into critical aspects of bunker purchase procedures
Day to day guidance with buyer in full knowledge
Supplier has been vetted, GTC’s negotiated
Port Knowledge / Limitations have been considered
Vessel histories via IMO No.
Recommendation / Appointment of BQS surveyors
Technical support : Assisting in investigation when (not if) a problem occurs
8. Trader Perspective
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At this time it is a sad fact that it is only enough to be price
competitive
Forces will
draw buyer
to lowest
price
Rose tinted
spectacles
instead of
facing
realities
Reactive
rather than
proactive
nature
But someone has to deal with the fall out!
9. Conclusion
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Quantity
discrepancies
remain a
minefield the
industry is yet
to escape
from
Vicious circle
will remain as
long as price
is key
Added value
should make a
difference but
sad fact is
“price rules”
Regulation
(Singapore
etc) on the
horizon may
signal change
Care needed
to protect
interests and a
reality check
needed
