Contacts in bunker trading
1. The primary role of a bunker supplier is to:
a) Arrange maritime employment for vessel crews.
b) Physically provide the fuel (bunkers) to vessels at a port.
c) Act as the final consumer of the marine fuel.
d) Handle all the legal contracts for the trading company.
b) Physically provide the fuel (bunkers) to vessels at a port.
A vessel receives a batch of fuel that is suspected to be off-spec. The most critical immediate action for the ship's crew is to:
a) Immediately blend the fuel with existing residues in the tank to dilute the problem.
b) Stop using the fuel, isolate the tank, and formally notify the supplier and bunker trader to preserve the claim.
c) Increase the engine temperature to try to burn off the contaminants.
d) Wait until the next port to report the issue, as the problem might resolve itself.
b) Stop using the fuel, isolate the tank, and formally notify the supplier...
A trader receives a firm nomination from a customer for a stem in a port with known strong currents. The most important operational action is to:
a) Secure the cheapest barge available to maximize profit.
b) Confirm that the nominated barge has sufficient power and an experienced crew to handle the conditions, thus minimizing the risk of a delay.
c) Assume the port authority will handle any issues.
d) Advise the customer to move their vessel to a calmer anchorage.
b) Confirm that the nominated barge has sufficient power and an experienced crew...
A potential new customer requests you place an order for a large delivery next month. To secure the business, they demand a firm price guarantee today. The most significant risk in agreeing to this is:
a) The administrative burden of having to process the order.
b) Your inability to reliably meet demand on that date.
c) You are exposed to potential adverse price movements in the underlying market, which could erase your margin or cause a loss if you cannot hedge the position.
d) The customer might change their mind.
c) You are exposed to potential adverse price movements in the underlying market...
A key responsibility of the operations staff in a bunker trading company is to:
a) Set the global price for crude oil.
b) Liaise between the supplier and the vessel (the customer) to ensure a smooth delivery.
c) Recruit new hires directly without any external help.
d) Manufacture the marine fuel in a refinery.
b) Liaise between the supplier and the vessel (the customer) to ensure a smooth delivery.
When a physical supplier has a reputation for being reliable, it specifically means they consistently:
a) Provide the cheapest fuel available on any given day.
b) Deliver fuel that meets the specified ISO 8217 standards, avoiding off-spec situations.
c) Deliver the correct quantity and quality of fuel at the agreed time and location, with professional service.
d) Use their own dedicated barges for all deliveries.
c) Deliver the correct quantity and quality of fuel at the agreed time and location, with professional service.
Explanation: "Reliable" in bunkering refers to the entire service delivery chain—on-time, on-spec, and correct quantity. It's a broader term than just quality.
The " laytime " clause in a bunker contract is crucial because it:
a) Defines the penalties payable by the customer if the barge is delayed.
b) Specifies the exact quantity of fuel to be delivered.
c) Governs the allowed time for the pumping operation and protects both parties from the costs of excessive delay.
d) Is a standard clause that is never enforced.
c) Governs the allowed time for the pumping operation and protects both parties from the costs of excessive delay.
A trader's strategy to quote lower prices than all competitors for a specific port is most sustainable when:
a) It is used as a permanent strategy to dominate the market.
b) The trader has a confirmed delivery from a supplier at a cost that makes the low price profitable, ensuring they can meet demand without loss.
c) It is done to win a strategic customer, with no concern for immediate profit.
d) The operations team is not informed, to simplify the process the order.
b) The trader has a confirmed delivery from a supplier at a cost that makes the low price profitable...
A dispute over fuel quality after delivery would most likely require communication between the trader's staff, the ________, and the ________.
a) employment agencies, port authorities
b) supplier, customers
c) customers, employment agencies
d) marketing team, supplier
b) supplier, customers
A lab result confirms a fuel is borderline off-spec on a single, minor parameter. The engine manufacturer states it's unlikely to cause damage. The supplier, who is otherwise reliable, offers a small discount to settle the matter. The most commercially astute action for the trader is to:
a) Immediately file a major claim to punish the supplier for the breach.
b) Refuse the discount and demand the fuel be replaced, causing operational disruption.
c) Negotiate a fair commercial settlement with the discount, document the event, and continue the relationship, as the cost of burning the fuel is less than the cost and reputational damage of a major dispute.
d) Ignore the lab result entirely to maintain the relationship with the supplier.
c) Negotiate a fair commercial settlement with the discount, document the event, and continue the relationship...
A customer submits a nomination with an exceptionally tight delivery window. The operations staff knows that the only available barge has a history of being slow. The most professional response is to:
a) Accept the nomination unconditionally to secure the business and worry about problems later.
b) Reject the nomination outright as being too risky.
c) Communicate the potential risk of delay to the customer before confirming the stem, and seek their approval to proceed or adjust the timing.
d) Book the barge and blame them exclusively if a delay occurs.
c) Communicate the potential risk of delay to the customer before confirming the stem...
When a trader promises a guarantee of on-time delivery to win a customer, they are:
a) Making a meaningless sales pitch that has no legal standing.
b) Accepting significant financial and reputational risk, as failure could lead to a claim for the customer's losses due to the delay.
c) Simply confirming that they will process the order in their system.
d) Promising that the supplier will quote lower prices in the future.
b) Accepting significant financial and reputational risk, as failure could lead to a claim for the customer's losses due to the delay.
A bunker trader secures a very competitive price from a new, unknown supplier. The operations staff expresses concerns about the supplier's logistical capabilities. The trader should prioritize:
a) Ignoring the staff's concerns to secure the higher profit margin and attract new customers.
b) Immediately offering the cheap price to all their top customers to gain market share.
c) Heeding the staff's concerns and conducting due diligence, as a failed delivery could damage relationships with key customers and cost more in the long run.
d) Contacting employment agencies to recruit new operations staff who are less risk-averse.
c) Heeding the staff's concerns and conducting due diligence...
Why it's tricky: This tests the balance between short-term profit and long-term reputation. The operations staff are on the front line and their practical concerns about logistics are often more valuable than a good price from a trader. A failed delivery can lead to massive claims from the customer.
A customer demands the lowest possible price and explicitly says they are "not concerned about premium quality." The most significant long-term risk for the trader in fulfilling this request is:
a) Lower profit margin on the single transaction.
b) The customer will still blame the trader, not their own cost-cutting decision, if the fuel causes any operational issues, damaging the trader's reputation for reliable service.
c) The trader will have to use less reliable suppliers to source the fuel.
d) The trader's internal staff will be disappointed.
b) The customer will still blame the trader, not their own cost-cutting decision, if the fuel causes any operational issues...
A delay in the commencement of pumping occurs because the receiving vessel's tanks were not ready. The barge will invoke the clause in the contract that:
a) Covers the quality of the fuel.
b) States the supplier is not liable for the delay and demurrage costs may apply to the customer.
c) Forces an immediate price renegotiation.
d) Requires the use of a specific independent surveyor.
b) States the supplier is not liable for the delay and demurrage costs may apply to the customer.
A customer asks you to process the order immediately based on a verbal phone conversation, before receiving the written nomination. The most professional response is to:
a) Immediately initiate the delivery to show excellent service.
b) Refuse until your staff has run a full credit check.
c) Send a written recap of the order details and await their written confirmation before formally booking the stem, to avoid misunderstandings and have a clear guarantee of the terms.
d) Ask them to quote lower prices from their other suppliers first.
c) Send a written recap of the order details and await their written confirmation...
A physical supplier suddenly informs you they cannot fulfill a confirmed nomination for a major customer. The customer's vessel is already enroute. The correct order of priority for your staff is to:
a) First, find a scapegoat internally; second, renegotiate the price with the customer; third, look for an alternative supplier.
b) First, contact employment agencies to complain about the supplier's staff; second, send an apology email to the customer.
c) First, urgently find an alternative supplier to secure the stem; second, transparently communicate the issue and solution to the customer; third, manage the fallout with the original supplier.
d) First, invoice the customer for the non-delivered fuel to cover costs; second, take no further action.
c) First, urgently find an alternative supplier...
Why it's tricky: This tests crisis management under pressure. The immediate operational fix (finding fuel) is the top priority, but it must be paired with immediate and transparent communication to the customer. Managing the faulty supplier comes after the customer's needs are secured.
A trader is known for always being able to quote lower prices than competitors. The most likely hidden risk for a customer is that the trader is:
a) More efficient than their competitors.
b) Sourcing from suppliers who may compromise on reliable quality to offer cheaper fuel.
c) Using a more advanced pricing software.
d) Intentionally taking a loss to be helpful.
b) Consistently lower prices in a competitive, transparent market often indicate higher risk in the supply chain, such as lower-quality blending components or less rigorous testing, which can lead to off-spec fuel and engine damage.
During a stem, the barge reports a mechanical failure, causing a significant delay. The vessel's captain is demanding compensation for lost time. The operations staff's first priority should be to:
a) Immediately admit full liability to the customer.
b) Locate a replacement barge to complete the delivery and minimize the total delay, while simultaneously notifying all parties.
c) Instruct the barge to hide the real reason for the delay.
d) Go offline until the problem is resolved to avoid difficult questions.
(b) Locate a replacement barge to complete the delivery and minimize the total delay, while simultaneously notifying all parties.
During a period of extreme market volatility, a customer places an order based on your firm quote. An hour later, but before you've processed it, your supplier withdraws all offers, causing your cost to rise by 20%. You have not yet sent a confirmation to the customer. You should:
a) Process the order at the original quoted price and accept the loss to honor your word.
b) Immediately contact the customer, explain the situation transparently, and either re-quote at the new price or, if possible, share the loss to find a middle ground.
c) Wait to see if the market comes back down before saying anything.
d) Send the confirmation at the original price and then blame the supplier for any subsequent delay or issue.
b) Immediately contact the customer, explain the situation transparently...