Marine fuel trading companies may need to respond to the persistent fall in their margins by cutting staff numbers, according to industry veteran Adrian Tolson, senior partner at consultancy 2020 Marine Energy.
In a presentation at S&P Global Platts European bunker fuel conference in Rotterdam Wednesday, Tolson characterized the period from OW Bunker’s collapse in late 2014 to 2020 as one of “disintermediation” in the supply chain.
He said trading companies will be increasingly squeezed out as fuel producers and cargo traders seek to bypass them and deal directly with shipowners.
The resultant drop in profits for traders will mean many will need to lose staff, he said.
“Their productivity has to change — they still have too many employees,” Tolson said. “The reality is it’s an overstaffed labour force.”
“Bunker traders do still make money,” he added. “But you’ve got to rationalize costs.”
Bunker fuel traders may have been selling as much as 140 million mt/year of fuel in 2014, but their market share is rapidly declining, Tolson said.
“That has clearly contracted — you can see it in the volumes reported by World Fuel Services, as well as anecdotally,” he said.