OilFront, a new technology-focused bunker broker today has formally launched in the UK, CEO Danny Soos has told Ship & Bunker.
The company, backed by European technology accelerator Entrepreneur First (EF), offers a traditional bunker broking service alongside an online platform to provide transparency and other efficiencies that OilFront says will save its target customer base at least $3/MT.
"In recent times the industry has been punctuated by tough market conditions, new legislation and consolidation, along with a desire by many players to shorten the supply chain by as much as is practical. Add in the industry-wide impact and complexities from the upcoming 0.50% sulfur cap in 2020 and the simple fact is the bunker procurement space is changing," says the former BP man, who along with Head of Bunkering Neil Lamerton spoke to Ship & Bunker in the days prior to the official launch.
Danny Soos, CEO, OilFront
If you look at the trend, large to medium sized shipping companies are taking bunker buying teams and bringing them in-house
"If you look at the trend, large to medium sized shipping companies are taking bunker buying teams and bringing them in-house. Why? They're getting a lot more value because they're not just doing what the broker does, they're doing critical pre-enquiry activities like bunker planning where there are literally billions of dollars to be saved.
"At OilFront, we want to empower small and medium sized ship owners and operators, and believe our technology enabled bunker buying service combined with in-depth industry experience can save them at least $3/MT on bunker costs. We also want to minimize their back office efforts for settlements, management reporting, risk metrics and so on. We want to create as much value for them as having a dedicated internal bunker desk."
Joining Soos at the helm is 35-year industry veteran Neil Lamerton, formerly of Gulf Petrochem and KPI Bridge Oil, amongst others.
"I'm one of the old gits in the industry," Lamerton jokes, but his involvement with OilFront is conspicuously symbolic of industry experience now moving forward with the times.
OilFront's price map. Image Credit: OilFront
And this is no coincidence.
"Everyone knows this industry is resistant to change, but I believe the time is absolutely right for technology to extend - not replace - what the modern broker can do. And we've already found that by using technology alongside in-depth industry experience, it's a very powerful combination that ultimately saves people money," he says.
Among those who can vouch for this is Richard Hext, Former CEO of Pacific Basin Shipping Ltd., MD of Swires's China Navigation Company Ltd. and now Chairman of Vanmar Shipping Ltd.
"The opportunity cost of not carefully checking the market for the best overall deal for bunkers is very considerable. Bunkers are already the highest discretionary cost item faced by shipowners and operators and bunker costs will soon soar following the introduction of new IMO rules," says Hext.
"OilFront's combination of technology with deep industry experience is somewhat unique, enabling shipping companies to navigate the hitherto very opaque bunker market to save a lot of money. OilFront recently saved a client US$9 MT on their bunker bill by redirecting their ship to a cheaper port and by enabling access to credit."
OilFront says it achieves savings for customers in three ways: Better planning, transparent negotiation, and by aggregating demand.
"OilFront works with the shipping company to decide when and where to take bunkers. Our market map makes it easy to work out the most economic bunkering port, which may not be the load or discharge port. The opportunity cost of taking fuel at the wrong port can be US$20+ / MT," explains Soos.
Neil Lamerton, Head of Bunkering, OilFront
If our data-driven approach was adopted industry wide, I believe it could save at least US$4Bn a year
"OilFront then achieves completely transparent negotiation by giving companies access to expert buyers, who work the enquiry in the market. Where possible, we work directly with the supplier and can help open credit lines. All quotes are shown in real time as they are negotiated. Expert buyers can typically save US $2-5 / MT and reduce the incidence of claims when compared to operators who buy bunkers infrequently.
"Large shipping companies can often achieve discounts of up to $9 per MT below Platts - bigger buyers get better service and prices. OilFront's technology allows it to aggregate orders and to give the shipping companies it works with more buying power. It is also a win for suppliers who spend less time fielding unsuccessful enquiries."
Lamerton says there are no upfront fees to use the technology, and OilFront's commission is pre-agreed with clients.
"If our data-driven approach was adopted industry wide, I believe it could save at least US$4Bn a year," he says.
"The best way to understand what value we can create for your company is to give us a trial."
For more information, contact details for OilFront are as follows:
Neil Lamerton, Head of Bunkering
M: +44 (0) 7872 608086
Danny Soos, CEO
M: +44 (0) 7931 582879
T: +44 (0) 20 7193 7500