FuelTrust’s most recent research uses AI-based technology to investigate fraudulent practices and inadequate supply chain management in the bunker fuel industry.
Houston, Texas – July 19, 2023 – FuelTrust, the technology company dedicated to creating a trusted and sustainable fuel ecosystem for the maritime industry, has released a new report examining bunker discrepancies in the maritime industry, which includes examples of unethical practices and fraudulent activities related to bunkering.
FuelTrust’s analysis found that between 2021 and 2022, more than 39% of global bunkers exhibited a fuel content delta of 2% or more compared to the amounts stated in their delivery paperwork. The primary issue identified was the introduction of water into the fuels during the journey from onshore storage tanks to the ship’s bunker tank. This problem typically involved an increase from 0.1% to above 0.25% water content, which, although below the regulated threshold, still resulted in average losses of $14,910 per affected delivery.
The maritime fuel market has a long history of not being transparent. Bunker fuels account for more than 50% of a vessel’s operational expenses, meaning fraudulent practices and inadequate supply chain management can significantly affect the profitability of vessel owners and charterers, and fuel suppliers. Just this month, eleven Ships lost propulsion, and over 100 ships were affected in a single incident of fuel contamination in Houston.
Even fuel considered “on-spec” (meeting specified quality standards) experiences volume or content issues, leading to financial losses or engine problems. In the past year, over 600 vessels were disabled through fuel problems, despite the fuel being ‘on-spec’, resulting in estimated global supply chain losses exceeding $5 billion. Both fuel suppliers and shipowners incurred financial losses, which are difficult to detect and make claims against.
FuelTrust’s AI-based approach to creating a trusted fuel ecosystem through transparency and traceability addresses the challenges in the fuel supply chain, particularly in the maritime sector. By providing visibility into the final outcomes of fuel products, fuel suppliers can better understand and validate their offerings, while fuel buyers can combat fraud, minimize losses, and mitigate environmental risks.
Jonathan Arneault, CEO and Co-Founder of FuelTrust commented: “This new research across the global bunkering market emphasizes the need for better transparency. By providing visibility, traceability, and security throughout the fuel supply chain, FuelTrust is improving operational efficiency, helping reduce environmental impact, and fostering trust among all stakeholders.”
“As the latest contamination case demonstrates, it’s essential that ship owners, bunker suppliers and charterers can gain better insight into their fuel supply chains. Better information on the fuel we use is also a foundational block of any serious GHG reduction strategy.”
To learn more, download the whitepaper “The cost of fraud in the maritime fuel market”.
FuelTrust is a green-tech start-up SaaS company building solutions to create a trusted and sustainable fuel ecosystem. Based in Houston, Texas, they have teams working across North America and Europe.
FuelTrust leverages its technology platform to create insights that reduce risk and improve ESG outcomes by authenticating relationships across the fuel lifecycle, digitally verifying data from shared sources, validating decarbonization and compliance, and identifying potential fraud and risk. With deep insight into when, where and from whom quality fuel is supplied, FuelTrust solution allows companies to alleviate the financial impact of bad fuel, mitigate regulatory risk, and empower sustainable shipping.