ENERGY TRADE, Basic Tips & Factors For Global Delivery!

PROFESSIONAL TIPS AND BASIC FACTORS FOR IDEAL “ENERGY TRADE” CONCEPT ON A GLOBAL SCALE

Energy Trade

Ordinarily, global trade is classified into two categories, which are dry (solid) and wet cargo, while the latter refers to the subject of this discussion which is also known as breakbulk. Typically, global energy trade cut across a number of wet cargoes, such as crude oil, petroleum products, and liquefied natural gas (LNG), although, hydrogen is also inclusive yet in lower demand if compared with other energy products. Yet, these products remain unique irrespective of market demands.

Therefore, it will be fair to shape our thought, more significantly, based on professional strategies deployed in this sphere of global trade, and for obvious reason, via a specific transit mode or shipping scenario.

Typically, wet cargoes are often transited or shipped via two mediums – with the aid of sea crafts irrespective of the category which is dependent on the volume, distance, and draft.  Secondly, via a transit channel (pipeline). The latter is predominantly used to transit gas and refined petroleum products, precisely the aforementioned for cross-border trade.

Energy, as we know, is core to our daily needs, and its commodity source isn’t an exception in this regard. As global warming remains a huge concern due to climate change, the need for greener energy has rather become paramount, which in turn has extensively broadened the demands of these products.

Nonetheless, it will be nice to bear in mind that our focus on energy trade centers on shipping and the logistics techniques deployable for wet cargo. Let’s say, for instance, if one is to ship liquefied natural gas (LNG) across borders with the aid of a vessel, notably a bulk carrier type – it’s evident there are factors to be considered before loading the ship, and in turn, have her sail to deliver the product. While on the other hand, a different approach will be given if the subject commodity it’s to be transited via a flow channel.

FIRST SCENARIO, VIA VESSEL

Ideally, there are factors to be noted before deploying and engaging a vessel (bulk carrier) for the carriage of any of these products over a specific distance. However, when this is scheduled to be shipped with the aid of bulk carrier vessels in a unidirectional dimension, with return voyage in ballast which frequently occurs at a slightly faster speed. And if one is to demonstrate his competence while taking advantage of unidirectional trade precisely for this category of product, then “oil bulk ore (OBO) carrier” should be deployed as this will certainly prove your versatility in this sphere of trade. The reasons, being that the OBO allows switching from one trade to another based on market demands irrespective of regional and political concerns. 

One factor to be kept at our fingertips about this business, more significantly before engaging is the cost of vessel chartering which is practically billed per voyage. This practically cut across a number of areas, which entails the bunker (fuel or diesel) cost needed for her sailing and during product transfer (STS) or unloading process, including crew cost. However, this brings us to “voyage estimate”, which will be a topic of separate discussion.

The cost of vessel chartering, precisely a bulk carrier depending on its cubic capacity cost 10 thousand dollars – 18 or 20 thousand dollars per day, with this in mind, it’s evident that her quickest transit route from loading point while noting her safety is something that should be considered paramount since vessel transit time is often a huge factor. Hence, giving this an expert approach wouldn’t be much to ask.

Although, political and diplomatic concerns could mean a stumbling block when it comes to trade. Given that top players and world powers in this sphere will do all they can to ensure their fair share isn’t breached by any competitor. And this is why ships flying the actual flag or flag of convenience of that country should be considered a priority, otherwise, the hope of doing such business could be dashed, in addition, its advisable to take advantage of the shipping policy provision like the UNCTAD in order to have an edge while accessing the cargo sharing formula which is beneficial to a country’s indigenous shipping carriers or company.

Going forward, vessel or ship transit route is key when it comes to trade via maritime. However, while noting the vessel’s deadweight with cargo on board, for obvious reason, a terrible outcome should be avoided, hence, opting for the best transit route from an expert point of view should be seen as the icing on the cake owing to the fact that she needs a safe route to navigate through when it comes to energy trade. Further on this, which could prove a lot technical is the determination of the cubic capacity occupied by the subject cargo which is a notable factor.

On a contrary, when it comes to ship-to-ship transfer (STS) [this will be a subject of a separate topic], mooring master will be deployed precisely to coordinate the mother vessel and the daughter’s vessel during a transfer process. However, in the absence of an STS process, she should prepare for a safe berth in order to unload, while port dues and tariffs based on the tonnage are meant to be effected prior to her inward process. Yet, there are also taxes and tolls for vessels or cargo which are payable at the port of unloading. These are meant to be paid as soon as she has been cleared to berth.

Moreover, draft and tidal restrictions is also a significant factor that must be taken into account to ensure she lay “safely afloat”. Yet, Weather as a factor is also important as this could lead to delays or waiting due to rain, storm, ice, or swell.

Furthermore, yet in a broader dimension, it will be nice to bring this subject down to port-to-port or tank farm-to-tank farm trade procedures. Hence, at this juncture, the draft of the jetty is something that should be considered vital, taking into account the tonnage of the subject product on board the vessel which ensures she does not get grounded when the tides are low. 

Lastly, if all these factors are put into consideration before embarking, the outcome of such energy trade will certainly turn out a professional one.

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