Tricks of the Bunker Trade: The Buy Back

by Kaivan H. Chinoy, Petro Inspect / The Bunker Detectives
Tuesday July 18, 2017

The Buy Back is a one of several types of "short delivery" bunkering malpractices - that is, the receiving vessel simply does not get the volume of bunkers that have been paid for. This malpractice could be instigated by the corrupt crew of a vessel or even the barge who may take its chances and ask the Captain, "have you got any spare fuel onboard?"

As usual the victim is whichever party paying the bunker bill.

This malpractice requires that a vessel has an excess of bunkers onboard. Such an excess can come about in any number of ways, for example the vessel might have legitimately experienced lower than expected consumption from favorable weather and/or tidal conditions. Rather than record the actual bunker consumption in its records, the vessel's Chief Engineer will record the expected, higher consumption from the recent voyage(s) and then sell the excess bunkers to a "Buy Back Man."

Alternatively, bunkers could have simply been skimmed off during a couple of previous bunkerings – not caring whether this would register a "deliberate" shortage. An actual example of when we saw this happen was when we were faced with a shortage on a vessel where we were attending the bunker delivery, and it turned out that the barge had supplied the correct amount of bunkers but the Chief Engineer decided to transfer the bunkers from nominated tanks to settling tanks as the bunkering operation was taking place!

The Buy Back: An Example

A vessel arrives at port and is scheduled to receive a 1,000 metric tonne (mt) stem. The difference between the vessel's recent expected bunker consumption (that has been incorrectly recorded in the ship's logs) and the actual consumption means there is an excess of 30 mt of bunkers onboard.

Once the bunkering vessel arrives, the Chief Engineer and the party delivering the bunkers establish that they want to "do business," and then the "Buy Back Man" is called into action, who could be a third party to this bunkering, or they may already be on board the barge, or the barge representative may actually be the buy back man himself.

The bunkering vessel then carries out the stem as normal but only delivers 970 mt of bunkers to the receiving vessel - 30 mt short. However, because the vessel had an unrecorded surplus of 30 mt of bunkers onboard prior to the start of the stem, if the ship were to be inspected at the end of this short delivery it would actually have the correct volume of bunkers onboard as indicated in its records.

During the main bunkering operation, if the Buy Back Man is not already present he will have arrived with his own barge and the 30 mt from the bunkering vessel is then pumped into "Buy Back" barge.

The Buy Back Man then pays the bunkering vessel's crew, ship's Chief Engineer, and any corrupt surveyor involved, for their respective roles in the malpractice. Ultimately the Buy Back Man sails away with 30 mt of bunkers for significantly less than market value.

A less common variation is that the vessel can receive the entire stem and then - perhaps at even a later stage - pump the 30 mt excess to the barge and simply receive money for it. This could happen during the time that the vessel is receiving provisions and spares at the anchorage, where a small barge could discreetly come along side the vessel, who then would pump surplus fuel for cash!

How Can a Bunker Buyer Prevent This Type of Malpractice?

This type of malpractice is difficult to identify as it involves bunkers that are expected to have been consumed, so voyage calculations by the charterer / vessel owner / other party paying the bunker bill would not identify any suspicious activity. At the same time, if the crew of the barge have taken matters into their own hands, the physical supplier they are working for may be completely unaware the malpractice has taken place - after all, the barge leaves and returns indicating the correct volume of bunkers were delivered.

Still, the situation in our example can be averted if there is a trusted experienced surveyor onboard. Our surveyors in different parts of the world have experienced these situations and have been offered bribes to take part in such malpractice. This usually happens behind closed doors in the Chief Engineers's cabin where the barge representative would also be  present, and the barge representative typically tells the surveyor that this is none of his business and that he should look the other way. When we have been faced with this situation our surveyors immediately report this to Petro Inspect head office, where we call the ship operator about the incident unfolding. In one, recent incident, had this not been done, the ship charterer would have lost 50 mt of fuel oil!

While this type of buy back still happens in many parts of the world, since the introduction of mandatory mass flow meter (MFM) use in Singapore we have not come across such an incident. This is because if the delivery took place in Singapore using an MFM and TR48 standards (as is now mandatory for MFO bunkering) then the bunker barge's MFM totalizers would show that correct weight (970 mt, instead of 1,000 mt) was delivered, but the BDN would show 1,000 mt was delivered.

In Singapore, the question would then be whether the MFM is tampered with, but due to severe penalties in place for doing so there is a heavy deterrent in Singapore for these types of malpractice.

Even so, Petro Inspect recommends you always guard against these and all other tricks of the bunker trade and always use a trustworthy bunker surveyor for every delivery.