World Bunkering > News > Summer 2011 > Going with the flow?

Although the likelihood of continuing high bunker prices is bad news for some, it has nonetheless meant a high demand for bunker surveyors’ services and may indeed make these services even more valuable to owners and operators.

According to Captain Rahul Choudhuri, regional manager for Asia Pacific at DNV Petroleum Services, “in general, we have seen a much larger demand for our bunker quantity survey work over the last few years. This covers the key bunker ports of Singapore, Fujairah and Rotterdam. Other upcoming bunker ports are showing demand too”. In common with other sectors of the shipping industry, he sees one of the key issues as being supply of good quality surveyors going forward. “We take considerable time in choosing and training our surveyors and meeting demand is not easy. But we will not compromise on quality and integrity. So, we have had to turn away some jobs.”

“The work of the bunker surveyor will evolve with flow metering technology,” Captain Choudhuri says, “but these are just technologies at the end of the day, and until and unless we have a ship that does not need human beings anymore to sail across the seas, we will need these surveyors because bunker fuel is just too expensive and important in shipping operations today. Flow meters come with their own limitations as well.”

“This need for surveyors is linked to the quality of ships’ crews today, especially with the application of bunkering rules. In fact we see a deteriorating trend in this respect.” “The shift to low-sulphur distillates will also mean more careful quantity assessment – just like crude oil cargoes we now have higher value and so higher risk.”

High bunker values also raise concerns for surveyors on disputes on quality issues and these are likely to continue for the moment as the debate over flow meters versus traditional measuring methods continues. Educating crews on the correct management of bunkers on board is also stressed by Tim Wilson, product manager for Fobas. “Education, experience, all that is important and it is not easy to get that across to crews.” Fobas uses Intertek to carry out bunker surveying on its behalf on a worldwide basis. Bunker surveyors have an important role to play in educating crews about bunkers, so it is essential that they themselves remain up to date with the latest developments in technology. IBIA runs courses to this effect.

The total volume of bunkers sold in the Port of Singapore grew 12.3% to reach a record 40.9 million tonnes, last year compared to 36.4 million tonnes in 2009. This is the first time that bunker sales crossed the 40 million tonnes mark, the Maritime and Port Authority of Singapore estimated in January. The record figures, at a time of economic downturn and ships going into lay-up are impressive and high prices for bunkers mean quality assurance programmes are important and surveyors have a role in keeping their clients losses to a minimum.

With rising bunker costs, and the potential for disputes over quality, the surveyor’s services continue to be in demand, even with the widespread use of flow meters. Surveyors can also play a role in ensuring that the flow meter system is working well and mitigate the chance of disputes over whether the flow meter approach is more effective than more traditional measurement methods. Bunker quantity testing is also proving to be an important area of operations as owners and operators seek to ensure that they are actually getting what they paid for.

The importance of the level of bunkers passing through the port has encouraged the development of bunker survey services in the Singapore region. One of them, DNVPS, has just celebrated the 30th anniversary of the launch of its residual fuel testing service; it received its first two samples for testing on 5 January 1981 from the Mosbrook. DNVPS managing director Tore Morten Wetterhus commented at the time of the anniversary that although fuel management was increasingly sophisticated “operators should still observe the basic precept of testing bunker quality delivered to their vessels.”

Global Marine Inspections Ltd is one company that is expanding its coverage in the Far East. Its new office in Singapore became operational at the end of March and it has also opened offices in the South African port of Durban and in Algeciras. The company has also expanded its services in Korea. According to N. Shankar, managing director of Universal Marine Surveying and Consultancy (S) Pte Ltd (UMSCPL): “With the industry accreditation and other regulations, survey practices are well regulated, with the respective companies maintaining the standards, and any non-conformance can result in drastic penalties”. With the increased prices and upward pressure from the recent Japanese disaster, he said he believed the surveyor’s role to ensure quality and quantity was a “worthwhile expense for owners, operators and charterers to consider”.

As far as trends in either demand for surveyors’ services or in the number of off-spec bunkers are concerned, he says there has been a slight increase in 2011 in terms of the number of bunker surveys Universal Marine Surveying & Consultancy has conducted. “Our company was not involved in any de-bunkering operations in the past year and quality issues are well regulated and enforced by MPA,” he says. The company had heard of de-bunkering of contaminated fuel incidents which were probably either the fault of the vessel or due to quality issues. Singapore bunkering standards and accreditation represent an effective implementation of sound professional ethics, he believes.

The Singapore Accreditation Council regularly publishes lists of those who have received formal accreditation, and those who have been struck off the list. What of the professional situation between surveyors? “We notice price wars,” he says. “We, for our part, have a different service attitude and culture strategy and we pride ourselves in our inimitable approach.”

In Mr Shankar’s view IBIA should handle issues pertaining to bunker quality with greater emphasis on environmental protection and to engage Asian participation in many policy matters. Commenting on the state of the market, an industry source said: “There is still a demand for bunker surveyors, particularly with the introduction of low-sulphur fuels and changes to specifications. Most of the larger inspection companies are engaged in bunker surveys either working directly with the vessels’ owners and charterers or through classification societies. The market is fairly competitive, with the owners trying to keep their costs to a minimum to reflect the current price of bunker fuel oil without jeopardising the workings of their fleet.”

DNVPS consultant Dr Rudy Kassinger was quoted in March as saying that the price premium for low-sulphur distillate fuel could be as much as $850 per tonne, depending on the price of oil. This means that using abatement technology such as scrubbers is becoming a more and more attractive option.

Commenting on the availability of low-sulphur fuels, the industry source said that: “The low-sulphur market is mainly confined to the ECA region and the analysis of these fuels is tightly controlled. The oil companies appear to be meeting the demands of low-sulphur fuel however, I am sure that the owners pay a premium for this fuel and only use it when they are forced to.”

Imports of low-sulphur fuel oil into the US are expected to rise when the ECA comes into force in 2012, although the 0.1% sulphur cap will not be in force before 2015.