Marine Fuel Bunker Broker - Atlantic and Gulf Coasts

Plaza Marine is a proven supplier of marine fuel and lubricants serving the east and Gulf Coasts of the United States since 1989.

Twenty-four hours a day, seven days a week our customers receive top grade marine gas oil, marine diesel oil, international marine fuel, and lubricants directly at the port or delivered by barge, tank truck, or metered dockside facility.

Plaza Marine maintains supply points at all major points of call along the Eastern and Gulf coasts of the United States.

Competition amongst Marine Bunkers suppliers will remain intense. The threshold of competence will be progressively raised by the Marine Bunkers buyers and the ports. To remain above this threshold and maintain a viable long term presence in the business, innovation and work on customer relationships will be required.

The picture I have painted is of a demanding future for suppliers. Not all of them will meet the challenge. However those that do will have a chance to participate in a revitalized, quality business. Shell is ready for this challenge !

We have all been intimately involved and invested in this business for the last twenty years. While we will never reach the "critical mass" (should that ever be a goal, which I personally doubt) of TransTec we have however managed to retain a loyal customer base. This would not have possible if we were providing a "mediocre, lazy service" and I think that to imply that this is the ability of the majority of our colleagues is insulting and incorrect. The market will decide if its brokers are lazy - we do not need to be judged by our competitors.

Similarly we question the fixation with size of operation or volume of sales as a measure of efficiency. A brief look through the BunkerNews book of bunker suppliers and traders worldwide will reveal that probably eighty percent of them are staffed by 2 or 3 or 4 people. This level of intimacy seems to be something that many clients value, as they know every time they call, the same person will attend to them. For those of us that view customer relationships as a long-term matter as opposed to a means to an end of adding value to the stock price, which is the goal of officers of a public company. This ability to learn more about one's client than his potential as a producer of margin is of prime importance. There is no doubt that we are all in this business to make an honest living but I would suggest that the profit motive for the private companies is far more balanced with the genuine desire to provide a level of service than for a public company with its stock price under continual scrutiny.

The argument put forward by TransTec for owners to use a company which is "global in scope" seems to be in conflict with their concept of 'developing a local presence with local people." This flies in the face of the global concept but is of course exactly how this business is worked.

Brokers develop relationships with local suppliers with local knowledge and contacts in order to best facilitate deliveries - which is, at the end of the day, what we are all here to do. These are the same local suppliers and traders who are maligned as being "small regional companies." Similarly, what is the difference between TransTec developing this presence as opposed to the "private trader" receiving a "steady diet of business from brokers," for of twenty first century gobbledygook - contrary to what TransTec believes we see lots of traditional ship owners with traditional problems and traditional needs. This business certainly has become more competitive. The transparency of information flow has made it easier for owners to be informed and educated about markets however it has not altered the fact that, for the small owner who does not have a dedicated in-house bunker person, the prime need he has is to be able to make as few telephone calls as possible to someone he trusts to solve his immediate bunkering problem. That person may well be TransTec, or Bunkerfuels, both of whom are perfectly capable companies who have done a good job of what they do. The fact that they have global capabilities and global overhead does not however make them the best.

The fact that the calendar will read 2000 in four months time is interesting but irrelevant to this discussion and owners know it. Brokers will continue to deal with small-regionalised suppliers because they are the people that best know, at a grass roots level, what is happening now, in their market. Some traders will continue to be undercapitalized from time to time, especially in times of market price volatility where the book debt can double in one quarter just because of price movements. We agree that rationalizations will take place, with mergers and closures, just as in any industry.

In conclusion however we repeat our belief that the market will decide if it wants to deal with caring people or bottom-line motivated mega brokers. We are all endeavoring to survive in a very tough market and as such it behooves us all to respect the efforts and investments that all participants have in it

Marine fuel management

Traditional bunker brokerage and trading are businesses in decline. Specialised fuel-purchasing management, however, is an industry on the verge of significant global expansion. Small, regional brokerage companies and poorly capitalised private trading firms are finding a rapidly shrinking market for conventional services. On the other hand, value-added, global brokerage companies and highly capitalised traders with sophisticated understanding of financial engineering and vessel operations are finding intense demand from the shipping community for global fuel-

management services. The increasingly specialised nature of shipping, coupled with unprecedented levels of competition, has put enormous pressure on shipowners to cut costs and find creative solutions to old problems.

Purchasing fuel in a highly volatile and fragmented international supply market requires specialised expertise on a broad variety of issues, including spot pricing, contract structure, price-risk management, quality control, delivery procedure, safety compliance, vessel operations, terms and conditions of sale, and financial engineering. Faced with these risks and challenges, shipping companies are demanding a highly personalised service to design custom-tailored purchasing strategies for their fleets on a global scale. The supply community is demanding that intermediaries reduce their cost of sales and add significant value from a marketing and credit-finance perspective.

The partnerships being developed between World Fuel Services Corporation�s marine segment, comprising Trans-Tec Services and Bunkerfuels Corporation, and the shipping and supply communities are an example of the new paradigm for bunker brokerage and trading � the global marine-fuel-management company.

The shipping industry is currently enduring one of four great market slumps of this century. This has forced radical consolidation in the industry that was not being contemplated even three years ago. The Asian crisis and subsequent economic shock waves resonating throughout Latin America have precipitated an implosion of significant proportions. Shipping, never an industry for the faint of heart, has been more tumultuous than usual. The pressure to reduce expenses and be the low-cost provider of choice has given birth to the most unlikely partnerships and collaborations. Survival is the name of the game, and bunker costs feature prominently on the radar screen when large-dollar cost centres are scrutinised with do-or-die intensity. No one is immune to this process and the trade journals are filled with news of collapsing bond issues, contraction, ship sales, red ink, and reshuffling of top executives. In this climate, even long-standing

relationships and the most unimpeachable performance records are called into question.

The supply community is also experiencing a level of dislocation and corporate musical chairs unprecedented in this century. Low oil prices have sharply affected earnings for the oil companies and triggered a plethora of mergers and acquisitions, which promise to turn an already unsettled bunker industry on its head. The mergers of Exxon and Mobil, BP and Amoco and Arco, Hyundai and Hanwha, SK and Ssangyong, Petronas and Engen, and Mitsubishi and Nippon reflect the fevered state of corporate manoeuvring within the industry. Bunkering, hardly the driving force behind refining economics, is once again in a state of flux. Major oil companies are redefining, yet again, the nature of their commitment to the marine market, as independent and state-owned oil companies work to establish an enduring presence. All are fending for themselves in an extremely competitive market, where the search for supply and customer support is cut-throat.

Given the magnitude of change in the world of shipping and supply, it is no wonder that the very existence of traditional and conventional approaches to bunker brokerage and trading is threatened. The traditional broker�s bread and butter were, and always will be, account relationships. On the other hand, the private trader�s bread and butter have always been heavily dependent upon a steady diet of business from brokers in search of credit finance. This paradigm is changing, not because relationships are not important � in fact, they matter more now than ever � but because the demand for services has increased exponentially in the last five years.

When the pace of the business was slower and the conventional service of day-to-day pricing in a particular port or credit with a particular supplier was sufficient to meet the needs of the customer and the supplier, the old paradigm worked. Small boutique brokerage shops survived by delivering a highly

personalised service to a short list of direct

customers and accounts managed via correspondent brokers. Small traders survived by liberally granting favoured brokers the authority to put them into a deal at a fixed margin. However, the purchasing and supply communities have grown more discerning. The market risk they manage today is far greater, the scrutiny they endure far more intense and the competitive climate far more hostile than ever before. The demand for and expectation of services bear no resemblance to

days past. Bunker buyers are desperately re-engineering their entire companies to do far more with less.

Processing the tidal wave of information produced by the cyber-age is not unlike trying to breathe underwater. Buyers must contend with price volatility, variable fuel quality, new suppliers and supply locations, ever changing counter-party risk, sophisticated contract structures, fixed-price forward arrangements, a hostile regulatory climate, ISM Code imperatives, and management reporting. As most shipping companies are focused on their core competence � the movement of goods � they are seriously challenged to keep up with the market. More and more they are partnering with professional fuel-purchasing managers to mitigate their risks worldwide.

The supply and purchasing communities are increasingly impatient with the traditional fix-and-forget mentality of conventional brokerage. They are far more wary of small, private traders with undercapitalised balance sheets and lacking infrastructures. Buyers and sellers are no longer disposed to tolerate mediocre, lazy service from the brokerage and trading community. Suppliers have a demand for and expectation of true value-added services in the form of global marketing, financial viability, credit enhancement, technical support, creative structures for spot and contract purchasing, packaging and leveraging rateable demand, and generally meeting customer expectations. Suppliers are rationalising their customer lists, paring back their lists of acceptable brokers and traders, and concentrating their efforts on partnerships with professional service companies that can deliver value in a difficult market and reduce their sales costs. Companies that are well-financed and whose operations are global in scope enjoy a distinct competitive advantage.

The millennium is upon us. The fates of the shipping, oil and marine fuel brokerage and trading industries are inextricably linked. Until electromagnetic plants drive vessel propulsion, the bunker industry will be an integral part of the marine landscape. However, what was once a tradition-bound business, enjoying relative obscurity, has been irrevocably transformed. World Fuel Services� own marine segment comprises two companies, Trans-Tec Services and Bunkerfuels Corporation, which are at the forefront of this change in marine-fuel-management services. Both companies have developed exceptional brand equity, delivering a high level of personalised service to a broad and diverse portfolio of highly discerning customers. These customers not only have faith in the business relationships developed over years of service, but also enjoy reliability, performance and trust.

By developing a local presence with local people and local expertise in key strategic markets around the world, World Fuel Services is able to offer its customers creative and custom-tailored solutions to the challenge of bunker buying in a difficult market. As a result, one of the customer�s most important and difficult cost posts is professionally managed in partnership with all levels of the company�s operations, purchasing, finance and technical departments to achieve the best result. Such arrangements are being recognised by buyers as adding value to their relationship with the international purchasing community. Independent, major and state-owned oil companies have learned that a worldwide relationship with these companies is an efficient and cost-effective way to do business and reduce risk. It requires in-depth expertise in all shipping segments as well as marketing, vessel operations, technical support, contract structure and claims resolution.

The traditional role of the bunker broker and trader is no more relevant to today�s market than the traditional role of the shipping company or the supplier. All have had to change and respond to the market demands of today and the future. Shipping can no longer rely on the regional entrepreneur in a global market. Bunker supply can no longer be characterised as a global infrastructure controlled by a few major oil companies. The bunker industry can no longer rely on a highly fragmented population of small, undercapitalised and marginally trained brokers and traders to service the respective demands of the shipping and supply industries. Professional, specialised fuel management service with in-depth expertise is the way of the future for bunker brokers and traders.

Jacksonville, Florida
In the port of Jacksonville, Florida, Plaza maintains one central location. Dockside fueling or deliveries by truck or barge are available.