INTERVIEW: AuctionConnect Signs Five-Year Bunkering Deal With X-Press Feeders

Kenneth Juhls took over as CEO of AuctionConnect in July. Image Credit: AuctionConnect

Digital bunker procurement and auction platform AuctionConnect has signed a five-year strategic partnership with X-Press Feeders to bring all of the shipping firm's bunker purchases onto the platform.

The deal will bring in about 300,000-500,000 mt/year of marine fuels volumes to the platform from X-Press's fleet of around 100 ships, depending on fleet growth over the course of the agreement, Kenneth Juhls, CEO of AuctionConnect, said in an interview with Ship & Bunker on Wednesday.

The shipping firm is the world's largest independent feeder carrier, with fleets operating in Asia, the Middle East, Africa, Caribbean, Latin America, the Mediterranean and Europe.

"We're super proud of doing this five-year partnership with XPress Feeders," Juhls said.

"We've been working with them over the last months in terms of validating the value of the platform for their business model, and I'm happy to confirm that they will now be rolling out AuctionConnect globally for all their procurement.

"Basically all of their purchasing will now be done digitally, and all negotiations will happen in-platform, relative to the traditional way of doing it on WhatsApp, emails and phone calls."

The deal follows about six months of the shipping firm trialling the platform.

"They were using it in select areas globally to really validate both the efficiency gains that they're getting from being on a digital workflow, and also the compliance and the audit trails, and to make sure that they are getting sharper prices, which they have confirmed that they're getting relative to the traditional way of negotiating," Juhls said.

Platform Advantages

AuctionConnect runs online auctions to bunker deliveries, bringing in suppliers to bid against each other in real time and eliminating traditional back-and-forth negotiations.

The platform is the longest-established name in the digital bunker purchasing space, serving customers since 2000. In recent years the firm has split away from its previous parent company, KPI OceanConnect, to become a standalone unit within Bunker Holding, and Juhls took over as the company's CEO in July.

Internal analysis from AuctionConnect published at the start of this year shows the auctions had saved buyers $7/mt on average against Platts Bunkerwire prices at its eight largest ports over the previous 18 months.

X-Press Feeders can expect to see a range of benefits from using the platform beyond just paying less for their fuel, Juhls said.

"Number one, they see improved pricing," he said.

"Number two, it's really strong on the compliance and audit trail.

"Just looking at general procurement in the shipping industry, you will have structured tender processes, the requirement for audit trail of bids, et cetera. 

"They have full visibility for everything that's been happening on any transaction.

"And then they obviously spend a lot less time on administration; it takes 15 seconds to set up an auction, and then the platform basically facilitates the negotiations with the suppliers with the buyer obviously having the final decision."

Technology Changes

The firm is also planning to add to its offering on the technological front.

"AuctionConnect has been in the market for quite some time; it's a proven platform, it's stable, and we are facilitating many auctions every singe day for our clients," Juhls said.

"But obviously we're looking to take a big step forward with the platform, both in terms of how easy it is to use and we want to integrate more with other tech platforms out there.

"We want to be really, really good at the digital transaction space where nobody else is really playing.

"Over the past five years, I've seen that there's been a huge uptake from the buy side of the market to use workflow systems to better plan and procure internally.

"I think 50% of the market within the next two years will use a workflow solution, and that's where I think we can definitely complement with the auction element, the negotiation piece."

Getting to grips with more data other than the bunker price will also be part of that process.

"There's also a huge element in my mind that price is not the only thing that matters," Juhls said.

"Let's be honest, when we buy personal items we look at price, but we also look at quality and other value propositions of who we buy from.

"So for us, it's really important to listen to the market, both the buy side and the supplier and trader side of the market.

"In short, we basically want to serve other data points along with the price; meaning energy content, claims history, reliability in terms of the delivery process, credit, those sorts of things that are important and that the buyers consider next to the price."

Relationships Remain Key

While AuctionConnect wants to facilitate the digitalisation of the bunker market, the firm does not see its role as eliminating the human-relationship element of how the market operates, Juhls said.

"Suppliers and buyers are used to relationship-driven transactions, where that is a great value add," he said.

"For us, it's really important to say we are not replacing relationships; we are more seeing ourselves, in GenAI language, as a strong co-pilot, together with both the buy side and the supply side of the market.

"Relationships will remain a key thing and trust will remain a key thing when you decide who you partner up with; we want to continue to support that."

The firm is in a strong position to capitalise from the twin trends of digitalisation and decarbonisation, Juhls added.

"What I think is so exciting about this opportunity right now is the timing is right," he said.

"I think we've seen digitalisation and decarbonisation really driving the industry in the past many years, and we are also seeing margins being squeezed, so cost pressure is there on all sides of the market, and all of this is amplified by generative AI, so everybody is moving into that space.

"That's why I think the timing is right now for the industry to take that next step forward, and the success of this will also very much rely on partnerships in the ecosystem, and nobody can solve this on a standalone basis."

Juhls will set out more detail on AuctionConnect's future strategy at the IBIA Annual Convention in Hong Kong later this month.

The event is being hosted at the Renaissance Hong Kong Harbour View Hotel from November 18-20 as part of Hong Kong Maritime Week, and will see bunker industry representatives from around the world discussing the latest developments affecting marine fuels.

For more information on the event and to register, click here.