• CEO Dorthe Bendtsen sees permanent shifts in how the market works
• Instability increases demand for KPI OceanConnect's services
• Procurement decisions moving beyond single port or fuel type

Dorthe Bendtsen is CEO of KPI OceanConnect. Image Credit: KPI OceanConnect

The combination of a more diverse fuel landscape and the energy transition have for many shipowners permanently the way fuel procurement decisions are made, according to global bunkering firm KPI OceanConnect.

The firm has just reported a strong set of results for its last financial year, with a 21% gain in pre-tax profits and an 8.4% rise in sales volumes.

While the results come at a time when the industry is navigating increased geopolitical volatility, some of the changes we are seeing in bunkering may turn out to be more lasting, Dorthe Bendtsen, CEO of KPI OceanConnect, said in an interview with Ship & Bunker.

"While pricing and margins may stabilise as the security situation improves, many of the changes we have seen are structural rather than temporary," Bendtsen said.

"Environmental regulations and a more diverse fuel landscape have permanently changed the way fuel procurement decisions are made.

"Buyers today have access to far greater market transparency and data than they did even a few years ago.

"That means procurement is becoming less about securing the lowest bunker price on the day and more about achieving the best overall commercial outcome.

"We have seen how operators are increasingly evaluating fuel choices based on availability, compliance costs, operational flexibility and long-term value."

In the months leading up to the war, the bunker industry experienced a weakening of margins driven by strong competition in the market, in particular from smaller trading firms. But the market should not necessarily expect a return to those conditions in the event of the war drawing to a close, Bendtsen argued.

"Competition will always be strong, but we believe it will increasingly be driven by the quality of advice, market insight and the ability to develop flexible fuel and compliance strategies, rather than price alone," she said.

"The experience of the past year has reinforced the importance of optionality, and we expect that to remain a permanent feature of fuel procurement long after the current disruption has passed."

Instability Benefits Resilient Companies

The main lesson KPI OceanConnect takes away from the recent conflict is that companies with a more holistic approach have been those that adapted best to the crisis.

"The disruption has highlighted the importance of having a resilient global supply network, the flexibility to source fuel through alternative locations when markets are disrupted and access to expert market advice," Bendtsen said.

"While market volatility creates challenges across the industry, it also increases demand for the support we provide.

"Our global reach, combined with expertise across conventional fuels, alternative fuels, carbon and compliance solutions, enables us to help customers build fuel strategies that balance availability, cost and regulatory requirements.

"Our financial results reflect the strength of that customer-focused approach and the value of helping customers navigate an increasingly complex operating environment."

Changing Procurement Strategies

The changing marketplace is also leading to considerable shifts in how shipping companies are approaching bunker procurement.

"The recent disruption reinforced how quickly supply conditions can change and how important it is to build flexibility into procurement strategies," Bendtsen said.

"That means looking beyond a single port or fuel type, considering alternative supply locations where appropriate, and assessing whether lower-carbon fuels can also reduce compliance costs under regulations such as FuelEU Maritime and the EU ETS.

"Procurement decisions are increasingly about balancing price, availability and regulatory impact, rather than optimising each factor in isolation.

"Looking ahead, the operators best placed to manage volatility will be those that treat fuel procurement as an ongoing strategic process, using market intelligence and forward planning to reduce risk while maintaining flexibility."

Growth Opportunities

With KPI OceanConnect's rise in profits this year, thoughts will turn to how this income can be used to drive expansion.

The company was formed from a merger of KPI Bridge Oil with OceanConnect Marine in 2020, and more recently this year it has integrated fellow Bunker Holding subsidiary Baseblue into its operations.

"We are pleased with where the business stands, and the integration of our sister company Baseblue this year is a good example of the kind of growth we are interested in; expansion that genuinely strengthens our global presence, broadens our offering and strength of value that we can offer to clients," Bendtsen said.

"We will always look at opportunities that make strategic sense on that basis."

When it comes to future growth, digitalisation and decarbonisation provide good opportunities, Bendtsen argued.

"We continue to see significant opportunities for growth by investing in our people, digital capabilities and expertise across alternative fuels, carbon markets and compliance solutions," she said.

"As the market evolves, our ambition is to help customers navigate increasing complexity with practical, commercially focused fuel strategies supported by global supply, market insight and risk management expertise."