Physical suppliers should move away from fuel supply in the major bunkering hubs, and instead focus on smaller ports to reap the opportunities of a rapidly changing market, according to maritime consultancy 20|20 Marine Energy.
Growing concentration of fuel supply in major bunkering hubs is expected to continue towards 2020, offering only increased competition and low margins.
“Physical suppliers should leave the major ports for the refiners, cargo traders and those who have an obvious competitive advantage; let them focus on fuel cost minimisation, and shaving margins to a point where only the best blenders and cargo sourcers can make money,” Adrian Tolson, Senior Partner at 20|20 Marine Energy, said.
Tolson added that traders are seeing their share of the market shrink and physical suppliers are seeing their supply volumes erode as they rationalise away from the low margin, larger supply locations.
“The right strategy for independent physical suppliers will be to ensure that they have the expertise and flexibility to recognise, and then quickly move into the smaller, higher margin markets. Those that do will reap the rewards,” Tolson informed.