Thu 29 Nov 2012, 13:07 GMT

Relationships and trust key to managing counterparty risk


Møller says industry must be wary of developing a 'too scientific' approach, which may stifle deals and progression.



Dynamic Oil Trading, the new global trading company for marine fuels and lubricants, headquartered in Singapore, today highlighted the importance of developing close relationships as a means of managing counterparty risk.

“Liquidity and credit are the single biggest issues within the shipping industry when it comes to fuel supply,” said Lars Møller [pictured], CEO, Dynamic Oil Trading.

“Being able to provide the best credit terms is a considerable differentiator for a fuel supplier, but it has to be done based on a trustworthy relationship between the supplier and the customer. Due diligence as well as access to financial information is clearly vital, but the foundation for obtaining this is trust,” continued Møller.

As liquidity becomes tighter, Dynamic Oil Trading says ensuring the financial viability of those partners operating in the fuel supply chain is of paramount importance. However, the company believes there has to be a balance between forensic analysis that stifles deals at one end of the spectrum, versus a simple 'handshake', which could threaten business continuity.

“Dynamic Oil Trading is in a fortunate position, as we have the financial backing, liquidity and capital that enables us to provide customers with the best credit terms on deals. Understanding counterparty risk is critical, but we must be careful that it does not become too scientific, which threatens deals. Of course, where a company is not financially viable, you walk away, but in conjunction with sensible due diligence and financial analysis, we believe that building close, personal and trustworthy relationships must be the foundation of validating counterparty risk," said Møller.


Decab Hub and MMMCZCS logos. Lloyd’s Register and Maersk Mc-Kinney Møller Center launch ammonia safety and training resources for shipping  

New tools aim to help operators build the safety management and competency frameworks needed for ammonia-fuelled vessels.

Kevin Dohmen, IBT Bunkering & Trading. IBT Bunkering & Trading appoints Kevin Döhmen to manage new Singapore office  

Döhmen tasked with developing IBT’s operation in the Asian city-state.

Peak Skarv 3 vessel. Peak takes delivery of third S-class vessel and cuts steel for ammonia-fuelled ship  

Norwegian operator marks two events at Chinese yard as ammonia-powered newbuild programme advances.

Launching ceremony of Minerva Helen. New Times Shipbuilding launches LNG dual-fuel tanker for Minerva  

112,500-dwt Minerva Helen launched at shipyard in Jiangsu, China.

Hansa Drejoe vessel. Leonhardt & Blumberg equips first of four newbuilds with Econowind VentoFoils  

German shipowner installs wind-assisted propulsion technology aboard general cargo vessel Hansa Drejoe.

Green Pearl vessel at Port of Civitavecchia. Axpo and Vitol launch LNG bunkering at the Port of Civitavecchia  

Operation marks the extension of Axpo’s LNG bunkering network to third major Italian port.

Grande Pacifico vessel. Grimaldi takes delivery of ammonia-ready Grande Pacifico  

9,800-ceu ship is the largest PCTC in the Neapolitan Group’s fleet and the first of five sister vessels on order.

Regional seminar on alternative fuels and new technologies. IMO seminar in Trinidad and Tobago trains Caribbean maritime educators for the alternative fuels era  

A five-day regional seminar in Port of Spain addressed ammonia, methanol and hydrogen training for seafarers.

Summit Arbutus vessel. Corvus Energy wins 40 MWh battery contract for BC Ferries’ new biofuel-compatible Summit Class vessels  

Norwegian battery supplier to power four new hybrid-electric ferries for Canada’s BC Ferries.

Fleetzero Leviathan Battery Energy Storage System (BESS). ABS issues product design assessment for Fleetzero’s Leviathan battery system  

The first US-manufactured lithium iron phosphate marine battery system receives classification society approval.