Norden: Bypassing Bunker Traders is Possible, but Not Practical

Norden says it has reduced its trading volume by more than 50 percent since the collapse of OW Bunker.

Andres Borella, Sernior Bunkers Manager at Norden A/S says that while it is possible to bypass the bunker trader, in his opinion it is not practical to do so.

"In this changing market, we as a shipowner have had more focus on traders than ever before," Borella told delegates gathered last week in Singapore for SIBCON.

"We fully understand and respect the role of the trader and the value they add to us as a shipowner and buyer."

That value may come in terms of better pricing, more knowledge and experience in certain geographical areas, or better terms compared to going direct to the physical supplier, he explained.

The potential risks of working with traders was brought to the fore following the 2014 collapse of OW Bunker, which Borella noted has left some buyers facing the prospect of double, or even triple payment for bunkers bought through the intermediary.

And while Norden clearly still sees the value in using traders, Borella said the prospect of such risk means his company has reduced its trading volume by more than 50 percent since the collapse of OW Bunker, and today only works with financially strong traders.

"We do spend a lot of time determining how they are financed, and what are their financial agreements with the banks," he said.

"We always ensure the trader and broker don't have more links between them and the eventual supplier. It's all about minimising the risk and cutting down the length of the chain to a minimum."

Borella also stressed the need for fair terms and conditions and highlighted the BIMCO Terms as an example where there was equal balance between buyer and seller.

"It is important to know where you stand before a problem arises, and not after when it's too late," he concluded.