Newly formed bunker broker BunkerEx is utilising its technology platform to save buyers both time and money. The London-based company has secured venture capital investment to launch a new brokerage that lowers bunker costs for owners and charterers.
According to Ishaan Hemnani, CEO of BunkerEx, the main reason for the creation of BunkerEx is to allow full transparency in the bunker buying process between owners and physical suppliers.
“Too many owners overpay for their bunker fuel because they don’t get good coverage of the market, and their brokers can secretly take excessively large commissions. By being completely open we can bring huge benefits to both the owners and physical suppliers. It’s the most efficient way to purchase bunkers,” says Hemnani.
“We are looking to change this at a crucial time for the shipping industry,” he adds.
BunkerEx has built a trading platform that allows buyers to generate an enquiry, cover the whole market and negotiate aggressively in just a few clicks, significantly improving efficiency.
Over the past few years, Hemnani has noticed many owners looking to utilise technology in order to streamline their processes and become more efficient. Another change he sees is that owners want to use a broker for guidance and negotiation, but have their contract directly with the physical supplier.
“The one benefit from OW’s collapse,” he says, referring to the collapse of giant Danish OW Bunker, “was that buyers have become much more aware of who their counterparty is and how they are being paid. The cleanest way to purchase your bunkers will always be to pay the company that is physically supplying them, not via an intermediary,” Hemnani maintains.
On the current bunkering market, Hemnani reckons the major challenge is in the lack of information flow.
“Whether it’s 2020 regulations, the new ISO (2017) specifications, accurate price indications or counterparty risk, there can be a gulf of uncertainty between owners, charterers and physical suppliers,” Hemnani warns.
“This is why it’s important to take advice from a broker who is in the market everyday and talking to all sides of the industry. A good broker will provide relevant and accurate information that can save owners and suppliers huge amounts of trouble further down the line,” he suggests.
According to Hemnani, the company’s medium term plan is to show as many owners as possible how much money and time the company can save them by using the new platform.
“Most traditional service industries are going completely digital. We don’t believe the bunker industry is fully ready for that, so have built a hybrid between the two: traditional human brokers with a technology platform to make the process fairer, faster and cheaper,” Hemnani concludes.