Singapore is the world's biggest bunker market, and likely also the place in the world with the most fierce competition between the bunker companies. One of the absolute biggest bunker companies in the world, Dan-Bunkering, can feel this competition. And the company has an answer for how to win this competition: stronger governance of Dan-Bunkering itself, long-term contracts and by operating bunker management for a higher number of customers.
"We believe we already have some advantages that we need to draw on. Dan-Bunkering needs to focus on having a strong market position in procurement, and then we need to improve our operations - both in terms of how we organize the company across departments and in working simply and efficiently, and last but not least, how we develop and expand our business," says Morten Tranberg Mortensen, Dan-Bunkering's newly appointed Head of Operations, Asia.
He explains that the expansion of Dan-Bunkering will happen by establishing more offices in the region. This will primarily be done organically, though he does not rule out acquisitions.
Dan-Bunkering is among the ten largest bunker companies in Asia, and if the company wants to achieve organic growth, part of the process will be to secure closer partnership with its customers. This means that the company will focus more on landing long-term contracts, of for instance six months or one year, in addition to the individual spot arrangements the company already has in place with customers.
Stronger bunker management
The third part of Dan-Bunkering's plan to avoid being run over on the Asian market is to try to bring in more customers on bunker management, a service in which the bunker company becomes integrated - that is, the company handles all bunker purchases for a carrier.
"We want more customers to leave their entire bunker business with us. They just give us their sailing plan and we make sure that the entire operation has the lowest cost possible. We want to provide customers with financially advantageous solutions, where we not only ensure savings on the bunker price but also in terms of operations, so we can save the customers time as well as distance," says Morten Tranberg Mortensen.
He declines to comment on how big a part of the Asian business will focus on bunker management, though he adds that this part will become "significantly bigger."
The Asian market is not only affected by the towering number of bunker companies in and around Singapore. The market is still somewhat marred by the crisis in shipping, dragging on in its sixth year, something that has naturally affected bunker consumption.
"At the same time, Singapore, as the world's biggest market, currently faces a challenge related to controlling fuel volumes, which have to be controlled with mass flow meters, starting within the next few years. We think this is a good initiative and we're keeping a close eye on developments, so that we can offer our customers the best service," says the Head of Operations, Asia.
Singapore introducing new requirements
Starting January 1st 2017, Singapore will introduce increased requirements, as all marine fuel will need to be controlled with a so-called MFM - Mass Flow Meter, according to Ship and Bunker.
"In order to secure Singapore's position as one of the world's premier bunker ports, we are taking the lead by being the first to introduce requirements for the use of mass flow meters. This marks a significant milestone for the Singapore bunker industry, and it will strengthen our position on the long-term as a reliable and trustworthy port for bunker operations," said Andrew Tan, CEO of Singapore's port authority, MPA Singapore, at Singapore Maritime Week back in May.
Before working for Dan-Bunkering, where has was first hired to head Dan-Bunkering's Singapore office back in May, Morten Tranberg Mortensen worked for the Maersk Group, where he spent the last four years stationed in Asia, gathering experience from the region. He has also worked with marketing, sales, processing and procurement at 3M.
The position as Head of Operations, Asia, is a new creation at Dan-Bunkering, and it is an important position, says the newly appointed executive.
"It sends a strong signal about the importance of the region, that Asia is given a direct seat on Dan-Bunkering's management team. This gives access to additional information and possibilities for the development of the Asian region," he says.