INTERVIEW: AuctionConnect Sees 'New Era' for Digitalisation of Bunker Industry

Per Funch-Nielsen is director of AuctionConnect. Image Credit: AuctionConnect

Bunker Holding subsidiary AuctionConnect, the longest-established player in the digital bunkering space, sees a 'new era' for digitalisation emerging as regulations and process modernisation drive uptake of online services.

The company has separated from KPI AuctionConnect to being its own standalone unit, and has employed more staff to provide better coverage across all timezones, Per Funch-Nielsen, director of AuctionConnect, said in an interview with Ship & Bunker.

"We stand here in front of a new era, as I call it, within digitalisation," Funch-Nielsen said.

"And we also see slow uptake, as we have been used to in this industry.

"We know where it comes from; it is a pretty conservative industry.

"People do not really embrace change, but now I think we are at a turning-point where people have to, in one way or another.

"[AuctionConnect] has been in the industry for 20 years, and around 14,000 auctions have been completed on the site, and some 25 million mt plus of bunkers have been auctioned.

"We do have something that we know works, but as with any other digital tool, we also need to look in which direction the industry is going, and what the requirement actually is from a customer's point of view."

Growing Demand

The company runs online auctions to bunker deliveries, bringing in suppliers to bid against each other in real time and eliminating traditional back-and-forth negotiations. Suppliers pay $1/mt as commission, while buyers pay nothing for the service.

Internal analysis from AuctionConnect shows the auctions have saved buyers $7/mt on average against Platts Bunkerwire prices at its eight largest ports over the past 18 months.

While the company is part of Bunker Holding, the various Bunker Holding brands are treated neutrally within the AuctionConnect system and use it as any other firm would.

Demand has increased over the past year, Funch-Nielsen said.

"In the current fiscal year, we can see there is an uptick, across all the different ports where we work," he said.

"Volume can vary a lot depending on the size of the clients and the market conditions.

"But it's increasing; with the investment that we're doing right now and everything else, we do expect that to grow significantly."

Market participants are increasingly seeking out the competitive marketplace that the platform offers, he said.

"We can see that it is something that is not only saving money but creating a competitive environment for people," Funch-Nielsen said.

"We are a marketplace for buyers and suppliers to meet online, but we also create a more competitive space for them to get in there and do some real-time negotiations. 

"We see that people like that it is real, that the prices they obtain are very competitive.

"Also, the fact that we are very safe, and flexible in terms of there being no commitment to only use the auction site.

"It's available whenever they need it."

Seeking Partnerships

The company will seek out partnerships with other firms to expand its offering, in particular in the e-BDN space.

"We are looking into what is actually customer-driven," Funch-Nielsen said.

"We are the only system that does the actual fixture, where we have the buyer and the supplier together, and then everything which is pre- and post-, the bunkering and the delivery and so forth -- that's what we're looking at, where there's uploading of documents and what is required for e-BDNs.

"We don't want to develop it ourselves, but we are trying to partner up with people that already have these services available.

"That's where we see the value is, giving the clients a free choice in how they want to do it, and they're not forced to use 100% a system that provides everything.

The firm expects Singapore's decision to make the use of e-BDNs mandatory from April of this year to drive uptake of digitalised systems elsewhere in the world.

"I think that we will see more ports come with demand from the market, and also for compliance reasons going forward," Funch-Nielsen said.

"Now people can see that there are so many alternatives that can provide those kinds of services and information, I think it will be mandatory in some ports."