Almost two years have passed since the bunker industry woke up to the news that OW Bunker was bankrupt. Since then, the story of the bunker company's fall has been discussed and described – both out loud and in whispers. Yet the shock has still not subsided in the industry.
"We woke up to a new reality that day. We all witnessed the collapse of OW Bunker – a strong, solid company with a long history and dedicated, skilled employees. In one way or another, we were all affected – and we need to remember that what happened to OW Bunker can happen to others as well."
These words come from Anders Borella, Senior Bunker at carrier Norden, speaking from the podium as part of his presentation about risk management at the bunker conference SIBCON in Singapore:
"The bunker industry is characterized by what happened – and completely changed. It's important that we all learn from OW Bunker, and that we do what we can to avoid a similar situation in the future."
Borella spoke in front of hundreds of representatives from the bunker industry, including several former OW Bunker employees – these counted Jens Maul Jørgensen, Head of Bunker at Oldendorff, who also took to the stage on Thursday.
"This is basically a matter of knowledge. Many people don't know the risks related to their counter-party – but the key things is to know this risk," said Jens Maul Jørgensen.
Impossible to eliminate risk
Martin Broderse, Head of Torm's bunker division, similarly explained how the OW Bunker case has impacted risk management at Torm:
"We've started talking to our counter-parties. This means that we've gotten closer to them – and that we're more selective in terms of who we're doing business with," said Brodersen:
"As buyer we have a responsibility to minimize our risk, but it's impossible to completely eliminate this risk – no one's too big to fail,"
The three bunker executives stressed repeatedly how the OW Bunker case has made them change the way in which they view their counter-party:
"We've always been selective, but the OW Bunker situation served as a wake-up call for the industry as whole. At Norden we're now looking even closer at our counter-party's track record, their financial situation, and whether we trust them: Is it a case of mutual trust and understanding?" said Borella of this process.
But in the case of OW Bunker, wasn't it exactly a matter of no one harboring any kind of mistrust?
"Trust is not enough – OW Bunker proved that," Jens Maul Jørgensen tells ShippingWatch after the presentation.
"But if you don't trust anyone, you can't participate in this business. It's a matter of being well-prepared. What are we dealing with here? Who are we doing business with? It's a matter of knowledge."
The last time the bunker sector gathered for a conference was approximately one month before the collapse of OW Bunker. Anders Borella remembers how OW Bunker was a key figure at the event – and that the name OW Bunker was printed on all the water bottles and on the large banners:
"At the time there were no indications that something was wrong. And that's also a reason that we're now taking precautions by safeguarding ourselves as best as possible through solid business conditions and deals that set up the rules of the game between us and the supplier or trader in question," he tells ShippingWatch:
"We placing the eggs in more baskets today by fixing deals more broadly – both by going straight to the suppliers and by not placing too many eggs with the same trader. So we're generally spreading our business out more now than in the past."
Jens Maul Jørgensen concludes:
"OW Bunker has become a ghost haunting the industry, but that just goes to show how big they were, and that many things could be going on in the back. And this means that many people today are starting to embrace risk management. Knowing the risks related to counter-parties is key!"