The COVID-19 pandemic has hit the oil industry and bunker suppliers hard – the sudden drop in oil demand and the collapse of the oil price has put additional pressures on an industry already suffering low profitability and unpredictable demand.
COVID-19 adds to market volatility
Bunker suppliers now have to operate in a market where:
- Managing product demand and supply is now more complex than ever before.
The IMO regulations introduced at the beginning of 2020 triggered a huge shift in the type of product sold. Now with COVID the unpredictability of supply and volatility of oil prices make predicting supply and demand more difficult.
- New entrants with a sophisticated approach to business makes competition tougher.
Even before COVID the bunker supply business was becoming more like the global oil market with new entrants bringing a more sophisticated way of supplying bunkers. That competition has simply intensified and the ability to react quickly to changing market dynamics will be critical.
- Credit is scarcer/ more difficult to secure.
Getting credit was hard enough, now having accurate up to date business information and strong supplier/customer relationships will be key otherwise sourcing credit could prove challenging.
- Existing internal systems need to manage a changing business landscape.
The reality is that with COVID business is so much more complex and suppliers need the ability to anticipate and match supply and demand better and faster. They need to manage credit and liquidity more effectively. Have reporting in place to handle inventory right across the supply chain. Need to allocate costs and monitor the profitability of operations in real-time. If existing systems lack the flexibility to handle these requirements then any competitive advantage is lost.
A new way to sell bunkers
Dealing with these risks, handling last minute bunkering requests and managing the additional financial requirements needed to meet the changing marketplace is going to require a behavioural change in how bunkers are sold. Suppliers will need to think carefully about how, where, when and what they sell. They’ll also need the support of agile systems, access to real-time data across the supply chain and tools that effectively streamline and manage the complete end-to-end bunker operation.
Bunkertech ETRM – not a business as usual decision support platform
Bunkertech ETRM is a fully integrated energy, trading and risk management decision support platform. It provides bunker suppliers with the latest technologies, tools, workflows and applications needed to run their entire end-to-end bunker supply business, even during the additional disruption caused by COVID-19, managing everything from PnL, risk, inventory and sales to trading, operations and finance.
Bunker suppliers – manage inventory, operations & cash flow, real-time with Bunkertech ETRM.
To find out how Bunkertech ETRM can help you operate in today’s volatile and unpredictable markets download Inatech’s latest product brochure or contact us to discuss your requirements in more detail.