World Bunkering > News > Summer 2010 > Reaching out to the industry

Mike Ball

In the 38 years since he first went to sea, Mike Ball has seen the bunker industry from just about every angle it is possible to see it. After working as an engineering officer with Esso, he joined Esso Europe’s London office as an operations manager – a task which included buying bunkers for the company’s chemical tanker fleet. Still with Esso, he was briefly responsible for the production of bitumen at Fawley refinery, before joining Clarkson as a bunker broker.

When Clarkson sold its bunkering division to OceanConnect, he stayed on with OceanConnect to establish the product, before leaving the broking world to become a trader with Peninsula Petroleum – at the time, a small company with only four employees. In April 2008, he made the move back to the purchasing side, becoming bunker manager for Gearbulk – full circle. The fleet purchased just under 1 million tonnes in 2009 on over 1,000 orders.

As a buyer, it is definitely an advantage to have had some experience on the other side, Mike says. “Nobody knows it all, but it is very helpful to have a knowledge of the practical issues. Many shipowners still think bunker barges are like buses – they don’t realise, for example, that you have to book a barge seven days in advance in Rotterdam. I hope my experience makes me a more reasoned buyer. Having been on the receiving end of claims, I know the full repercussions of making them.”

In addition, he says, he has a feel for where prices are going, and for the people he is dealing with: “I’ve spent 20 years doing my research!”

Improving communications

Over the course of Mike’s career, the greatest change has been the communications revolution. “These days, there is so much information openly available that there is nowhere for a dodgy supplier to hide – the whole industry has become much more professional,” he says.

Better communications have also changed, and to a certain extent eroded, the role of the broker. “A broker was there to help a shipowner make good contacts. For a broker, it was very much a case of speaking to people face to face and meeting clients at the pub at lunchtime. In some ways, that made things more trustworthy because you knew the individuals you were dealing with, whereas nowadays, you have to rely on the details of the contract. “Today, any medium-to-large shipowner can make the contact themselves if they want to, so the brokers’ role has become much harder.”

At the same time, the type and the scope of information available to brokers and owners alike has expanded exponentially. When Ball started at Clarkson, the bunker market report covered just seven ports, and Platt’s bunker report was issued just once a week. Today, the stream of pricing information is constant, with many more variables affecting it. This inevitably leads to more challenges in assimilating and interpreting that information – and perhaps it is here that the future of the broker lies.

Increasing professionalism

One result of the increasing openness and availability of information in the bunkering business has been an increasing professionalism. However, this professionalism is not always appreciable to those outside the industry, who still have a tendency to treat bunkers as a commodity. “People are aware of the value and the cost of bunkers – but if they can fix a charter in any way, they will, and worry about the bunkers later,” Mike says.

“Bunkering is still regarded as the last thing in the world that [the shipping industry] needs to talk about. Nothing could be further from the truth.” This is why it is vital that IBIA develop its own qualifications. “It is important to provide a symbol for the outside world that says ‘this is a properly regulated profession’.” In some ways, the qualification is a status symbol, he says, demonstrating that there is a global standard that is applicable to everybody. Putting the qualification together is “taking much longer than we would like, but we will get there.”

The availability of good education and recognised qualifications is also particularly important because of the increasing number of people who come to bunkering from different backgrounds.

“There is a danger that people with a purely commercial background may be interested in ‘the deal’, rather than everything that goes behind it. Some traders have set a great example in the way they send people on courses to give them more background about how the bunker industry works,” he explains. “You don’t have to go to sea to have general knowledge about the bunker industry – although it can help when you have a serious problem. There is new technology coming in day to day that fresh minds can make the most of – but with the caveat that there needs to be solid market knowledge behind that.”

A buyer’s place?

As a bunker buyer, Mike is in the minority in IBIA, whose membership tends to be dominated by the supply side – although past chairmen have included several members from the buying side. Mike says this is somewhat disappointing, and it is an area where he hopes to see considerable growth. “We haven’t really sold IBIA properly to the buying side, although lots of our publications benefit buyers as much or more than the sellers.

“Owners have a plethora of organisations there for them already, so IBIA is not really on their radar. Smaller organisations can often be faster on their feet and more proactive. Personally, I think that as more and more owners begin to realise the significance of bunkers, and employ specialist bunker buyers, the more they will become aware of IBIA and the need to be involved. At the moment, it’s something of a chicken and egg situation.”

There is still some friction between buyers and sellers, Mike says, as a result of historical mistrust between the two. He believes that IBIA has a great role, if it can do it, in breaking down that cynicism. Nevertheless, it does come with some challenges: “We are all in the same industry, so the same problems apply to all of us, even if buyers and sellers are looking at those problems from different angles. Having both buyers and sellers in the organisation does mean that sometimes we do not take a position because to do so would disaffect 50% of the membership. We need to overcome that.”

Reaching the membership

In addition to expanding the membership of IBIA, Mike is keen to ensure that the membership is aware of what IBIA can do for them – and how they can communicate with it. “One thing IBIA has done extremely well is that it has made its way into representing the industry in various political organisations and forums. We are a legitimate organisation with real impact. Despite that, many members still see us primarily as the organisers of a Monday night bash every February. People come to us and complain that they’ve had legislation and regulations foisted on them without consultation. Often, IBIA was there, but the message has not got through that people can come to us with their concerns before the event. The problem is ensuring that people have access to us, and that they use that access. Maybe we do need more face to face contact. Perhaps I should pick up the phone to every single member and say: “Hi, I’m Mike, how can I help?” I want to get that dialogue between IBIA and its members going. IBIA has come on in leaps and bounds and the administration have done a fantastic job, but know I want to change tack slightly, and make sure that there is a focus on our members.”

Above all, he says: “I want to be seen as approachable. I can’t solve everyone’s problems, but I need to know about them – and that means sellers, traders, surveyors, buyers; everyone.”