Mette Frederiksen

Stephen Robinson, a seasoned bunker industry leader, recently joined Tankers International in a pivotal role. In this insight we delve into his vision for the future of fuel procurement, the challenges posed by decarbonisation, and how Tankers International plans to stay ahead of the curve.

What made you join Tankers International? And how do you see your previous experience translating to this role?

It feels like a full-circle moment in my career. After over 30 years in the bunker industry, starting from bunker trading and working through a variety of senior roles, I’ve developed a broad range of experience – from building physical bunker supply operations to managing large-scale Government joint ventures. I’ve had a relationship with Tankers International for 20 years supplying their vessels in key strategic ports and the TI Pool has always stood out as a well-run, highly professional operation.

This opportunity felt like a natural progression for me. I’ve always respected TI’s work and the people involved, and it’s a chance to apply my knowledge and network to something exciting. Personally, having spent over 20 years in Dubai, I was thinking about returning to the UK, but knew it would have to be for the right opportunity. This role not only allows me to apply my solid technical background in terms of physical bunker supply and fuel procurement , but also to leverage long, established relationships with many physical suppliers and industry players, which I know will be an advantage for Tankers International and align with our plans to develop new initiatives going forward.

Given the rising complexity of fuel procurement and the shift toward alternative fuels, how do you plan to leverage your established relationships with physical suppliers to support TI’s fuel strategy?

While the shift toward alternative fuels is important, I believe we need to first focus on optimising our existing approach to traditional fuels. The strategy will be to aggregate demand across the pool and use that scale to secure pricing advantages from suppliers. With the significant tonnage we handle, particularly in key markets like Singapore where I have strong relationships, we can be more creative with forward pricing and risk management, exploring opportunities beyond just looking for marginal savings from physical suppliers.

We also want to leverage these established relationships to negotiate more strategic partnerships, offering more value to the pool than just price. For instance, we can work with larger suppliers in regions like Singapore, Fujairah, and Rotterdam, ensuring we’re ahead of the curve when it comes to transitioning into new fuel technologies. Many of these suppliers are already preparing for alternative fuels, and by engaging them early, we can set up test runs and make sure our infrastructure and relationships are in place for when those volumes grow.

While alternative fuels are still relatively small in terms of the overall tonnage, we’re closely monitoring the regulatory landscape and preparing accordingly. However, my immediate focus will be on optimising the 800,000 tonnes we currently manage every year, ensuring we have the best supply strategy in place to serve both our pool members and future expansion.

In your view, how can TI gain a competitive advantage in the increasingly complex fuel landscape? What key areas should the bunker desk focus on to achieve this?

Our main competitive advantage lies in our significant buying power. In the bunkering industry, this is crucial. We have strong, well-established relationships, large credit lines, and a reputation for reliability and trust. Our partners know they can trust us to pay on time and handle substantial volumes. This trust and financial strength sets us apart, especially in a market where stability and competence are vital.

To build on this, the bunker desk will focus on leveraging our scale to negotiate better pricing, while ensuring that we maintain strong, long-term partnerships with suppliers. Our aim is to not only offer cost savings but also reliability and strategic insight, which are highly valued in the industry.

As the fuel landscape becomes more complex with the rise of alternative fuels, it will be essential for us to stay ahead of the curve by building relationships with suppliers who are already preparing for this shift. This proactive approach will position us well to offer our pool members a seamless transition into future fuel technologies.

By combining our buying power with a focus on reliability, trust, and forward-looking strategies, TI can solidify its position as a leader in the bunkering sector, both now and in the future.

As TI aims to support pool members through the decarbonisation challenge, what specific strategies or innovations do you think will be most effective in managing this transition?

Managing the decarbonisation transition will require a multifaceted approach, as it is an industry-wide issue.

Firstly, our significant fuel short in the traditional fuels arena, will transfer into the new alternative fuels markets. Our professional reputation will translate well into this new developing market. Whilst our alternative fuel volume requirements will be relatively small initially, we need to educate ourselves in these new markets now, and have already started detailed discussions with leading industry players. We aim to provide guidance and resources to help pool members navigate regulations related to emissions, ensuring full compliance with international standards.

Secondly, as the fuel landscape shifts, we need to build strategic partnerships with the suppliers who are leading the way in alternative fuel technologies. Some of our vessels have already made successful test runs with Biofuels and we are up to date with all the new regulations that will be implemented over the coming months. This proactive approach will help ensure that TI maintains a competitive advantage, ready to offer our members access to emerging fuels such as biofuels, LNG, and other low-emission alternatives as they become more widely available. Collaborating on test runs and pilot projects with these suppliers will also provide valuable insights into fuel performance and supply chain logistics.

Finally, transparency and education will be essential in supporting our pool members through this transition. By sharing knowledge on regulatory changes, fuel performance, and supply chain innovations, we can ensure that our members are well-prepared to meet both their operational needs and decarbonisation targets.

By combining our financial strength, strategic partnerships, and a forward-thinking approach, TI is well-positioned to lead the way in helping our pool members navigate the decarbonisation challenge effectively.

How do you see the future of fuel procurement evolving with the introduction of new ship technologies and stricter environmental regulations?

The future of fuel procurement is undoubtedly heading towards increased automation and digitalisation, though the shipping industry tends to adopt these changes at a slower pace, compared to other industries. There’s growing interest in online platforms that simplify fuel purchasing processes, but we’re still in the early stages of seeing a seamless, fully integrated system emerge.

At Tankers International, I’ve already noticed a significant shift towards automation, particularly in data management. While platforms for fuel procurement and blockchain-based fuel tracking are starting to appear, like the recent announcement of electronic BDNs in Singapore,  the reality is that bunkering, especially with biofuels, remains a complex process. There’s a lot of blending involved, which introduces potential issues, so a human element will still be necessary for the foreseeable future.

As stricter environmental regulations and alternative fuels come into play, we’ll see more platforms emerging that help manage everything from fuel specs to historical performance data. However, we haven’t yet seen one perfect solution that covers all these aspects seamlessly. Until then, human expertise will remain critical in navigating these complexities. I believe that as these technologies grow and mature, there will be opportunities to integrate automation without losing the important personal relationships and trust that have always been key in the bunkering business.

Ultimately, the future will be a blend of digital tools and traditional human oversight, ensuring that both efficiency and reliability are maintained as we adapt to new regulations and fuel technologies.

What attracted you to Tankers International?

I’m a chartered accountant, and I qualified working in audit for Moore Stephens, with Tankers International being my first audit. Auditing Tankers International every quarter for nearly four years gave me a great sense of the company, and I was genuinely impressed with the entire team, from the senior leadership to operations.

After four years, it became clear that it stood out among the many companies I audited. I was particularly impressed with its IT, which, due to being both bespoke and well supported ensured data could be analysed in a variety of ways and reporting streamlined. This, combined with the tangibility of the VLCC market, its global presence and the pooling model all contributed to it being an interesting business to work for.

After one of my last audits, a member of the Tankers International team invited me for a coffee, and I was offered a role at the company. It wasn’t just a like-for-like role; the fleet was expanding at the time and they wanted me as a person and were prepared to build a role for me. I knew from my experiences interacting with the team during the audit that they treated their employees well and valued relationships.

How does your role support Tankers International?

The role is a real mix that keeps me on my toes. It involves financial reporting at month-end, annual reporting, and treasury management.

Working hand-in-hand with Pool Partners is a key element of my role. We use a mix of accounting software and bespoke reporting tools to ensure timely responses to their requests. In addition, a number of our Pool partners are listed companies which requires more stringent reporting and increased internal compliance which is where my background in audit allows me to add real value.

My role directly supports our Pool Partners’ ability to successfully navigate the decarbonisation of shipping. In 2020, for example, the IMO sulphur cap came into force, directly impacting the Pool from a financial reporting perspective. Due to new fuels, technologies and diverging partner strategies for navigating these regulations we had to adapt the way we pooled vessels to accommodate scrubber fitted vessels. We make absolutely sure that the ramifications of any operational changes are looked after from a financial reporting perspective.

What is coming ahead for the pool?

How our Pool partners choose to reduce their carbon footprint and adapt to global regulations ensures that there are always new and interesting challenges for the Pool. As a chartered accountant, I add most value to my role when interpreting how these may impact our business and how I can work collaboratively with our stakeholders to ensure we continue to produce meaningful and timely reports on the financial data they need.

Take EU ETS for example; we are required to buy EU Allowances (EUAs), which are a type of carbon allowance that allows companies covered by the EU ETS to emit a certain amount of CO2e, on behalf of Pool Partners.

With EU ETS and the EUAs, it’s essential that we take a joined-up approach, both within our organisation and in collaboration with Pool Partners. We need to cooperate closely to understand how partners want to manage their EUA exposure and their holding of EUAs. All of these must be backed up by robust reporting and processes that are transparent for both participants and auditors.

What have been your personal highlights during your time at Tankers International?

A stand-out moment for me during my time at Tankers International has to be adapting to auditing during the COVID-19 pandemic. Prior to the pandemic, we worked in the office five days a week, and the filing system was paper-based. This meant documents were printed out, stamped up for approval, and filed accordingly.

The pandemic then hit, and we had to adapt our processes almost overnight to ensure that all documentation was filed digitally. It was a testament to Tankers International’s culture that there was immediate buy-in to make this happen quickly, plus the talent to make it a reality.

When it came to our first audit with these new processes, the audit went smoothly, with all documents found and shared on time, and no challenges from the auditors. These processes continue to this day, and have been robust throughout every audit, and have allowed us to adapt to a more flexible working environment.

Owen Symmonds, Group Financial Controller

What attracted you to Tankers International?

I’ve always been fascinated by data and turning it into something commercially useful. This interest led me to pursue a master’s degree in business analytics at the University of Southampton. Here, I got to grips with the theory behind how data can make a meaningful impact, in addition to practical data visualisation tools such as Power BI.

Straight from university, I landed a role at AirAsia as an analyst. It was there that I started translating my knowledge of and passion for data into insights that could inform business-critical decision-making. I look back and see many similarities between aviation and shipping, for example understanding performance and trends on vessel and airline routes and creating dashboards that can tell the right story.

It was an initial meeting with Mette Frederiksen, Head of Research & Insight that sold the opportunity to me. I immediately aligned with Tankers International’s mission and values and was excited by not only the volume of valuable data but also the company’s approach to translating and sharing it with Pool Partners for their commercial advantage.

What have been your personal highlights during your time at Tankers International?

I wanted to find a role that allows me to make a tangible, meaningful impact. At Tankers International, I felt I had this opportunity right from the start. For instance, I’ve been able to translate data into insights that have made a genuine economic difference to the Pool’s performance. As part of TI’s in-house data team, we are building dashboards from scratch and on demand. It’s not just a ‘nice to have’ for TI; the qualified data is used across the organisation, from the chartering desk to the operational team, to assist sound decision-making.

How does your role support Tankers International?

Data is at the very heart of Tankers International. But, raw data alone does not provide meaningful insights. As a data analyst, my role is to act as the bridge between data and insights.

On a typical day, requests come in from across the organisation. On the commercial side, these requests can be anything from comparing and contrasting the performance of different vessels or routes, to understanding how trade patterns change over time. One example is a Time Charter Equivalent (TCE) tracker dashboard that we’ve developed, which helps the team monitor the TCE throughout the voyage and understand the performance of a vessel.

We also get requests from the finance department. Currently, we’re working on a tool that will enable the team to review the Pool’s financial performance from different dimensions. Using digital tools, we can pull together information from several siloed platforms into one dashboard to create a single view from which decision-makers can view all relevant information.

What can we expect to see from Tankers International in 2024 and beyond regarding the use of data and digital tools?

It’s a case of Tankers International continuing to walk the walk when it comes to the use of data and digital tools. Being wholly focused on the VLCC segment and collecting 40+ data points for every VLCC fixture in the market puts us in a unique position to collate and share genuinely transformative insights. Much of this is to the benefit of our Pool Partners through more efficient trading of our own fleet, but it also allows us to continue the development of our VLCC fixture app to add more transparency to the VLCC market as a whole. This follows recent updates to the app, such as the introduction of Baltic Exchange data and Carbon Intensity Index (CII) data.

How does Tankers International differ in its approach to data?

Data and technology alone can’t deliver maximum institutional value. It requires the human touch, which is why TI has invested heavily in a dedicated research and insights team. As a company, we have also invested in internal solutions, including digital technology, that bring together data streams from various platforms to present an integrated data visualisation tool for decision-makers across the organisation. It’s the human knowledge and experience combined with the software, tools and technology that sets Tankers International apart when it comes to data intelligence.

As the first half of 2024 draws to a close, the VLCC market presents a picture of moderate improvement without the dramatic boom witnessed in other tanker segments. While freight rates have exhibited a steadier trajectory compared to the volatility of 2023, peak levels haven’t quite reached the heights anticipated. But at the same time, the lows haven’t dipped as drastically either. That being said, all the right factors are in place, and the VLCC segment taking part in the super cycle is a question of when, not if.

Fundamentals

The underlying fundamentals supporting the VLCC market remain largely unchanged since the beginning of the year. The key driver continues to be a lack of fleet renewal, with minimal new deliveries offset by a significant number of vessels exceeding their traditional 20-year lifespan. Scrapping activity and other forms of vessel retirement have remained subdued due to a period of relatively strong returns and optimistic market outlooks. Additionally, the growth of the “dark fleet” persists, providing an alternative outlet for these older ships. Comparing an orderbook-to-fleet ratio of just 7% to an older fleet representing 21% of the trading fleet, the fleet profile is supportive of a tightening tonnage balance.

The recent effective closure of the Suez Canal and the wider Red Sea area, which significantly impacted product tanker markets, has had a relatively muted effect on the VLCC sector. The inherent nature of the VLCC market, where historically only a limited number of vessels utilise the Suez Canal, has meant limited disruption to the segment and a mere 4 VLCCs equivalent increase in demand due to the rerouting. This is where the product tanker segment has found surging support over the past 6 months.

The ongoing Russia-Ukraine conflict continues to play a crucial role in shaping all tanker markets, including VLCCs. Russian oil continues to be diverted to buyers outside Europe, prompting Europe to source supplies from alternative sources like the US, West Africa, and the Middle East. This dynamic translates into more inter-Atlantic trading, where VLCCs become competitive when freight economics permit. This does not necessarily mean longer tonne miles, but these routes provide access to more creative trading opportunities and allow owners to triangulate vessels and optimise their fleets.

OPEC+

The Middle East to Far East route remains the backbone of the VLCC market. While OPEC+ production cuts have restrained oil flow from the Middle East region, positive signals are on the horizon. Recent announcements from OPEC+ on their production management strategies pointed to a gradual phase-in of previously curbed production volumes starting in October. The group plans to add 2.5 million barrels per day over the following 12 months. This includes bringing back 2.2 million barrels of voluntary cuts and allowing the UAE to raise production by 0.3 million barrels per day. Additionally, the market anticipates a rise in incremental supply from Atlantic basin producers such as the US, Canada, Brazil, and Guyana. As incremental demand is expected to remain concentrated in the East, this scenario translates into long tonne mile demand for VLCCs.

The positive news continues, with forecasting agencies all projecting a rise in oil demand over the year and, in particular, during the second half of 2024 compared to the first. Much of this hinges on China fulfilling the robust demand projections predicted for the nation. China’s leadership has set itself an ambitious economic growth target and is taking proactive measures to achieve this. Historically, this proactive approach is closely linked to growth in oil demand and, importantly for the VLCC segment, a rise in oil imports. Furthermore, the optimistic demand outlook from the forecasting agencies point to growth in the Call-on-OPEC, which aligns with OPEC+ plans for a phased production increase.

The VLCC market has shown resilience in the first half of 2024. While not experiencing the dramatic boom of other tanker segments, it has exhibited steady growth with positive indicators for the remainder of the year. Stronger demand growth, the return of some OPEC+ production and continued geopolitical influences are all factors to monitor as the market navigates the second half of the year. We remain optimistic that the VLCC segment will find its moment to enter the stage and take an active part in this year’s super cycle.