MARINE fuel suppliers must change business models to cope with the sulphur cap and technological advances to come, said Connecticut's 20/20 Marine Energy consultancy chief Adrian Tolson.
'Suppliers need to break out from delivering huge quantities at small margins as a means of staying in business,' said Mr Tolson.
'Windfall profits for physical suppliers post 2020 will be short-lived, with the main beneficiaries being the large commodity players, which will lead to declining margins,' he said.
Speaking ahead of this week's SIBCON 2018 confrence in Singapore, Mr Tolson said that as margins dwindle suppliers need to look beyond 2020.
'Shipowners and operators require guidance on what compliance solution they are going to adopt, which we know will be mainly distillates and blended very low sulphur-free fuel interspersed with scrubbers.
What they need is help in structuring their purchasing habits, utilising technology, data and intelligence so that their procurement and buying process is fully optimised, he said.
'This can yield one to two per cent in fuel cost savings, which is significant when we consider the dramatic increase in prices. Suppliers, as well as bunker traders need to be able to provide this level of consultancy,' he said.
'This takes their value-add well beyond price per ton, and also creates the foundation from which they can evolve their positioning and offering in a post 2020 world.'
Specifically, Mr Tolson said suppliers need to look to regulatory challenges in reducing its greenhouse gas emissions and meet global warming targets, defined in the Paris Agreement.
'Suppliers need to break out from delivering huge quantities at small margins as a means of staying in business,' said Mr Tolson.
'Windfall profits for physical suppliers post 2020 will be short-lived, with the main beneficiaries being the large commodity players, which will lead to declining margins,' he said.
Speaking ahead of this week's SIBCON 2018 confrence in Singapore, Mr Tolson said that as margins dwindle suppliers need to look beyond 2020.
'Shipowners and operators require guidance on what compliance solution they are going to adopt, which we know will be mainly distillates and blended very low sulphur-free fuel interspersed with scrubbers.
What they need is help in structuring their purchasing habits, utilising technology, data and intelligence so that their procurement and buying process is fully optimised, he said.
'This can yield one to two per cent in fuel cost savings, which is significant when we consider the dramatic increase in prices. Suppliers, as well as bunker traders need to be able to provide this level of consultancy,' he said.
'This takes their value-add well beyond price per ton, and also creates the foundation from which they can evolve their positioning and offering in a post 2020 world.'
Specifically, Mr Tolson said suppliers need to look to regulatory challenges in reducing its greenhouse gas emissions and meet global warming targets, defined in the Paris Agreement.