Mon 11 Nov 2013 09:27

Financial prudence the key to bunker trade success


GAC Bunker Fuels director to stress the importance of balancing the numbers in upcoming event.



The importance of balancing the numbers for a successful bunker fuel trading operation will be stressed by GAC's Nicholas Browne when he shares his experience at the Lloyds Maritime Academy Bunker Management School this week.

In his speech, the Global Director of GAC Bunker Fuels is due to outline what bunker traders need to keep in mind making the judgement calls they face every day. What are the criteria for granting credit to a new customer? How can they minimize their risk exposure? What checks should be made before accepting a new client?

In a separate session, Browne is expected to discuss the various purchasing methods used in today's bunker trade including reverse auctions, panels and price pressing.

According to GAC, his central theme will focus on the bottom line. Getting prompt and pain-free payment for delivered supplies has always been a thorny issue in the bunkers trade. In the current financial climate of volatile prices, strict emission controls and geographical spread, traders must be sure that their clients can and will pay up if they want to secure their own financial stability and, ultimately, survival.

"The bunker trade has become more complicated in recent years," he remarked. "On average, bunker costs represent about 70% of a vessel's purchasing expenses and as rising prices mean tighter margins, the only way to grow business is to make the money you have work for you. Delayed payments, extended credit lines and defaults can put an end to serenity even of the biggest market players. Traders need to think smart when selecting their suppliers, and be aware of the warning signs to watch out for before offering a credit. Cash – and its healthy flow – is king."

Browne will join other trade experts sharing their expertise and experience at the Bunker Management School in London on 11-13 November.

Over the course of three days, the key focus will be on three pillars of the bunker trade: optimising operations, exploring commercial trends, and understanding the legal framework.

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