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Slow steaming hits bunker sales Going gets tougher for Rotterdam


Europe, the region's stagnating economy has taken its toll on the port's performance over the past few years. Rotterdam port is struggling to reverse a


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consistent decline in marine fuel sales since 2007, according to data from the Port of Rotterdam Authority. Since the port's heyday back in 2006, where


bunker sales touched 13.61m tonnes, sales have fallen consistently until last year. Bunker sales, including high-sulphur fuel oil and distillates, tumbled to 11.9m tonnes in 2010, down from 12.17m tonnes in 2009. “The decline in 2010 is a bit less dramatic than


in previous years. A large part of the decline can be attributed to the recession. As a result, ships were laid up,” a Rotterdam port official says. “Furthermore, large container vessels have started to sail more slowly - slow steaming.” Slowing down the speeds of ships mean lower


bunker fuel consumption. A 10% reduction in speed saves 21% of fuel used while a 20% speed reduction saves as much as 36%. “With consumption of 250-300 tonnes (of bunker fuel) a day, that makes quite a difference,” says the official. With greater trading activities happening in Asia


and gloomy economic progress in Europe, Rotterdam's slowdown in bunker sales is made worse by tighter credit lines given from the suppliers to the purchasers. “Bunker buyers tend to shun Rotterdam due to the shorter payment term of 21 days from some suppliers, compared to Asian suppliers who are offering 30-day credit,” says Simon Neo, regional manager Asia at Integra Fuels, the bunker purchasing unit for tanker operator Navig8. In 2005, suppliers in the Amsterdam-


Rotterdam-Antwerp (ARA) region introduced 21-day credit terms to their customers, instead of the 30-day that remains the industry norm. Suppliers even toyed with the idea of shorter


credit terms of 14 days after the onset of the 2008 global financial meltdown, which led to a virtual strangle on credit lines worldwide. The reason for shorter credit terms from ARA


suppliers is because they only have five days to pay for the bunker products they received from the ARA barge market. The bunker buyers, on the other hand, have a lengthier period of time to pay the suppliers after bunkering is completed. The move by the EU to do its part for the


otterdam, the second largest city in the Netherlands, is the largest seaport and bunkering port in Europe. But despite Rotterdam's reigning title in


environment has also contributed to Rotterdam's decline in bunker sales. As of 1 January 2010, ships berthed in EU ports, including Rotterdam, are barred from burning heavy bunker fuel or diesel oil in their auxiliary engines, in accordance with IMO's MARPOL Annex VI regulations. Heavy bunker fuel 380 cst grade typically


accounts for the lion's share of a port's total bunker sales volume. With Rotterdam now mandating ships to burn


1% maximum sulphur content bunkers, the port has lost a portion of sales generated by the high- sulphur 380 cst grade. The consolation is that marginally higher sales of the more expensive low-sulphur grade have managed to claw back some volumes. Notwithstanding the decling performance of


recent years, Rotterdam is still recognised as the world's second biggest bunkering port behind Singapore, though its nearest rival Fujairah claims to sell higher volumes. The annual bunker sales volume from the UAE


port of Fujairah, however, was never an official figure recorded by the local port authority. Sales volumes are merely estimates from the port officials, and the estimates are bold – 24m tonnes of sales in 2010, a jump from 18m tonnes in 2009. “Rotterdam remains a very vibrant market with efficient bunkering facilities,” Neo says, adding that Rotterdam remains one of Integra Fuels' key refuelling ports for its bulker tramp trade. The port authority has predicted growth in the


container and other cargo throughput volumes, which will directly lead to greater demand for bunkers. A recent strategic document prepared by the


port gazes into the next 20 years and envisages the port to become a 'Global Hub' and 'Europe's Industrial Cluster' by 2030.


Seatrade Bunkering Report 2011 11


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