Brightoil seeks to reshape shipping with e-commerce

Bunker supplier and tanker owner claims online platform and marine e-commerce ecosystem will bring radical change to the way shipping works

Brightoil Petroleum is focusing on e-commerce as the bunker supplier and tanker owner powers ahead with a digital procurement platform that it claims will radically change the way fuel trading works.

The Hong Kong company believes the new platform, along with a second marine e-commerce product it is developing, could help boost efficiency in the shipping industry.

The bunker platform went live last Friday, as TradeWinds reported in its online edition.

Online bunker trading platforms are nothing new, but Brightoil chief operating officer Stephen Qi says this one offers greater transparency than its peers and a higher degree of certainty for shipowners in determining future bunker costs.

The platform, Brightoil Online E-bunkering, is a live feed of forward-fixed prices up to nine months ahead. Buyers are able to send spot and term inquiries digitally to any port in the world, and lock in the cost of their future bunker purchases.

Qi stresses the platform is not a financial instrument.

“It is a physical settlement. Locking in the price gives certainty, which is the essence of the platform,” he explained.

The platform puts users in direct contact with partner physical suppliers.

The deals are done direct between the two parties. This avoids the potential pitfalls that occurred when OW Bunker went bust a couple of years ago and buyers found themselves targets of OW’s administrators, lender and physical suppliers that were all chasing the same cash.

Qi expresses surprise that shipping has been slow to adopt digital procurement services, noting that while e-commerce has developed rapidly in other sectors, shipping remains tied to its traditional ways.

“E-commerce is easy and very efficient. Platforms such as Alibaba have become an integral part of the world today. The shipping industry puts a lot of new technology on the ships, but ashore management and communications is still very old fashioned," he said.

Qi reveals that Brightoil is developing a second platform that he describes as a marine e-commerce ecosystem, which will incorporate chartering, sale-and-purchase, procurement, crewing, insurance and bunkering.

That platform is scheduled to launch at the end of this year.

Brightoil's move into online bunker procurement comes at a time when the trends for both online marine fuel buying and direct purchasing from physical suppliers are growing.

Stephen Simms, who heads Baltimore-based maritime law firm Simms Showers, says this is part of a natural progression towards online procurement, but it also stems from the fallout of the OW collapse.

“This, I think, is a manifestation of both the availability and application of big data to maritime procurement, not just for bunkers … but also a direct manifestation of OW where there became somewhat of a distrust of traders," said Simms, who is also a board member for the International Bunker Industry Association.

Steve Leonard, a marine fuels veteran, says there is a variety of online bunker buying platforms aiming to provide more efficiency to the process.

He says this is a reaction to the industry's reputation for "irregular" transactions that breed inefficiencies.

“The opportunity is there in the bunker business to facilitate innovation. Suppliers and buyers need to become more reliant on technology," he said.

But in an increasingly crowded space amid resistance to change, it remains to be seen which platform will succeed, said Leonard, who has had roles at OW, Aegean Marine Petroleum and online bunker platform ClearLynx. "Someone is going to get it right," he said.