Alix Partners: Some Companies Buy Bunkers Better than Others

by Ship & Bunker News Team
Monday September 29, 2014

Consultants Alix Partners have said that in the race to save costs, bunker spend is a key factor, but some shippers are better than others when it comes to getting the best value for money, JOC reports.

"Some companies buy bunker fuel better than others, because some areas in the world have cheaper fuel than others," said Lim Lian Hoon, Managing Director at Alix Partners in Hong Kong.

"It is about matching those cheaper priced bunkering ports with the networks to take the ships to places where they can fill up with cheaper fuel," he continued.

Some players concentrate on reducing their bunker spend.

Adrian Jones, European Managing Director for Mitsui O.S.K. Lines, recently said that bunkers play the key role in cost management for shippers.

"If we are at the whim of the market in terms of supply and demand, the only other option to returning to profitability is through saving costs, and that principally means bunkers," said Jones.

Over the last two years, Singapore-based NOL Group was reported to have saved $1.2 billion through reducing bunker consumption and improving network management at its liner division, APL, highlighting how significant the savings can be.

"[The savings are] made possible by factors such as improved vessel speed management and the entry of bigger, technologically advanced and highly fuel-efficient ships into the APL fleet coupled with the progressive return of smaller, expensive and less efficient chartered vessels," an APL spokesman said.

"These effectively lifted the APL fleet"s overall fuel efficiency through optimised fuel consumption."

But Lars Jensen, CEO at maritime analysts SeaIntel, says a holistic approach to cost management is necessary to compete at the top level, which means more than just reducing bunker usage.

"This results in a level of complexity where systematic reliance on computer models rather than gut feeling becomes critical," said Jensen.

"In turn, this can only be accomplished by a fundamental shift in mindset within the carriers, a shift wherein Maersk Line appears far ahead of their main competitors," he continued.

Maersk Line is currently seeking to optimise its network through the 2M vessel sharing agreement with Mediterranean Shipping Co..