The smaller the powerful the supplier ??
Recently some suppliers are saying that it’s much easier to be a small player nowadays because small suppliers have less operation cost ( or even no cost if they just do barge chartering) , and can only focus on “good” vessel with ridiculous low price , that seems logical but is it really ?
1. Barging cost
It’s true that small supplier have less crew , maintenance cost compare to big supplier , yet the cost is pretty minimal compare to the turnover of business. Some might argue that how about supplier who just charter in barges and do delivery on deal by deal basis , which is a common practice in Hong Kong. Although they could save on the crew but they do have to pay USD3-6/MT which can easier to be a significant amount compare to the bunker price.
2. “Good vessel “ with crazy Low price
What is good vessel ? What is good 3 months ago could be a nightmare today , for supplier who quote 20usd /MT lower to chase for 4 “good” vessels per month is a very risky move, as even 1 mistake could result in significant loss (25% of total investment in this case). Therefore for supplier who only quote “good” vessel and ignore all others is definitely not a good practice Base on above , if smaller the better , then no one will invest hundred of millions to build their fleet in the first place. There are definitely advantages being light asset but it do comes with its own shortcoming Until next time
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