In the space of just two weeks a couple of bunker broking platforms have launched in London.
First came BunkerEx at the end of August, which serves as a site for buyers and suppliers to hatch deals. Today sees the launch of OilFront, which describes itself as a “technology driven bunker broker” and can count famous shipping personality Richard Hext among its investors.
The company, which already has several clients across the globe, is headed by Danny Soos, formerly with BP, and 35-year industry veteran Neil Lamerton, whose career included stints at Gulf Petrochem and KPI Bridge Oil.
OilFront said today it is focused on empowering small and medium-sized companies who have been shut out of the best deals in the bunker market because they can’t afford a dedicated bunker buying team. OilFront believes its solution will save the average target company at least $3 per metric ton.
OilFront works with the shipping company to decide when and where to take bunkers. Its 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,” the company stated in a release.
OilFront gives companies access to expert buyers, who work the enquiry in the market. All quotes are shown in realtime as they are negotiated.
Large shipping companies can achieve discounts of up to $9 per metric ton below Platts. OilFront’s technology allows it to aggregate orders and to give the shipping companies it works with more buying power.
Hext, whose shipping career includes heading up China Navigation, Univan Ship Management and Pacific Basin, has a stake in the bunkering startup and is serving as an advisor.
“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. 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,” Hext commented.
OilFront claims it recently saved a client $9 per metric ton on its bunker bill by redirecting their ship to a cheaper port and by enabling access to credit.
Danny Soos, CEO of OilFront, said: “OilFront enables small and medium sized companies to gain access to the best deals. There are no upfront fees for our technology and our commission is pre-agreed with clients. If our data-driven approach was adopted industry wide it could save at least $4bn a year.”