Fuel accounts for 50% of the total cost of operating a ship.
That is a significant cost item for any business and in any other business such costs would get the attention of senior management. Yet in the shipping industry such responsibility often lies in the hands of bunker buyers. And for many buyers purchasing fuel is still handled manually using spreadsheets.
Why is this a significant oversight for management?
Let’s take a simple example to illustrate the potential amounts involved. If an operator has just one ship – annual fuel costs are now around $2.4m. This is based on a ship using 40 tonnes of fuel a day, being at sea for an average of 200 days and fuel costing $300 a tonne. Expand that example to say 20 ships and annual fuel costs rise to $48m.
That’s a lot of money and a big responsibility to leave in the hands of bunker buyers alone.
Add to that cost the fact that fuel purchasing is often a manual process. Include the increased risk of human error when managing fuel purchasing manually. And the potential risks to business should errors occur increases.
Senior management support is essential for bunker buyers
However involve senior management in the fuel procurement process and immediately responsibilities are shared. But this is just the start. Buyers have access to decision makers, who can approve investment in the kinds of fuel procurement technologies that transform manual processes, streamline operations, drive efficiencies, reduce fuel costs and at the same time make fuel procurement easier for the bunker buyer.
Digitization transforms manual fuel purchasing and delivers operational efficiencies.
There are many fuel procurement systems on the market. These offer operators the chance to automate processes and transform the way bunker procurement works across the company.
One product currently on the market is Shiptech. Shiptech is Inatech’s cloud-based bunker fuel management system. Shiptech gives bunker buyers access to tools and systems that ensure they can buy the highest quality of fuel at the lowest price.
The product is easy to use. It also takes the complex operations of fuel procurement from spot RFQ, fuel quality and quantity discrepancies management, claims or ECA compliance and streamlines them into easy to use Shiptech applications that provide a seamless buyer experience.
Act now to manage your rising fuel costs
Faced with more regulations (IMO2020 is now in operation) and by relying on manual fuel purchasing processes, ship operators and more specifically bunker buyers, could see one of their biggest cost items, fuel, getting costlier.
However by elevating fuel purchasing to a senior management level and taking the strategic decision to invest in smarter digitized bunker procurement technology, operators will ensure they have the processes and systems in place to deliver a ‘future proof’ fuel procurement strategy.
Inatech can help
Inatech can help bunker buyers and management look at fuel procurement more strategically. They can also tailor solutions to meet different business needs. For more information or to book a Shiptech demo click here.