Kannegaard joined Monjasa in 2017. Image Credit: Monjasa
Bunker supplier Monjasa is working on a project to bring greater transparency to marine fuel supply chains.
After working on its own internal compliance procedures for the past four or five years, the company has in 2019 developed a plan to work with other parties on making the industry more data-driven and transparent through digitalisation, according to Mikkel Kannegaard, Monjasa's general manager in Copenhagen.
"We're trying to find a new way of doing things and then make that a new standard," Kannegaard said in an interview with Ship & Bunker Friday.
"We want to drive digitalisation with the aim of openly sharing more data and increasing transparency -- not to take away the personal business, which is important in our industry -- we're just trying to find smarter ways of working.
"I think it's fair to say shipping is not the most proactive industry when it comes to digitalisation and having more automated processes."
"I think it's fair to say shipping is not the most proactive industry when it comes to digitalisation and having more automated processes, and that's where we think there are some opportunities."
Kannegaard argued increased use of digital processes could save time and raise accountability in the industry.
"It's a very manual, workload-intensive process to do a delivery, with a number of different documents going back and forth, a number of different email correspondences and phone calls," he said.
"There's a lot of room to improve that process through digitalisation, and gain more trust because it's clear who's doing what at what time.
"Why are we still having physical BDNs on board the ships, and we cannot invoice the customer until we get a copy of it from the ships -- which sometimes takes several days?
"There's not really an ability from the customer's point of view to follow the process flow; they know they've made an order, but they're not really sure how things are going until they get the thumbs up from the receiving vessel that everything's been completed in good order."
Better tracking of the supply chain could also help companies to avoid accidental breaches of sanctions.
"At Monjasa, we have positive experiences with introducing end-to-end digital processes to be better at screening our counterparties to make sure we're upholding the sanctions that we trade under, and we don't get into situations where we accidentally break those because we didn't know who in fact we were trading with on the other side," Kannegaard said.
"The large shipping companies with solid procurement functions have a good view of the market, but smaller ones might not always have a good idea of what's going on in this market and who is it really that they're being supplied by.
"You may have four or five parties in a transaction, which can make it difficult to see who they're dealing with."
Having better knowledge of the supply chain may also help buyers to avoid quality problems when buying very low sulfur fuel oil from an unfamiliar supplier.
But getting a comprehensive view of every component that has been blended into the fuel is unlikely to be feasible any time soon, Kannegaard said.
"Whether we can ever get truly through the whole supply chain from where the oil was pulled out of the ground or the sea, I don't know.
"In a business like ours you have blends and all kinds of things that blur the picture as you go along, so I'm not sure how far back we'll realistically be able to go."