INTERVIEW: ZeroNorth Bunker Now Covers a Fifth of All Marine Fuel Sales

Juhls joined ZeroNorth from Maersk Tankers in January 2022. Image Credit: ZeroNorth Bunker

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• Covering 35 million mt/year on the buy side and 25 million mt/year on the supply and trading side
• Aiming for breakeven in 2024
• Charging 'cents per tonne' for the transactions it covers

After three acquisitions in the marine fuels space over the past two years, ZeroNorth's services now cover more than a fifth of all global bunker sales.

The firm now covers about 50 million mt/year of bunker transactions, Kenneth Juhls, managing director of ZeroNorth Bunker, said in an interview with Ship & Bunker on Monday.

This figure excludes some double-counting of volumes covered both by the company's services for buyers and sellers of marine fuels, he explained.

"What we say is that we have 35 million mt on the buy side, and then we have 25 million mt on the supply and trader side, and we've taken out those overlays of 10 million mt to say on average we're now covering about 50 million mt/year of the market," Juhls said.

Official IMO figures put global bunker demand at about 224.8 million mt for 2021. Assuming this number has held at that level since then, that would suggest ZeroNorth Bunker is now playing a role in 22.2% of all bunker transactions.

Rapid Rise

The firm's rise to prominence in the marine fuels space has been a rapid one.

ZeroNorth -- then a Maersk Tankers spin-off focused primarily on vessel optimisation -- acquired bunker procurement platform ClearLynx in January 2022, rebranding it as ZeroNorth Bunker in August of that year.

Juhls joined ZeroNorth as interim chief financial officer in January 2022, moving on to become managing director of ClearLynx in May of the same year, and having previously served as chief strategy and transformation officer at Maersk Tankers.

The firm then went on to acquire the Prosmar Bunkering platform in November 2022.

"The next step [after the ClearLynx and Prosmar acquisitions] was saying, if we really want to drive digitalisation in the bunker industry, as part of the overall ZeroNorth mission of making global trade green, we need to know as much as possible about the fuel being acquired in the market and consumed," Juhls said.

"But that was all on the buy side; all the shipping companies, tramp, liner, cruise lines, owners, operators, that was the clients."

The company's third bunkering acquisition was of Singapore-based bunker supplier software firm BTS Pte Ltd in February of this year, in a bid to add a service catering to bunker suppliers and traders to its stable.

"They've basically been in the market for 15 years, building up their supplier and trading solution that really helps the traders and suppliers manage their workflow the same way as on the buy side, but from the supply side," Juhls said.

"Now we have an offering where we want to be a trustworthy partner for the buyers, and for the suppliers, the traders and the brokers.

"What we want to do is work with those two sides of the market, and then I'm quite confident that as we hopefully succeed with that, there will probably be use cases to connect the data on a platform that can bring value to both sides."

Consolidation

The company is now consolidating its position in the bunker industry, breaking down 13 previous product offerings into six core services: bunker planning, bunker procurement, bunker supply, bunker trading, bunker pricing and e-BDN solutions.

"Through the acquisitions, there are a number of smaller solutions and features that have been built to solve specific pain points for a small part of the market, but we have decided to focus our efforts on a few core products to ensure we bring most value to the majority of the market," Juhls said.

ZeroNorth initially kept Prosmar as an independent, standalone business because its area of focus was different to that of ClearLynx. 

"Different players will have different needs, and if you combine it into one, you'll force everyone into one grey basket," ZeroNorth CEO Søren Meyer said in an interview with Ship & Bunker shortly after the acquisition was announced.

But the firm is now ready to integrate the two sides of its solutions for the marine fuels market, Juhls said.

"I think we've learned a lot since we did the [Prosmar] acquisition," he said.

"It's probably been within the last month, or month and a half, that we've been saying we're now mature, we've now reached a scale where it makes sense to consolidate, and also bring all the knowledge and the teams into the same operating model, so we can have dedicated product teams for each of the products that can work faster on a common tech stack.

"It's good timing for us to do it now."

Financial Model

After the recent period of spending heavily to grow through acquisitions, ZeroNorth Bunker is now setting its sights on turning a profit.

"We've invested quite a lot of money, and we will continue to invest quite a lot of money," Juhls said.

"We're targeting breakeven hopefully in 2024, but obviously with a team of 60+ people only in the ZeroNorth Bunker space, we are investing heavily in bringing all of those solutions we've acquired into the next generation in terms of new UI, new features, more partnerships, and in broadening our impact.

"Obviously we're not a pro-bono organisation, there has to be money at some point, but we're really committed to bringing value to the clients."

Parent company ZeroNorth A/S reported a loss of $32.8 million for 2022, up from an $8.2 million loss in 2021.

ZeroNorth Bunker gets its income from a fee charged per trade conducted under its auspices, Juhls said.

"The revenue model of the solutions is basically that you pay a fee for each tonne transacted," hesaid.

"It's a very small part of the total value of the actual transaction that we take -- we're down in cents per tonne, in that area."

Customers

The company now has a wide range of customers from across the marine fuels supply chain, Juhls said.

"We are working with all segments in the market including buyers, suppliers, traders and brokers," he said.

"We see that no one size fits all in this current environment; we have larger and smaller players, we have digitally mature companies and some who have just started their digitalisation journey and we have many clients where the complexity that comes with decarbonisation realise they need software to help them manage this.

"Many players in Singapore are using our solution.

"But I still find that a lot of the really big players on the supply side continue to rely on internally developed systems, and there is still a barrier of saying, can we trust bringing our information out to a third-party provider, what would they do with our commercial data, and do they know enough about our business model to actually develop the solutions that we need.

"There's still maturity going on, but we do have dialogues with many of the bigger players, and they are starting to want to engage."

Juhls is also chair of IBIA's digitalisation working group, and while setting out the results of a survey on digitalisation at the industry body's annual convention in Dubai last week, noted that a lack of willingness to be transparent with commercial data may be a challenging barrier to the industry taking on new technology.

But the size of the market volumes that ZeroNorth Bunker now covers may go some way to reducing that anxiety for the firm's own potential customers. A large player coming to ZeroNorth Bunker for the first time may bring 2 million mt/year's worth of commercial data to the platform, but this would be dwarfed by the 50 million mt/year's worth of data they could now stand to benefit from in the company's pricing service.

"On an anonymised and aggregated level, we can bring that information back to the ecosystem where they make their decisions," Juhls said.

"This is obviously dependent on the customers of the service wanting to invest their data into the system to get value back from even more data."