Singapore Is a Good Bunker Market to Be in for the Right Players: Cosulich

Cosulich says coming into the Singapore market would be very difficult.

In addition to generally difficult global market conditions, bunker suppliers in Singapore have to contend with intense competition; nevertheless, it is still a good bunker market to be in for the right kind of players, Fratelli Cosulich CEO Timothy Cosulich has told Ship & Bunker.

Today, many bunker companies are looking to restructure and refocus their efforts to combat seemingly ever decreasing margins, and Adrian Tolson, Senior Partner at 20|20 Marine Energy, recently advised that "physical suppliers need to stay away from major bunkering ports, unless there is a specific niche opportunity."

"From a supplier point of view, coming into the Singapore market would be very difficult. But for those that have invested in know how and people, making sure they have a structure in place to provide outstanding service for their clients, it makes sense to be here," Cosulich told Ship & Bunker.

"Our view is very much to have this kind of people and service oriented business. The commodity is the same for everyone, what makes the difference is the quality of that service, the quality of your tankers and so on."

The recipe is evidently working well for Fratelli Cosulich; the Genoa-headquartered group operates in 15 different countries including Singapore, where for 2016 it climbed to 30th place on the Maritime and Port Authority of Singapore (MPA)'s list of bunker suppliers by volume (but these volumes do not account for deliveries that Fratelli Cosulich did on behalf of oil majors).

The supplier is also investing further in the world's biggest bunkering hub and is introducing an additional bunker tanker (the Luisella Cosulich) in Singapore that is expected to be in operation from next month.

But it hasn't always been plain sailing, Cosulich explains: "We have suffered a little over the last few years, as not everyone has been playing by the same rules. But we have stuck to our plan to provide excellent and reliable service".

"And while bunkering has always been a service business, when prices are high the key concern is always price, not service. This is not the case now, and the market is also more regulated, so the focus has once again returned to service."

One of the most significant recent changes in the Singapore market was the January 1, 2017 introduction of mandatory mass flow meter (MFM) use for MFO bunkering.

Following MPA's announcement over the move in 2014, Cosulich said he hoped it would lead to the port's "second-tier" bunker companies, who were unreliable yet aggressive on price, exiting the market.

Indeed, the number of players in Singapore has fallen sharply from the 77 bunker suppliers licensed in Singapore in 2012, to 58 today - but it's a number that is still considerably higher than in any other port.

"I don't think Singapore needs more new players, but it needs to have healthy competition and the current level of competition is good," said Cosulich.

As for the introduction on MFMs, Cosulich said the transition has been smooth: "Since May 2016, 100 percent of our supplies have been with mass flow meters. So for us, nothing changed in January - it's business as usual."