Driving Efficiencies on the High Seas
How a change in bunker delivery is fuelling performance improvement and reducing costs
By Per Funch-Nielsen
Managing Director
O.W. Icebunker Ltd
If we’re truthful no one particularly likes change. We think we should, because consultants and ‘modernists’ tell us to ‘embrace’ it. The reality is that change is driven, in the main, by necessity; an increase in competition, organizational transformation, a financial crisis like we have recently witnessed, or the evolution of technology that redefines operations and services. And ironically, while scepticism is always the primary emotion, acceptance, belief and conviction always seem to follow.
Within in the shipping industry, the past 12 months have all been about change. While the financial crisis has expedited consolidation, it has also significantly increased competition and intensified the pressure from customers to transport goods faster and cheaper. In response, ship owners and operators have been forced to scrutinize every element of their organizational infrastructure and methods of operation to identify ways of improving services, increasing efficiencies and reducing costs.
One area that has been embraced, particularly by tanker operators, is the methods of purchasing bunker fuel. Accounting for over 50% of a vessel’s overall operating costs, managing bunker fuel procurement is a full time responsibility and a key part of the overall profitability of an organisation. It is interesting that in the past year, many operators, as well as implementing effective hedging and risk management strategies to manage price volatility have also looked at the actual physical method of purchase as another means of increasing efficiencies. This has resulted in a significant increase in high seas bunkering activity in 2009.
For many years, high seas bunkering has been a service traditionally associated with the global fishing fleets, where trawlers, in an industry continually faced with dwindling resources and increased legislation, need all the time they can get to maximise their catches. Coming into port is simply not an option. It is a trend, which is now starting to be utilized by other facets within the industry. O.W. Icebunker, part of the O.W. Bunker Group has seen a significant increase in its customer base over the past year, which now includes tankers, container vessels, bulk carriers and reefers. The company is in the process of deploying another vessel to the Pacific Ocean to meet the increase in demand and to support the barge M/T Otilia, which is already in operation in the region. Central to providing a quality high seas bunkering service, the vessels are double-hulled, with fast pumping rates of 600 cub/hour
ensuring a quick supply of fuel oil, and can provide all grades of quality IFO products up to 380 cst, as well as MGO DMA.
The one common denominator for this change is that all of the new customers have been motivated by the significant efficiency and cost savings that can be generated, as well as the real developments that have been made in high seas bunkering services over the past few years.
For a start, deviating from a route can save days in time that would otherwise be spent sailing to a port, and high seas bunkering is a fast and efficient way to refuel for vessels with time-sensitive cargo, virtually anywhere in the world. There are then the additional costs associated with entering a port, including pilotage, port fees, agency costs as well as tug usage. Finally, high seas bunkering provides a guarantee on product availability, when and where the customers want it. There is no waiting in port for the right product to be made accessible.
The conviction of this move to high seas bunkering has also created the opportunity to dispel any concerns that some of the industry may have had about the service. This is specific to the physical and environmental safety of the actual delivery of products while at sea. The reality is that the methods of delivery can vary depending on the condition of the seas. If calm, the bunker barge can deliver product side-by-side to the tanker, or in rough waters it can be supplied via a stern line; either way, safety is guaranteed. Clearly, the process of building confidence within the industry needs to continue. It is vital that suppliers guarantee the same care and due diligence while at sea as they do in port, not just in health, safety and environmental terms, but also in relation to product quality, where highly skilled crews, as well as on board blending and testing facilities are essential.
There is no doubt that the recent increase in high seas bunkering services is fuelled by, and set in the context of, the global financial crisis. But evidence suggests that while this may have been a catalyst for change, for many operators it is change that will be embraced on a permanent basis, particularly once they have experienced the efficiency and cost benefits.
Ultimately, it is about providing customers with both choice and flexibility, where a bunkering solution can be specifically tailored to meet their operational needs, whatever they may be. High seas bunkering is a good example of this, as well as a highly efficient way of providing operators with an additional option of getting goods to where they need to be, faster, and at a lower cost. And in today’s market, that is a compelling proposition for anyone.
You can learn more about High Seas Bunkering - Just click here
By Per Funch-Nielsen
Managing Director
O.W. Icebunker Ltd
If we’re truthful no one particularly likes change. We think we should, because consultants and ‘modernists’ tell us to ‘embrace’ it. The reality is that change is driven, in the main, by necessity; an increase in competition, organizational transformation, a financial crisis like we have recently witnessed, or the evolution of technology that redefines operations and services. And ironically, while scepticism is always the primary emotion, acceptance, belief and conviction always seem to follow.
Within in the shipping industry, the past 12 months have all been about change. While the financial crisis has expedited consolidation, it has also significantly increased competition and intensified the pressure from customers to transport goods faster and cheaper. In response, ship owners and operators have been forced to scrutinize every element of their organizational infrastructure and methods of operation to identify ways of improving services, increasing efficiencies and reducing costs.
One area that has been embraced, particularly by tanker operators, is the methods of purchasing bunker fuel. Accounting for over 50% of a vessel’s overall operating costs, managing bunker fuel procurement is a full time responsibility and a key part of the overall profitability of an organisation. It is interesting that in the past year, many operators, as well as implementing effective hedging and risk management strategies to manage price volatility have also looked at the actual physical method of purchase as another means of increasing efficiencies. This has resulted in a significant increase in high seas bunkering activity in 2009.
For many years, high seas bunkering has been a service traditionally associated with the global fishing fleets, where trawlers, in an industry continually faced with dwindling resources and increased legislation, need all the time they can get to maximise their catches. Coming into port is simply not an option. It is a trend, which is now starting to be utilized by other facets within the industry. O.W. Icebunker, part of the O.W. Bunker Group has seen a significant increase in its customer base over the past year, which now includes tankers, container vessels, bulk carriers and reefers. The company is in the process of deploying another vessel to the Pacific Ocean to meet the increase in demand and to support the barge M/T Otilia, which is already in operation in the region. Central to providing a quality high seas bunkering service, the vessels are double-hulled, with fast pumping rates of 600 cub/hour
ensuring a quick supply of fuel oil, and can provide all grades of quality IFO products up to 380 cst, as well as MGO DMA.
The one common denominator for this change is that all of the new customers have been motivated by the significant efficiency and cost savings that can be generated, as well as the real developments that have been made in high seas bunkering services over the past few years.
For a start, deviating from a route can save days in time that would otherwise be spent sailing to a port, and high seas bunkering is a fast and efficient way to refuel for vessels with time-sensitive cargo, virtually anywhere in the world. There are then the additional costs associated with entering a port, including pilotage, port fees, agency costs as well as tug usage. Finally, high seas bunkering provides a guarantee on product availability, when and where the customers want it. There is no waiting in port for the right product to be made accessible.
The conviction of this move to high seas bunkering has also created the opportunity to dispel any concerns that some of the industry may have had about the service. This is specific to the physical and environmental safety of the actual delivery of products while at sea. The reality is that the methods of delivery can vary depending on the condition of the seas. If calm, the bunker barge can deliver product side-by-side to the tanker, or in rough waters it can be supplied via a stern line; either way, safety is guaranteed. Clearly, the process of building confidence within the industry needs to continue. It is vital that suppliers guarantee the same care and due diligence while at sea as they do in port, not just in health, safety and environmental terms, but also in relation to product quality, where highly skilled crews, as well as on board blending and testing facilities are essential.
There is no doubt that the recent increase in high seas bunkering services is fuelled by, and set in the context of, the global financial crisis. But evidence suggests that while this may have been a catalyst for change, for many operators it is change that will be embraced on a permanent basis, particularly once they have experienced the efficiency and cost benefits.
Ultimately, it is about providing customers with both choice and flexibility, where a bunkering solution can be specifically tailored to meet their operational needs, whatever they may be. High seas bunkering is a good example of this, as well as a highly efficient way of providing operators with an additional option of getting goods to where they need to be, faster, and at a lower cost. And in today’s market, that is a compelling proposition for anyone.
You can learn more about High Seas Bunkering - Just click here