Why now is the time to enhance and streamline digital communication
155 days ago
As the world prepares to reopen the global economy from the shackles of COVID-19, businesses are faced with the reality of how to stay competitive. They must also consider how to respond with new methods of transacting, in the wake of a renewed drive to enhance and streamline communication.
The big question is how will the marine fuel and lubricants market, an industry already ripe for a digital transformation, respond?
The changing face of communication
Digital tools such as Zoom are changing the way we connect in business. Uber is transforming how we access and pay for our transportation needs. Social media is evolving how people and companies present themselves to their target customers.
The continued digital evolution has transformed virtual communications and industries have had to adapt in order to stay relevant and competitive. Many businesses that refused to adapt will have suffered and experienced a profitability deterioration, while risking being left behind digitally savvy competitors.
When you combine a global trend of digital optimization with a global pandemic, there is unprecedented disruption forcing multi-trillion-dollar economies to embrace enhanced virtual communication.
The world is about to see how it will unfold but it will surely accelerate digitalisation, forcing companies and industries to embrace changes. At a far faster pace than they were previously comfortable with.
Inherited risks of traditional practices
The marine industry has used the same virtual communication tools for years. A mix of emails, WhatsApp, ICE chat and phone calls. These standard forms of communication have been the hallmark of digital communication between buyers and suppliers for product availability, price negotiations and receptive dialogue. A complete reliance on them to close deals, transact and ultimately meet targets.
But does dependence on these standard communication practices create pain points, inefficiencies and inherited risks for maritime buyers and suppliers? Does using a host of non-integrated tools to communicate with counterparties heighten cybersecurity risk?
Yes! It is clear that a decentralised procurement process, lack of quality market data, and counterparty retention risks will mobilise a digital renaissance in the maritime procurement process.
The marine fuel procurement process is largely not centralised. Fuel buyers and sellers depend on a host of these tools from initial procurement inquiry to closing a transaction.
A decentralised procurement process causes issues for both buyers and suppliers alike. From miscommunication, missing documentation, lack of audit trails, and no formal process for new employees to adopt. These are just a few of the many and significant issues that the industry has experienced. This leads to a negative impact on an organisations’ operational efficiency which ultimately translates to their profitability.
2. Lack of Market Insights
Even some of the most established and largest marine fuel market players struggle with organically capturing market insight, which can hinder their growth by not having accurate supply and demand data.
For a buyer, price and supply availability dominates a buyers’ decision to pick a supplier. When a buyer does not have access to the current market landscape, in as close to real-time as possible, they may lose the opportunity to maximise profitability on their wider operations.
For a supplier, being able to market their location and product availability to buyers in the global market is critical. The consequence of not being able to access this level of market data leaves a white-space for traders to fill the gap, which eats into a suppliers’ profit margins.
3. Losing a relationship from counterparties
Generally, one of the most valuable assets in the marine fuel procurement industry is the relationship between supplier and buyer. When employees move from company to company it can easily shift the competitive landscape and market-share.
For example, when an employee at Supplier A with a direct transactional relationship leaves to join competitor Supplier B, without Supplier A having a centralised and integrated communication tool with counterparties, the employee can easily shift that relationship to Supplier B. Shifting the demand the employee was receiving from the buyer over to the competitor.
The industry has generally relied on ‘non-compete’ contracts to avoid these scenarios, however, those from the industry know that even with these measures in place, market demand shift still prevails as employees move around.
The competitive edge
Technology providers have been assessing the white space across the marine fuel and lubricants procurement process for a number of years. The industry faces a rise in disruptive technology providing optimisation of operations.
Players in this industry need to adapt to new industry standards of collaboration and communication, in order for buyers to become more effective.
Suppliers will also be striving to become more competitive on the global stage and all marine fuel participants will be racing to enhance the efficiencies of their day-to-day operations.
In their pursuit of these efficiencies, there is now a shift towards online procurement with organisations adopting tools like Bulugo. Not only to simplify and streamline the procurement process but to benefit from centralised communication between buyers and suppliers as well as transactions. Everything in the same collaborative platform.
These companies will be ahead of the curve and better positioned to mitigate the pain-points and risks the industry has endured for so long.
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