On the back of a year of continued growth in usage, the digital procurement of fuel within the shipping industry is set to further increase in 2025, says AuctionConnect, the world’s first
On the back of a year of continued growth in usage, the digital procurement of fuel within the shipping industry is set to further increase in 2025, says AuctionConnect, the world’s first and leading bunkering online auction platform.
Throughout the course of 2024 AuctionConnect has seen an increase in interest and uptake from fuel procurement teams. Users have continued to use the AuctionConnect digital auction platform to drive lower costs in fuel procurement, while further embracing the online auction site’s capabilities to support and drive data collection and analysis that can inform and support strategic decision-making for fuel procurement.
AuctionConnect’s simple online marketplace has made it very easy for procurement teams to adopt digital technology to support price negotiations and realise efficiencies in their processes. The auction site has helped procurement teams to improve planning for fuel buying and more efficiently organise negotiations with suppliers in flow ports. In addition to securing savings through reverse auctions that deliver the lowest possible price of fuel, buyers that run auctions a week earlier than average can realise prices that are USD1-2 per tonne of fuel lower than auctions running closer to the anticipated physical bunkering date.
“While, over the past few years we have seen a significant increase in the use of digitalisation across the bunkering supply chain to drive efficiencies in production, transportation and distribution, the process of procurement and the actual transaction has lagged,” says Per Funch-Nielsen, Director, AuctionConnect.
With marine fuel being the largest operating cost to ship owners, which is set to rise exponentially on the back of the transition to future fuels, the digitalisation of price negotiations offers procurement teams a vital way to manage costs as efficiently as possible. A simple online tool, such as the AuctionConnect marketplace, offers a plug and play bunkering procurement solution that aligns quickly and seamlessly into existing digital technologies, with no upfront financial or time investment.
Procurement teams can run auctions that ask fuel suppliers to bid to provide specified fuel at the lowest price per tonne. The buyer controls which suppliers they invite to the auction, so they only need to work with suppliers they know and trust. As the automated auction progresses, suppliers can see the value of the bids against them, while the names of bidders are kept confidential. If a supplier is outbid, they are notified and can provide a counterbid. A chat function allows buyers and suppliers communicate with each other to build those connections that are essential to the smooth operation of the bunkering industry. On average each automated auction lasts 20 minutes.
Per Funch-Nielsen continues: “We’re now seeing a mindset change within bunkering. As the shipping industry becomes increasingly complex, we’ve seen how proven technologies and digitalisation can simplify all areas of operation. This is now cascading down into the bunkering process, and while the traditional methods of procurement and the importance of the relationship between the buyer and supplier will always exist, we are seeing how simple technology solutions can significantly enhance how things are done and deliver valuable commercial benefits.”
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