Disintermediation and What Technology Can NOT Do for the Bunker Industry

Paul Hardy has taken on Business Development role with Nautical Supply International in the UK.

Disintermediation. The buzz word at the moment which, roughly translates as "who can I cut out of the loop and take a % of their profits". This is always going to be a tough sell to an industry that prides itself on personal relationships. There seems to be a flurry of companies promising to save millions/billions through disintermediation.

It is no secret that I have stuck my toe in the technology side of bunkering. My first platform aimed to allow suppliers when long on product to market product off the market to a select pool of buyers. This was born from experience as a trader whereby I made my largest profits when a supplier was 'long' and I could offer discreet volume as a trading house. The platform was designed for a specific reason and was open to brokers, buyers and suppliers alike.

I then turned my attention to the other burning issues which are, transparency and compliance. I created a platform to capture data in a transparent way and to create an audit trail for individual enquiries. This platform has its value in the data it stores and how it can be analysed.

With both platforms the idea was to solve a specific problem rather than change behaviour as a whole. With such an opaque market and need for credit there will always be a place for traders to provide liquidity to some customers and for brokers to manage and clarify the supply chain. As such, I see the need for technology to add value by simplifying and making more transparent some elements of the supply chain.

To use an analogy, we as individuals are happy to go online and buy a book which will be delivered quickly, efficiently and with easy remedy if it needs to be returned. To buy bunkers wholly online is to buy a book without knowing the title or if the last page has been removed. This is why we need human interaction. In my view technology can be used to show you are buying the right book at the right price but the human interaction makes sure you are happy after you have finished reading it.

We also cannot hide away from the suspicion within the market of the motives of tech start ups. There is a common belief that many tech companies, funded by venture capital, with a short term outlook will sell to the first buyer that knocks on there door.  There is thus a perceived risk over potential ownership of the data produced by the various platforms. If tech is to work it needs to be in long term and preferably neutral ownership. Otherwise, platforms need to be segmented for the different users so data is not held in the same place. This is of course deeply unattractive for any short term investor.

This brings me back to disintermediation. A couple of months ago an old friend sent me a photo from 2000 when we were both fresh faced and relatively new to the industry. It was taken in an Indian restaurant in Cape Town.  It made me smile and think......... what is it that I love about this business? For me it came down to the personal relationships and memories we build doing a complex and challenging business. I like that we can fight tooth and nail one day and the next have a drink and a laugh together. I also like that when we say a deal is done it is done which is unlike any other business I know. This boils down to personal trust and integrity.

I hope then that technology finds a way to keep these personal relationships working rather than make them redundant. Time will tell but in terms of manpower we are a relatively small market and as such we should be able to shape it the way we want.

As for me, I have taken on Business Development role with Nautical Supply International in the UK. It is a company that has compliance and transparency at its forefront and is open to new methods of working. Importantly though, I can build on those previous good 'bunkering memories' working with an enthusiastic, committed and fun bunch of people.