Physical fuel suppliers need to fundamentally transform the traditional models of supply in order to survive, according to Adrian Tolson, Senior Partner at the 20|20 Marine Energy maritime consultancy.
peaking ahead of SIBCON 2018, the industry’s largest bunkering conference, Tolson said that he believed that, as margins continued to dwindle, suppliers needed to look ahead to not only a post 2020 world, but also beyond as the industry’s requirements to deliver sulphur compliance converge with regulatory pressure and targets to reduce GHG emissions from shipping.
He argued that they must also utilise developments in technology,
and access to data and intelligence to create sophisticated, and relevant models for the future marine energy supply chain.
“Physical suppliers need to break out from the traditional model of solely delivering huge quantities of commodity in traditional large bunkering hubs with small margins as a means of hopefully staying in business and making a living;
it is a negative downward spiral that will lead to insolvency. Even the current trend of looking for niche higher margin markets will be challenged and are not solutions to even medium-term sustainability. And any windfall profits for physical suppliers post 2020 will be short-lived, with the main beneficiaries being the large commodity players, which will lead to a quick return to declining margins.
They must understand that the marine energy supply chain is fundamentally transforming, and they need to not just stay ahead of the curve, but show leadership by driving it, as there are opportunities for those that can lift their heads and be visionary,” said Tolson.