Chanaka Roshan PerumbuliB.Sc.(Hons.) in Transport & Logistics

Management, University of Moratuwa, CIMA (UK),MILT (SL)

Competitiveness of Sri Lankan Bunker market

Research Questions

Understanding the level of competitiveness of Sri Lankan bunker market in the regional bunker industry

1. Identifying the major competing ports in the regional bunker industry.

2. Comparison of Colombo bunker prices and sales volumes with other regional bunker ports.

Research Objectives

Literature Review

Panama bunker market study (Fearnley Consultants, 2003)

The effect of high fuel costs on liner service configuration in container shipping. (Notteboom, T.E., Vernimmen, B. (2009)).

Bunkering competition and competitiveness at the ports of the Gibraltar Strait (Acosta, M. et al. (2011))

Options and Approaches for Two Seaport Authorities on the Joint Reduction of Bunker Oil Related Emissions (Stikkelman, R.M. et al. 2012)

Methodology

Secondary data collection

1. Journals & Magazines (Fairplay)

2. Internet based findings

3. Face to face interviews

Bunker Price Comparison (MGO - 1/9/2011 to 18/10/2012)

Bunker Price Comparison (MGO - 1/9/2011 to 18/10/2012)

Bunker Price Comparison (180Cst - 1/9/2011 to 18/10/2012)

Bunker Price Comparison (180Cst - 1/9/2011 to 18/10/2012)

Bunker Price Comparison (380Cst - 1/9/2011 to 18/10/2012)

Bunker Price Comparison (380Cst - 1/9/2011 to 18/10/2012)

Comparison between Singapore and Colombo vessel traffic

Month

Total number of vessels

called to port of Singapore

Total number of vessels called to

Singapore for Bunkering

Singapore number of vessels for

bunkering vs. total traffic

Total number of vessels

called to Sri Lankan

Sri Lanka / Singapore

total number of vessels

2011- January 10,937 3,228 29.51% 355 3.25%2011 - February 9,488 2,798 29.49% 322 3.39%2011 - March 10,994 3,216 29.25% 376 3.42%2011 - April 10,401 3,085 29.66% 378 3.63%2011 - May 10,680 3,237 30.31% 361 3.38%2011 - June 10,468 3,059 29.22% 354 3.38%2011 - July 11,148 3,125 28.03% 359 3.22%2011 - August 10,827 3,230 29.83% 387 3.57%2011 - September 10,432 3,086 29.58% 357 3.42%2011 - October 11,069 3,315 29.95% 366 3.31%2011 - November 10,519 3,118 29.64% 337 3.20%2011 - December 11,035 3,256 29.51% 369 3.34%2012 - January 10,743 3,315 30.86% 351 3.27%2012 - February 10,120 2,980 29.45% 329 3.25%2012 - March 11,050 3,199 28.95% 367 3.32%2012 - April 10,669 3,177 29.78% 326 3.06%2012 - May 11,218 3,353 29.89% 342 3.05%2012 - June 10,790 3,122 28.93% 353 3.27%2012 - July 11,099 3,151 28.39% 362 3.26%

Bunker Sales Volume Comparison

Product Category2010 2011 2012 (January-June)

Sri Lanka Singapore Sri Lanka Singapore Sri Lanka Singapore

MGO 21.3% 4.5% 23.5% 4.2% 19.0% 4.0%

MFO 180Cst 19.4% 6.4% 15.9% 4.4% 13.2% 4.0%

MFO 380Cst 59.4% 89.0% 60.6% 91.4% 67.9% 92.0%

Comparison of MGO sales volumes and vessel traffic

Year Sri Lanka Singapore % - As a Percentage

2010

MGO ('000 tonnes ) 67.511 1,596.60 4.23%Vessel traffic (Total) 4067 127,299 3.19%Demand per vessel (tonnes) 16.60 12.54 132.38%Projected Volumes for Sri Lanka ('000 tonnes ) 51.009Actual Vs Projected Volume 67.511 51.009 32.35%

2011

MGO ('000 tonnes ) 86.376 1,569.60 5.50%Vessel traffic (Total) 4323 127,998 3.38%Demand per vessel (tonnes) 19.98 12.26 162.97%Projected volumes for Sri Lanka ('000 tonnes ) 53.012Actual Vs Projected Volume 86.376 53.012 62.94%

2012 (January-June)

MGO ('000 tonnes ) 35.267 750.10 4.70%Vessel traffic (Total) 2068 64590 3.20%Demand per vessel (tonnes) 17.05 11.61 146.86%Projected volumes for Sri Lanka ('000 tonnes ) 24.016Actual Vs Projected Volume 35.267 24.016 46.84%

Comparison of total bunker sales volumes and vessel traffic

  Year

 Sri Lanka

 Singapore

 % - As a

Percentage

2010

Total ('000 tonnes ) 317.349 35,320.00 0.90%Vessel traffic (Total) 4067 127,299 3.19%Demand per vessel (tonnes) 78.03 277.46 28.12%Projected volumes for Sri Lanka ('000 tonnes ) 1128.418Actual Vs Projected Volume 317.349 1128.418 -71.88%

2011

Total ('000 tonnes ) 367.711 37,332.70 0.98%Vessel traffic (Total) 4323 127,998 3.38%Demand per vessel (tonnes) 85.06 291.67 29.16%Projected volumes for Sri Lanka ('000 tonnes ) 1260.873Actual Vs Projected Volume 367.711 1,260.873 -70.84%

2012 (January-

June)

Total ('000 tonnes ) 186.036 18,852.20 0.99%Vessel traffic (Total) 2068 64590 3.20%Demand per vessel (tonnes) 89.96 291.87 30.82%Projected volumes for Sri Lanka ('000 tonnes ) 603.597Actual Vs Projected Volume 186.036 603.60 -69.18%

ConclusionThriving as a leading bunker port

Importance reducing bunker pricesImportance of port tariffLack of global presence companies(E.g. BP, Chevron, etc.) in Colombo

Thriving as a leading bunker supplier

Quality of bunker fuelAbility of providing longer credit facilitiesAccuracy of quantity deliveredMaintaining international standardsPromptness in attending to customer claims

Suggestions for future research

Identifying cheap sources of buying and producing bunker

Reasons for competitive pricing in regional ports

Perception of international bunker brokers

Perception of port agents and bunker suppliers based in other countries. Such as, Singapore, Fujairah and so on

Upstream of the bunker supply chain

Thank You

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