World News
SIBCON 2024: E-BDNs May Reduce Need for Long Credit Terms
Singapore's rollout of electronic bunker delivery notes may ease demand for long credit terms from the shipping industry, according to global supplier Minerva Bunkering.
The city-state's authorities announced last week they would make the use of e-BDNs mandatory from April 2025, following their use on a voluntary basis since November 2023.
The processing of paper documentation has historically been one reason why shipping companies pay for their fuel several weeks after delivery, Minerva CEO Tyler Baron told Ship & Bunker on the sidelines of Sibcon last week.
"We don't need to have an industry based on 30-45 days [of credit]," Baron said.
"It's an archaic structure that really dates back to needing to match a custody transfer of paper documents, as in the BDN, with an invoice before settlement, and historically that took time with the ship taking bunkers at one port and sailing off to another.
"E-BDNs have the potential to collapse that working capital cycle, because you're able to demonstrate a custody transfer instantaneously with raising an invoice."
But it may still be beneficial to some shipping customers to take credit where a financial advantage exists for doing so, Baron added.
"We often have a lower cost of capital than most of our customers," he said.
"From that perspective, we're very happy to leverage our balance sheet and our cost of funds to provide them extended financing, if that's economically attractive."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 620.00 | 10.00 | 696.00 | 8.00 |
| Rotterdam | 563.00 | 8.50 | 685.00 | 0.50 |
| Houston | 565.50 | 12.00 | 704.00 | 19.50 |
| Fujairah | 604.50 | 4.50 | 775.50 | 3.00 |
| Global 20 Ports Average | 624.00 | 7.50 | 766.00 | 3.00 |
| Global 4 Ports Average | 588.50 | 9.00 | 715.00 | 8.00 |
| Global Average Bunker Price | 660.00 | 5.50 | 835.00 | 3.00 |
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