Inside Opinion: Bunker Credit Management - Champagne and Oysters at the Casino

The bunker traders with good credit teams spend a fortune doing it right. They have established track records in pro-actively looking at counterparty risk, assessing it and making the best decisions for the company. They are commercially aware, diligent and agile. The good ones are so good at what they do that the trading teams value them as major allies in their drive to make money, rather than treating them with suspicion as potential deal-stoppers. The top credit managers are revenue generators as well as risk mitigators.

Credit management is playing the averages. It is not an exact science, though the analysis and modeling done behind the scenes most certainly is. If you give out hundreds of millions of dollars in credit to hundreds of counterparties worldwide sometimes based on decisions you had to take in 30 seconds validity with the trader screaming at you over the telephone, or a couple of glasses of bubbly to the good at an evening function with a failing phone battery, you probably won't get it all back. That's a fact of life.

If you eat oysters every day one day you'll get a bad one. You cut down the odds by taking steps to ensure it is less likely; you refrigerate them properly, you buy them fresh, you buy them from a reputable dealer, you sniff them first once you've shucked them, you take all reasonable steps just like a credit manager does with the enquiries he/she has on the table. But one day you'll get a bad one. You may have a feeling as it goes into your mouth that something isn't quite right. Or you may find out later. If you eat oysters every day, one day you'll have a bad one. Its life.

The good bunker companies do not adopt a punitive approach when things go wrong. They analyze and see where the failure point was, see if processes can be tweaked to cover it, claim on credit insurance and move on.

If things have worked as planned all that is left is a sense of bad luck. You lie awake in bed and you go through what you could have done differently, but sometimes there just isn't. You and your team did everything you could and there is no accounting for human mistakes, bad fortune, poor timing or dishonesty of people who deliberately deceive. You can't beat the house, as they say.

If the bunker traders are the poker players in the bunker casino, believe me the credit managers are playing blackjack. Not roulette.