Enough reading, time to ACT !
You might have read 200 articles from different sources about the new regulation of sulphur cap in 2020, attend few shipping seminars and have some “discussion” with your current suppliers. You have read how those big companies using amazing financial technique from issue new stocks to raise funds to do a takeover on a scrubber manufacturer, then you look at your fleet (which the scrubber might worth more than the ship) and feel no much you can do for the preparation, well…..NOPE , there are definitely actions you can take right now for a better preparation for the (New) New Year !
- Credit control
We are expecting a general price increase from normal fuel to LS fuel in 2020, of course will expect of higher production the price gap will narrow down ( in 2018 the price gap in Singapore range from (USD150-200) for few indication enquiry. Therefore expect there will be a higher credit demand from your current channel in 2020, it might be difficult to know exactly the credit limit but you should have a generally estimation and be prepared a higher credit limit is needed in the new era.
Action Plan : Estimate your current credit limit, expand supplier channel , start building relationship and even small line with more suppliers.
2. Counter-party risk
In 2018 we seeing many downsizing and exiting of some bunker traders / suppliers and its not surprising to see more similar activities in the uncertain situation in 2020. In addition, as mentioned above the Capital requirement due to higher price on the LS fuel will definitely be a burden for many small traders / suppliers. If you don’t want to repeat the OW case , its crucial to do an internal audit with your current supply channel and see hows their financial status, it might be hard to ask them for financial report or what , but check around with different supplier / trader you will probably get a general picture of the status of the counterpart.
Action Plan : Internal audit for the financial status of your current supplier, reach out to direct supplier and constant be alert on any new information on the market.
3. Port planning
In 2020 its expected for major bunkering port like Singapore , Fujairah, Hong Kong those traditional bunker port, oil majors and cargo player should be more ready for the switches thus the supply situation is less likely to be problematic. However if your current voyage you constantly have some small port for top up, be prepared in the futures that small port might not be available and get prepared for alternative in case that happen.
Action Plan : Review all the past bunkering location and mark down all “smaller” port and prepare for alternatives
Good luck for the New year !
Until next time
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although the English is not very good, the points made are relevant and put across in a very straight forward manner instead of beating around the bush as some writers tend to do. overall good article
thx so much man, try to make more relatable contact to the readers