Benchmarking of marine bunker fuel suppliers: the good, the bad, the ugly

Abstract

PurposeThe purpose of this paper is to construct a realistic best practice benchmark and develop a methodology for comparison of individual suppliers of marine bunker fuel. As is well‐known in this trade, unfair business behaviors in the bunker fuel market are not uncommon, resulting in financial losses for the buyers.Design/methodology/approachEstablishing a best practice will naturally involve some degree of subjectivity as there is not an a priori correct answer to this problem. Using the concept of membership functions from fuzzy set theory, a score can be derived from a best practice benchmark histogram. The main advantages of this method are its relative independence both of sample size and of the underlying distribution, as well as being computationally very efficient.FindingsThe authors' methodology turns out to be more powerful than standard descriptive statistics, as it is less sensitive to outliers and is well suited for small datasets and even single numbers. When applied to data for all suppliers worldwide, it is shown that the number of good suppliers is actually much lower than might be expected.Practical implicationsBunker fuel is a major expense for ship owners, and can easily reach $30 million/year for a single container ship. There is, therefore, a considerable interest in the market for benchmarking of individual fuel suppliers. The authors' methodology is also applicable to other quality‐related fuel parameters.Originality/valueTo the best of the authors' knowledge, this is the first attempt to benchmark actors in the marine bunker fuel industry and to quantify their behaviors.