AspectCTRM For Bunker Trading
As the bunker industry continues to regroup following an economic downturn with declining world trade, plunging freight rates, higher fuel prices and eroded profits – managing trading and risk, and reducing fuel costs for shippers is essential for survival. The high cost of alternative fuels, together with price volatility and the need to maintain product quality, stability and availability all pose challenges that have a direct impact on the profitability of both shipping and bunkering companies alike. AspectCTRM delivers the visibility and specialized tools for bunker traders throughout the trade process that are crucial for measuring and optimizing processes for the best possible margins.
AspectCTRM enables corporate performance management across your enterprise. Incorporating front, middle and back office functionality, this flexible application bridges gaps, connects departments, integrates data, enhances planning, expands intelligence, and produces visibility on processes. AspectCTRM for Bunkering incorporates these modules Trade Management, Risk Management, Physical Operations and Financial Operations plus adds customized functionality for the unique trading scenarios of bunker companies including:
- Company-wide visibility of stocks.
- Management of bunkering sales & controls.
- Consolidated risk management.
- Capture and report profitability on multi-product spot and term bunker deals, from contract through to settlement.
- Allocate cargo purchases, sales, internal movements and outturn adjustments by location.
- Report credit risks associated with new and existing customers.
- Create reports using access to timely local and global crude prices, bunker prices, port information, analysis and news. (Through our market data and decision support center add-on AspectDSC)
- Report key performance indicators and metrics.
What’s In Your Tank? The Value’s In The Visibility
Knowing exactly what stock is held in multiple tanks in ports across the world, together with product value, title and specifications, is critical to the profitability of a bunker supplier. Visibility of what’s available for sale or transfer is crucial for credit reporting and for the banks to understand who you’re doing business with. In today’s uncertain times, any shipper or supplier who made payment six months ago can easily be in trouble today. AspectCTRM inventory capabilities provide a real strength and competitive advantage in a market where spreadsheets have long been the norm for managing trades, and have created blindspots in the supply chain. AspectCTRM helps you understand profits and losses (P&L) and exposure in real time against changing inventories.
Other Risk Systems Are Too Complex, Too Expensive & Not Focused On Bunkering
Large energy trading and risk systems are often too complex. We’ve built a specific trading and risk module for the unique trading scenarios of bunker trades. AspectCTRM is the fastest-growing next-generation solution globally for downstream traders and buyers of oil, products, petrochemicals and other commodities. AspectCTRM for Bunkering combines all the required core functionality required for trading together with ultra-fast speed of implementation – typically a few days, not weeks or months – and a scalability that makes it cost-effective for small operations right up to the heavyweights that dominate the world’s bunkering hubs.
Aspect’s any-to-many scalability results from its Software-as-a-Service (SaaS) foundation which means bunkering operations never need to install and maintain software and IT hardware or the associated costs. Users simply but securely access AspectCTRM For Bunkering through a standard desktop or mobile browser. The architecture enables key elements of a fully end-to-end solution including fuel procurement capture, derivative-based risk hedging, and back office accounting to be in place and delivering savings within a matter of days.
But for many bunkering companies, large CTRM systems are often too complex. This can scare companies away from trying to implement a solution, leaving them to continue managing their inventories in the way it has been managed for many years – with spreadsheets. But this leaves value on the table. Spreadsheets don’t allow collaboration between traders, inventory managers and accounting. Spreadsheets don’t give good visibility, let alone provide the capability for what-if analysis.
Today’s Bunker Trader
Many of today’s bunker traders are responsible for the entire trade from the receipt of an inquiry for product to collecting payment. Some also have responsibilities for managing other traders and monitoring day-to-day risk. They need to be able to make arrangements for contracted supply with customers and ensure product is loaded for vessels from the right supplier. They also manage spot deals and so having real-time market data for crude oil, bunker prices and analysis is needed. Many of our customers access real-time and historical market data, charting tools and other news and exchange feeds through our market data portal AspectDSC. It’s on the same platform as their energy trading and risk bunker module. This provides a tremendous advantage in the market and cost-savings on the solution. The focus on price given today’s shipping conditions is very competitive. But traders are more than buyers and sellers. Clients are looking for advice for the best product and timely supply, so again real-time information from regional markets is critical for success. What may look like an obvious deal may actually result in getting caught in a line of backed-up vessels and supply delays. Other alternatives may be available and so information aids timely, smart decision making for the customer, and keeps that customer coming back.
Screen Caption: Real-time and historical data and charting tools integrated with energy trading and risk management systems provide instant access to bunker markets and your trades.
Integrated Oil & Bunker Fuels Pricing Data
An enterprise information management strategy is critical in the success of leveraging a CTRM system due to the time sensitive nature and accuracy of changing prices being applied to transactions and portfolios. Most AspectCTRM customers also subscribe to our AspectDSC Market Data & Analytics solution. AspectDSC is the decision support center for traders globally who access futures and spot prices – and chart trends for multiple commodities from sources like NYMEX, ICE, Platts, Dow Jones, CBOT, LME and others. This provides a seamless transfer of market prices used to validate trades and update positions. With the push of a button prices are uploaded from AspectDSC throughout the trading day. Many companies are manually updating this information which causes errors. Also many times corrections are missed when prices are re-released to the market as price corrections. AspectCTRM also integrates with external market intelligence providers, but the advantages of linking AspectDSC to trades as the pricing intelligence of record are unparalleled.
Screen Caption: This screen shows a simple multi-commodity trade spot order for marine diesel and fuel oil from Singapore. From order entry to settlement this trade is tracked through the system for shared information with your front and back-office teams.
Control and transparency are the keys to any successful trading operation. Here are the building blocks without which one cannot establish proper corporate governance and best practices. When I joined TNK one of my first priorities was to implement a new system of operations control through ASPectCTRM, which now, in my opinion, is the best in the market. It allows tracking of movements at any time: what was sold, who the seller and buyer were, and what the market situation was at that moment, and all this marked-to-market. Transparency is one of the keys to making the right decisions, absolutely vital in a competitive market in which one tries continuously to optimize results.
We looked at a number of alternatives but felt that Aspect’s SaaS approach was the best fit with our needs. It’s proved highly affordable, very fast to implement and it’s enabling us to more accurately monitor our exposure and manage the business more effectively. Having talked to other Aspect users, we have confidence in the solutions’ ability to support us with additional functions as we continue to grow.