- Inatech ‘Smart Trader’ aids industry facing $60 billion extra fuel bill from IMO low-sulphur rules in 2020
- Torm, one of world’s leading tanker shipping companies, is among first clients
5thMarch 2019 – As world shipping braces for a $60 billion hike in the industry-wide fuel bill from 2020, help is on its way in the form of a new toolkit that scours the globe in real-time for the optimal bunker ports.
Inatech, a unit of Glencore that specialises in energy trading risk management systems, has built the ‘Smart Trader’ app to enable companies to map their entire fleet of ships and visualise best routes given sea and port conditions to achieve lowest prices for the desired quality of fuel. The toolkit leverages bunker alerts and pricing data from S&P Global Platts, the leading independent provider of information and benchmark prices for the energy and commodities markets. Torm, the tanker company that’s one of the world’s biggest carriers of refined oil products, worked with Inatech on the app’s design and is among the first clients.
The major international shipping companies are investing in technology ahead of the implementation of the International Maritime Organisation’s rules to limit sulphur emissions to 0.5%, from the current ceiling of 3.5%, which come into effect from January 2020. S&P Global Platts Analytics estimates that complying with the IMO’s cap will add $60 billion to fuel costs in 2020.
“Improved technology is vital because the new IMO rules will not only increase costs but could also trigger unprecedented volatility in prices as a widening array of choice between the various fuel oil types skews supply and demand dynamics in what is still a relatively opaque market,” said Inatech CEO Jean-Hervé Jenn. “That motivates our push to broaden the available options for bunker buyers, who will suddenly be immersed in an infinitely more complex market in less than a year’s time.”
With an expected jump in bunker fuel price volatility, Smart Trader enables companies to track their vessels on an integrated system that manages fuel levels on board and updates with live prices and news for supply en route. The interactive platform not only displays which ships in the fleet are running low on fuel but whether their fuel type is compatible with availability and optimal pricing in the direction of travel and, if it’s not, what would be the most optimal rerouting. Potential suppliers are checked for quality and credit references to control counterparty risk.The technology moves the bunker buyer from operational to analytical, continually dissecting and analysing quotes as they’re updated from the full suite of international suppliers.
The app is powered by comprehensive S&P Global Platts data spanning refined wholesale and retail marine fuels including all standard ULSFO, LSFO, IFO, MGO and MDO grades at more than 350 ports worldwide, along with regional indices, 28 day spreads, and moving averages. Smart Trader also includes Platts’ new IMO 2020 compliant 0.5% sulphur cargo price assessments for the ports of Rotterdam, US Atlantic Coast, US Gulf Coast, Fujairah and Singapore, along with intraday news and feature articles to round out a full picture of the global bunker markets.
The app builds on Inatech’s Shiptech platform, which in recent years took bunker trading from Excel spreadsheets and manual tasks to an automated and comprehensive workflow system spanning vessel loading to invoicing.
Specifically, Smart Trader addresses five key risks in the three-month run up to Jan 1, 2020:
1.Market risk (price volatility)
- Integrated vessel tracking to help planning
- Live prices and news
- Plan for each vessel as well as overall fleet
2.Availability of required fuel type at destination port
- System co-ordinates with global suppliers / traders
- Organises bunkering with local availability information
- Anticipates price and availability trends thoughout voyage
3.Ensuring quality control on the array of new fuels
- Manoeuvres through the myriad of new fuels by tracking energy content
- Aids purchase decisions based on energy efficiency considerations, not just price
4.Ensuring fuel compatibility with ships’ tanks
- Maintains fleet level compatibility
- Manages level of fuel on board for planning & awareness
5.How to check counterparty risk (credit)
- Exposure and counterparty tracking
- Analyse overall supplier performance as market changes
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