Danish start-up Bunker Metric has rolled out new functionality under its bunker procurement optimisation tool, BunkerPlanner, to assist vessel operators in reducing costs under any market combination of time charter (TC) rate and bunker prices.
BunkerPlanner calculates attractive bunker port calls that can be induced on a voyage in relation to the costs of bunkers, port calls, barges, and deviations, while also taking into account a speed up of the vessel to meet a fixed ETA at next port call. The bunker price of any additional port call must justify any speed-up, considering the vessels bunker curve and extra distance to be sailed.
This makes sense in most high time charter equivalent (TCE) markets, where the expected TC rates exceed the extra bunker cost of speeding up. However, there is often an attractive trade-off by adding a bunker port call and delaying scheduled ETAs while maintaining a fixed speed. With this approach a bunker buyer would attain a lower TC rate but would save on bunkers – a beneficial strategy in low TC environments.
One example includes a capesize bulker sailing from Port Hedland, Australia to Qingdao, China and returning, at a sailing speed of 13 knots.
At TCEs below $10,000, the most attractive bunker port is Singapore. At very high TCEs, the optimal strategy is to avoid a bunker-only call and lift required bunkers in Qingdao during cargo operations. The total bunker costs change from $ ~460,000 at very low TCE rates to $476,000 at higher TCE rates. By identifying the correct strategy, an operator can potentially save more than $16,000, equivalent to over $200 TCE/day.
“Deciding on the cheapest port to bunker is a complicated calculation, which should not be reduced to choosing the lowest $/mt. Especially interwoven are the trade-offs related to time charter rate, speed/consumption, deviations and price, and are only possible to accurately overview with good system support. With BunkerPlanner’s tool you can easily save hundreds of $ in TCE per day, especially in low TC markets,” explained Fernando Alvarez, BunkerMetric co-founder.
The bunker prices in the example were locked on the April 8, 2020. In the currently volatile bunker market this rapidly changes and early/mid May, South Korean ports would be preferable on this trade, depending on TC rate. Different loading port in West Australia and discharge in North China, may also give markedly different final results.
With this new functionality, which is already available to Bunker Metric’s customers, BunkerPlanner can better assist vessel operators to attain significant bunker savings.
“By including TCE in BunkerPlanner’s calculations, advice can also be given bearing in mind the intricate interplay between the optimal speed for a specified voyage, the TC rate, bunker consumption, bunker costs, banal usage and ECA zones. Considering all these factors together is powerful, and unique for a maritime digitisation tool,” said Christian Plum, Bunker Metric co-founder.