Bunker Fuel Cost as a vital sustainable tool for Shipping Companies
Bunkering procurement has a direct impact on profitability for shipping companies; with bunker fuel cost exceeding 60% of voyage costs it accounts as the biggest operational expenditure for ship owners and charterers.
The upcoming IMO 2020 environmental regulations will further increase bunker costs, resulting to tighter credit lines and shrinking profit margins for ship owners and ship managing companies. Reducing bunker costs can be a critical step in creating and sustaining competitive advantage.
Achieving bunker cost reductions can be difficult and complex with internal organizational dynamics often hindering cost-reduction initiatives, according to a BCG Bunker Report. Responsibilities for actions that affect bunker costs are typically scattered throughout an organization, both on shore and at sea, and the various teams involved often resist new ways of tackling familiar tasks.
In order for shipping companies to achieve Bunker cost efficiency, the report recommends:
An end to end bunkering optimization strategy to achieve bunkering cost savings and maximize value creation, as well as the careful evaluation of each step of current bunker processes.
Boston Consulting Group: Bunkering Optimization
The strategic BCG bunkering optimization framework comprises of ten elements to be considered, including: Planning, Procurement, Voyage Execution, Charter Value, Technical Efficiency and Fleet Optimization.
With four optimization enablers being:
- Customized tools and lean processes to make efficient operational decisions
- Reviewing of organizational structure to support optimized end to end bunker processes
- Using bunker benchmarking, dashboards and key performance indicators to monitor accountabilities and continuous improvement
- Drive transformation through a rigorous change management program
The Bunkering at Sea e-auctions platform offers an innovative smart Bunker Procurement & decision making tool to maximize bunker value for money through new purchasing initiatives and supplier relations.
Bunkering at Sea is the first integrated independent web-based platform, to provide innovative network solutions for bunkering, through several types of electronic auctions. The platform:
- Optimizes costs for bunker prices for both Suppliers & Buyers
- Reduces administrative costs
- Saves time through simplified and transparent procedures
Securing your competitive advantage with Bunkering at Sea
Bunkering at Sea offers a transparent digital service for cost efficient trading solutions; by freeing up the commodity from the traditional advantage of intermediates in controlling market information and assets.
Supply chain transparency with the aid of an independent digital platform, boosts healthy competition and reduces the risk of being charged higher commissions, other than the necessary fees for bunkering fuel. The platform allows buyers to select who they are purchasing from and sellers to expand their customer base, facilitating the establishment of transparent networks of trust.
It is designed to facilitate day-to-day bunkering business & Long time Bunker contracts while providing flexibility and the ability to manage multiple orders or offers simultaneously. Registered members have access to bunkering transaction history with real time prices for comparison, future reference and record tracking. The platform offers customized statistical analysis tools to support smart business decisions for both ends of the market.
Bunkering at Sea offers clarity, speed, transparency and tracking for all bunkering fuel sales interactions among Ship Owners, Charterers, Suppliers and Brokers.
The aforementioned efficiencies strengthen competitive advantage for both ends of the market, offering a new way to support fast and more accurate business decisions. Through transparent e-auctions and data collection and analysis Bunkering at Sea optimizes bunker costs, supports the establishment of a new performance management culture and accountability procedures within a company & strengthening competitive advantage in a volatile market.
Find out more about the efficiencies of our platform today. Visit our website to request a Demo! Bunkering at Sea