BunkerEx has announced the launch of a new, dedicated service for setting up credit lines for bunker buyers with their trusted and verified suppliers*. This can be found at bunker-ex.com/credit.
The service utilises their full database of information to determine:
Which documents are needed to set up credit (as all suppliers are different, and some need more documents than others).
How many potential credit lines a buyer should have for good, competitive coverage.
If a shipping company is not keen on giving out their financials, they provide a back-end algorithm that determines the maximum supplier coverage a buyer can achieve from a minimum amount of credit lines.
For example, a buyer taking bunkers in 10 different ports does not require credit lines with 10 different suppliers. In a matter of seconds, BunkerEx’s technology could tell you that opening lines of credit with only 2 of their verified suppliers would provide coverage in all 10 locations.
Furthermore, the system also keeps track of which suppliers their customers have credit with and automatically suggests if they need to improve their coverage in a certain port. This is crucial as the supplier landscape is constantly changing (e.g. for new suppliers, mergers, or existing suppliers opening in new locations).
The Need for a Credit Service
The company started this service because overtime, it noticed that credit is the single largest hurdle stopping buyers from dealing directly with physical suppliers, which would increase their coverage and achieve a lower price on their fuel. Many bunker buyers can remain stuck with just 1-2 suppliers because of credit, significantly lowering the competitiveness of their enquiries (and thus increasing their bunker bills).
Research indicates that much of the time it’s not because the supplier won’t give credit, but because the buyer hasn’t had a partner to facilitate the set up.
Additionally, the credit situation has changed dramatically over the last 3 years: Oil prices are lower; interest rates are down and there is more data and transparency available on counter-parties now than ever before. It’s why credit reporting agencies such as Infospectrum keep growing. A supplier who wouldn’t want to offer credit 5 years ago may do so now, but it’s up to the buyer to be proactive to begin the process.
The BunkerEx Credit Service is there to make it faster and easier for shipping companies, utilising their existing relationships with the suppliers to make it more painless. More often than not, the benefits of setting up a new line with a supplier is justified after just a few enquiries.
To find out more, visit bunker-ex.com/credit
*BunkerEx has a strict compliance procedure comprising of 17 different thresholds, to vet all their suppliers (available on request to clients only). Claim ratios, T&Cs and trading activity are some of the parameters actively monitored.
Source: Hellenic Shipping News.