Global Bunker Fuel - Procurement Market Intelligence Report

  • ID: 4421052
  • Report
  • Region: Global
  • 96 pages
  • SpendEdge
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This procurement research report on the global bunker fuel market provides procurement professionals with up-to-date information about market shifts and potential risks, as well as in-depth knowledge of products and services. This report provides a detailed analysis of the supply market, procurement challenges, and procurement best practices which can help in planning and executing category management activities. It also focuses on the cost-saving aspects of procurement and on providing insights that can lead to optimization of category spend.

Key Features of Report:

  • Supply Market Insights
  • Procurement Best Practices
  • Cost Saving Opportunities
  • Pricing Models
  • Negotiation Strategies
  • Category Risk Analysis
  • Key Supplier Analysis
  • Supplier Capability Matrix

Bunker Fuel - Category Spend Analysis

According to procurement research analysts, the growth of the container ship segment due to flexibility in movement of containers is one of the key factors driving the bunker fuel market growth. Bunker fuel market is experiencing substantial demand from the container ship segment. The ability to move containers easily between lorries, trains, and ships is resulting in the high adoption of containers in the transportation of goods and products, which is making container ships the preferred mode of transport for traders. Also, expenses related to procurement of containers have declined considerably over the years due to a drop in the prices of metal, which is driving their adoption. In terms of geography, the container ship segment is experiencing substantial demand from APAC. Ports in Singapore and Shanghai are business hubs in the region and account for the majority of container ship traffic. An increase in seaborne trade between major economies such as India, China, the US, and the EU is also contributing to the growth of the container ship segment. This growth of the container ship segment is resulting in greater demand for bunker fuel.

The increase in in offshore crude oil exploration and extraction activities is another growth driver for the bunker fuel market. The number of projects associated with offshore crude oil exploration and extraction has increased considerably over the past five years. This can be attributed to the desire of suppliers to increase their production volumes of crude oil to enable them to compete on pricing with alternatives such as LNG. Also, countries such as Ireland, Romania, Israel, and India, which relied heavily on imports of crude oil, are investing in new offshore projects associated with exploration and extraction of gas and oil to reduce their dependence on imports. The increase in these activities is expected to continue, as the prices of crude oil have started to recover since 2016 after experiencing a decline during 2012-2015. This is likely to lead to greater consumption of bunker fuel, as oil rigs use large quantities of bunker fuel in their operations.

Bunker Fuel - Procurement Best Practices

Buyers of bunker fuel should adopt systematic procurement practices that will allow them to exert better control over suppliers, irrespective of the prevailing market conditions, as this will help them obtain cost benefits and procure better quality products.

One of the procurement best practices for buyers in the bunker fuel market is to engage in long-term contracts with suppliers. Buyers should engage in long-term contracts with suppliers to procure discounts on bunker fuel prices per unit volume and value-added services such as training for workers regarding handling and use of bunker fuel and assist in price forecasting. Long-term contracts also enable buyers to optimize the threshold prices (maximum and minimum price after which price readjustment clause is used) and percentage (price until which the supplier absorbs any fluctuation). It also leads to buyers and suppliers forming strategic alliances to achieve higher cost savings.

Bunker Fuel - Procurement Challenges

According to this procurement research report, the volatility in crude oil prices is one of the major procurement challenges faced by buyers in the bunker fuel market. As bunker fuel is a derivative of crude oil, it follows the same price trend as that of crude oil. The correlating factor between spot prices of bunker fuel and crude oil is close to 0.95, which is a prime indication that bunker fuel prices are heavily dependent on prevailing crude oil prices. Factors such as political instability in the gulf and shale gas revolution in the US have resulted in volatility in crude oil prices over the past five years. For instance, global crude oil prices experienced a decline of close to 55% between April 2014 and January 2015. A similar trend was observed in 2016, where prices of crude oil kept fluctuating. The volatility in crude oil prices affects the global bunker fuel market adversely and makes both suppliers and buyers look for alternatives to reduce the risks associated with a sudden rise in prices. Also, recent technological developments, such as dual fuel engines and electric engines, have led to an increase in the use of alternative fuels such as solar, wind, and LNG to power ships. At present, suppliers are focusing on the adoption of steps to mitigate this challenge, which includes hedging, forward contracting, and price and demand forecasting.

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  • Cognex
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  • Fujitsu
  • Honeywell
  • Zebra Technologies
  • MORE
Part 1: Category at a Glance
  • TAKEAWAY 01: Market Overview
  • TAKEAWAY 02: Demand and Supply Snapshot
  • TAKEAWAY 03: Key Market Dynamics
  • TAKEAWAY 04: Supply Market Highlights
  • TAKEAWAY 05: Pricing Insights
  • TAKEAWAY 06: Procurement Insights
Part 2: Scope of the Report
  • Category Definition
  • Research Methodology
Part 3: Market Insights
  • Category Spend Analysis
  • Category Maturity by Regions
  • Demand-Supply Shifts
  • Regional Demand-Supply Snapshot
  • Global Molasses Production Hubs
  • Market Developments
  • Regional Impact of Trends
  • Key Category Growth Drivers and Corresponding Regional Impacts
  • Major Category Growth Constraints and Corresponding Regional Impacts
  • Key Current Technological Innovations
  • Major Regulatory Frameworks
  • Strategic Sustainability Practices
  • Porter’s Five Forces
  • PESTLE Analysis
Part 4: Supply Market Insights
  • Supplier Operational Capability Matrix
  • Other Prominent Suppliers by Region: Operational Capability Matrix
  • Supplier Functional Capability Matrix
  • Other Prominent Suppliers by Region: Functional Capability Matrix
  • Key Clients/Partners
  • Supplier Cost Breakup
  • Supplier Positioning Matrix
Part 5: Pricing Insights
  • Pricing Models Snapshot
  • Pricing Models - Pros and Cons
  • Indicative Pricing
Part 6: Procurement Insights
  • Major Category Requirements
  • Major Procurement Pain Points
  • Category Sourcing Evolution Matrix
  • Procurement Best Practices
  • Cost-saving Opportunities
  • Supplier Selection Criteria
  • Category Negotiation Strategies
  • SLA Terms
  • Supplier Evaluation Criteria
  • Category Risk Analysis
Part 7: Top Five Suppliers
  • ExxonMobil
  • Royal Dutch Shell
  • Total
  • Gazprom Neft
Part 8: Appendix
  • Glossary
  • Key Notes
  • About Us
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