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Short delivery is the industry term for the lifting of a lesser amount of bunkers than what has been agreed, or what the buyer - in most cases, ship operators and owners – will pay for.
A 'gain' occurs when a supplier shortchanges bunker fuel to a receiving vessel, usually with the knowledge of the bunker surveyor who gets a backhander for such malpractices. Cheating suppliers can then use the extra fuel siphoned from a few under-deliveries for resale in the 'black market', mostly at lower than market-rate levels.
Even in a relatively well-regulated bunkering port such as Singapore, which at present sees the most amount of marine fuels being sold every year – total sales up till November this year already crossed the 33 million metric tonnes (mt) mark – it is not unheard for suppliers to be caught red-handed and punished.
In the most recent conviction, Singapore courts found that the director of local supplier Faber Marine Pte Ltd bribed a chief engineer and a surveyor to short change a bunker buyer by 300 mt of intermediate fuel oil (IFO).
As a result, director Lee Tong Kit's company Faber Marine had its bunker supplier's licence revoked by the Maritime and Port Authority of Singapore (MPA) effective December 9, 2009.
Short delivery cases pending, as reported by Bunkerworld, include one involving Shanker Balasubramanian, an ex-employee of oil major Chevron, who is alleged to have conspired with a freelance marine cargo surveyor to siphon off bunker fuel and bribe a third person.
That case is currently under deferment and a pre-trial conference on December 15 was adjourned to January 19, a spokeswoman from the court had said.
Though reported cases or criminal convictions with regards to the short delivery of bunkers seem to emanate mostly from the Singapore market, short delivery also takes place in other bunker markets around the world, according to an industry player.
“It is precisely because Singapore authorities are relatively more stringent with industry practices than other port authorities, that cases of short delivery are often heard from the Singapore market,” a leading supplier in an East Asian port told Bunkerworld in November during Bunker Asia 2009.
“On one hand it makes the Singapore market, with its massive volumes, seem scandalous, but on the other hand, I think many ship operators are most at ease bunkering up in Singapore, knowing that the authorities are keeping a close eye on matters,” the supplier added.
Given the volume of short delivery cases uncovered to-date, and your own knowledge of industry practices, would you say that the practice of short delivery is common?
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If this constitutes only 4% as reported in this survey, the amount of official complaints globally are over 50,000.
The average shortfall is estimated at 1.5 - 2.5% of the delivered sum.
Based on Bunker Fuel Oil sales in Singapore for 2009 as estimated at 36 million MT, the complaints on shortfalls amount to between a staggering 540,000 - 900,000 MT.