World Bunkering > News > Summer 2010 > What role for surveyors?

The worst shipping slump for years can hardly be seen as good news for anybody, and bunker surveyors in the many ports where volumes have fallen have seen their business decline as well. There are, though, counter balancing factors. When times are tough and, as in this recession, bunker prices rise to very high levels, shipowners are more inclined to spend out on the services of surveyors as even discrepancies of a few tonnes start to add up to large sums of money.

Higher fuel prices, however, are surely one reason for the growing interest in the use of flow meters. If these devices become standard it would seem logical that the need for surveyors taking ullages in the traditional way may disappear. The surveyors who World Bunkering talked to for this article do not seem to accept they are on the way out. One who works for a large ARA-based firm says that in his patch surveyors are needed to represent the seller of the fuel who will normally charter the delivery barge. And as well as checking quantities, he is needed to ensure samples are taken correctly.

High prices drive survey demand

Singapore is a major centre not only for bunkering but also bunker surveyors, with companies involved ranging from the largest surveying outfits to medium and small-sized businesses. It is also one of the few places that has bucked the global trend and actually increased bunker sales last year.

Daniel Phua, managing director of Potential Inspection Services says: “There has been strong year-on-year growth with Singapore bunker sales increasing 4% from 34.9 million tonnes in 2008 to 36.4 million tonnes in 2009. This trend has continued for the first few months for 2010, averaging 3 million tonnes a month. Not surprisingly, the need for quantity and quality assurance programmes also saw a correspondingly strong demand.” The economic downturn has had little effect on his business, Mr Phua says: “It has minimal impact on my business as my customers have been with me for some years and they value my services and support to them.”

He adds: “As the price of bunker fuels remains high during the recession, the demand for surveyors also remains high. Owners are more likely to engage surveyors to protect their interests and reduce any losses.”

And he is optimistic about the future, noting: “The price of bunkers is projected to continue to strengthen over the years and I do not see it coming down any time soon. As the cost for each bunker stem can run to hundreds of thousands of dollars, it is only natural for buyers, whether shipowners or charterers, to take measures to protect their business interests and be assured that what they pay for is what they get in terms of the quantity and/or quality of the bunkers received. It therefore follows that the services of surveyors will continue to be needed by bunker buyers.”

Are flow meters a threat?

So even with the widespread introduction of flow meters will there still be the same need for surveyors? “Most definitely so, as regardless of the measurement method used to calculate the bunker quantity, buyers still need to ensure their interests are protected. But of course I expect there will be realignment and changes with regards to the scope and role of surveyors which arise from the different technical and operating criteria when a mass flow meter is used e.g. calibrations and verifications.”

On that theme Mr Phua adds: “I definitely see the need to further train surveyors, not only for the use of mass meters. I believe surveyors need to constantly keep pace with future developments to remain competent to discharge their duties professionally. I am glad to see organisations such as IBIA being actively involved in undertaking the training of surveyors not only in Singapore but also globally.

“I generally support any industry initiative to enhance productivity and improve measurement processes for the industry, including ongoing trials to test if mass flow meters could be used to measure bunker quantity,” he says. “However, the challenge is that mass flow meters can only be accepted by all stakeholders as an alternative measurement process, if and when they are proven to be a robust, cost effective and reliable method to achieve comparable accuracy for custodial transfer quantity of bunkers.”

Silver lining

DNV Petroleum Services’ regional manager (Asia-Pacific), Rahul Choudhuri, says his company saw a 30% increase in the demand for bunker quantity surveys last year, compared to 2008. “Our cumulative bunker quantity surveying volume is now in excess of 62,000 jobs after 22 years in the bunker quantity measurement business”.

Capt Choudhuri also reports a silver lining to the cloud cast over the industry by the shipping slump. He says: “During the economic downturn, fuel buyers were more careful about checking the actual quantity delivered to their ships compared to what they paid for. This resulted in an increased demand for bunker quantity surveys. The same reasoning applied to our bunker quality testing volumes, which remained stable despite the challenging market conditions last year. “

He adds: “Our figures suggest an increased awareness of the benefits of bunker quantity surveys amongst shipoperators, who are now less tolerant towards losing even small bunker quantities in the physical delivery. “I think the future is bright for bunker surveyors,” says Capt Choudhuri. “The market now needs more quality practitioners who can be trusted to act professionally. There are also stricter regulations in bunkering and a surveyor can play a key role in training shipboard staff, especially since the ongoing shortage of experienced shipboard crew could be exacerbating the lack of familiarity about bunkering requirements. A good example is the inadequate understanding of proper bunker sampling procedures.”

Moving up the value chain

Like Mr Phua, Capt Choudhuri believes there will still be the same need for surveyors if and when flow meters become generally used and accepted. He says: “New and complex systems could make it even more necessary for surveyors to verify that such equipment is in fact working well and meeting calibration criteria. Experienced surveyors are knowledgeable about bunkering requirements and are therefore in a good position to take on this additional quality control role in flow metering. Additional training for the surveyors would of course be required. DNV Petroleum Services would be very happy to explore the opportunity of moving our surveying staff up the value chain.”

Dispute handling is a very important aspect of marine fuel management, he points out, but there is no recognised standard stating that a flow meter is better than the conventional bunker quantity measurement techniques in use today. So, he concludes: “It may well be that disputes will still need to be sorted out using ‘manual’ methods. Even advanced flow meters use conventional liquid measurements for calibration.”

Capt Choudhuri stresses: “As regards the accuracy of quantity measurements, a conventional measurement system can in fact be more accurate than a flow meter. On the other hand, if properly managed, a flow meter would improve efficiency in the quantity verification process during the fuel delivery. The key point of surveying is to ‘trust but verify’ and this does not change with technology. It is the people and processes that will build the trust.”