How MFM and eBDN can fuel greater transparency and sustainability

The commodification of oil has created an intensely competitive environment, where bunker suppliers have been focused primarily on offering the lowest headline price to entice buyers, with no way to effectively distinguish themselves based on value or service. 

Over the years the lack of transparency between buyers and suppliers has evolved into an industry characterised by uncertainty and mistrust, as the methods for measurement and reporting have, until recently, not been sufficient to ensure accuracy on both sides.

On top of this, a reliance on analog, pen-and-paper processes and physical documentation has slowed progress and hindered technological innovation. This preponderance of manual solutions, giving way in recent years to digital solutions that nevertheless remain siloed, limits the ability of industry players to effectively cooperate and innovate, especially with regard to implementing effective methods for decarbonisation. 

The problems in price-driven bunker negotiations

The greatest challenges in bunker management all stem from a delay in digitalisation. Manual processes, paper documentation, analog communication, and a spreadsheet-based approach to managing and optimising operations all contribute to lowered efficiency and a lack of industry-wide transparency.

Nowhere is this more evident than in cases of short delivery. In these situations, the preponderance of outdated methods for measurement and reporting directly impact the reliability of both fuel quantity and quality. 

According to a whitepaper by TFG Marine, more than three percent of total bunker volume is lost to delivery shortages in many ports around the world, equivalent to an average cost of 96,200 USD per vessel annually. This creates an additional problem: as vessel owners receive incorrect delivery quantities, they are more likely to overstate their fuel consumption throughout their voyage, leading to incorrect efficiency reports and an inability to hit sustainability targets. 

In some cases, bunker fuel that is contaminated or in other ways substandard can result in increased emissions and environmental harm, as engines consume additional fuel to offset diminished efficiency. In even more extreme cases, contaminated fuel has been known to harm vessels, cutting off engines and putting both vessel and crew at risk. Such outcomes not only harm the environment and put shipowners at risk of breaching regulatory standards — they can endanger the entire voyage. 

From a cost perspective, bunker delivery shortages can have a huge impact (in the range of billions of USD) not only from under delivery but also from delays, disputes, and arbitration. Overall, bunker fuels make up approximately 60% of a vessel’s operational expenses, so any inaccuracies can have a substantial impact on profitability. 

Unfortunately, again according to TFG Marine: “Most shipowners lack any real capacity to assess supplier quality and service levels…Outdated quantity measurement practices are still widespread… inaccuracy is baked into the process, and there are ample opportunities for cheating on quantities.”

However, it is important to note that the problem is largely one of technology and transparency, and that many of the questionable methods reportedly used by some suppliers are a result of accidental misdelivery and not necessarily borne out of any ill intent. 

The promise of MFMs and eBDNs

Solving the challenges in bunker delivery requires digitalisation on both sides of the supply chain. The introduction and growing popularity of Mass Flow Meters (MFMs) and Electronic Bunker Delivery Notes (eBDNs) promises a new era of transparency, accuracy and efficiency in fuel transactions. 

“Widespread MFM adoption marks the first step towards a fully digitalised bunker industry that opens the door to all types of electronic data exchange possibilities…[and] will bring much-needed transparency to bunkering by generating accurate, real-time data for all stakeholders along the marine fuel supply chain.”

Whitepaper: Modernising marine fuel delivery, TFG Marine

Developed initially in the 1950s but only gaining approval for use by the American Petroleum Institute in 2002, MFMs are advanced systems designed to measure the mass flow rate of fuel as it moves through a pipe. This measurement is achieved by utilising the Coriolis effect, which quantifies the inertia of the moving fluid to determine its mass flow rate accurately. Beyond mere flow measurement, MFM systems incorporate additional sensors and algorithms to collect comprehensive data sets—including parameters like pressure, temperature, aeration levels, and vibrations—at regular two-second intervals. This rich, raw data allows for an in-depth operational analysis, proving invaluable for optimising fuel efficiency and operational performance.

Similarly, eBDNs digitise the traditional paper-based receipt system used to document the specifics of a fuel supply transaction—namely, the quantity, type, and quality of the fuel delivered. They are designed to encourage the use of mobile and cloud-based applications among fuel suppliers, ship owners, operators, and crew for completing and issuing bunker delivery documents. The shift to eBDNs is expected to bolster transparency and streamline the documentation process, marking a significant step forward in the digitalisation of maritime logistics for both suppliers and buyers.

Unlike traditional, paper-based BDNs, eBDNs automatically capture data in real time, minimising discrepancies and any resulting disputes that would otherwise arise from missing or incorrect information. The real-time nature of eBDNs also allows for much faster and more efficient communication between suppliers, operators, and other stakeholders. Additionally, eBDNs provide greater accountability as both buyers and suppliers have equal and traceable access to all the details of each bunker delivery. 

The integration of eBDNs with MFM data significantly reduces the potential for manual errors or intentional manipulation of fuel quantity figures, thereby ensuring a higher level of integrity and trust in fuel transactions.

On a global scale, the widespread adoption of eBDNs will contribute to a more resilient international trade ecosystem. By fostering trust and reducing barriers to trade, eBDN supports economic growth, international cooperation, and a commitment to sustainability. 

A realistic rollout: how MFMs and eBDNs will enter the mainstream

Singapore, the world’s largest bunker supply port, mandated the use of MFMs for bunkering in January 2017, setting a benchmark for the adoption of this technology in maritime fuel supply. The second-largest port, ARA, has announced mandatory MFMs in 2026, meaning it has taken almost a full decade for this technology to grow in significant usage. 

In regard to eBDNs, Singapore once again led the charge by becoming the first port worldwide to mandate their use in November 2023. 

The question now is how willing is the industry to adopt these “new” tools for digitalisation. Will we continue to see delays or have we learned our lesson from Singapore’s trial with MFMs?In other words, is it time to accept that when the world’s largest port mandates a technology, the world’s ports will follow?

Regardless of the timeline, implementing MFMs and eBDNs will be transformative in ports around the world, resolving issues related to intentional and accidental misdelivery. Real-time access to more accurate data promises to improve trust between parties and cut down on time lost in disputes and arbitration. 

The only question is how long the industry will take to embrace this future. 

Greater sustainability starts with bunkering

Efforts to decarbonise global shipping and meet sustainability goals require shared standards for bunkering. MFMs stand at the forefront of this transformation by providing shipowners with accurate, real-time data on fuel delivery which not only facilitates precise reporting but also supports strategic decisions aimed at decarbonisation. The heightened accuracy afforded by MFMs enhances fuel efficiency, which in turn helps to reduce greenhouse gas (GHG) emissions associated with maritime operations.

Moreover, the trust engendered by the reliability of MFMs encourages a shift towards alternative, more environmentally friendly fuels. Despite their higher costs, these sustainable fuel options become more viable with the assurance of precise measurement and accountability provided by MFMs. Additionally, greater transparency reduces the risk of disputes, minimising the time ships spend idling in port, in turn decreasing idle emissions and improving fuel efficiency. 

“Efficient bunker planning is not just about saving money; it's about ensuring a greener, more sustainable, and profitable future for the shipping industry.”

Whitepaper: Unravelling the complex challenges of maritime bunkers, ZeroNorth

Overall, MFMs empower shipping companies to invest in their sustainability portfolio, for example by investing in more efficient engines, adopting energy-saving technologies, and optimising routes to curtail fuel consumption and emissions. 

Challenges, partnerships and what’s on the horizon

Some critics have suggested that wide-spread implementation of MFMs will lead to price increases, despite compelling evidence to the contrary. Bunker suppliers are naturally concerned that their investment in new technologies may not be rewarded as buyers continue to purchase based on headline price. 

What is clear, however, is that more than 95% of buyers surveyed said that they would prefer to buy bunkers from a supplier who uses MFMs, leading to a total transformation of market efficiency:

“When every supplier and every buyer has real-time access to their fuel mass data, overall shipping costs will fall, ullage-based disputes will disappear, supply chains will accelerate, energy transition efforts will gain focus and intensity, and the most efficient operators will be rewarded according to the added value they bring to the market.”

Whitepaper: Modernising marine fuel delivery, TFG Marine

To realise that future, both suppliers and buyers must be equipped with the digital tools they need. The best, most efficient, and indeed, the only way forward is through strategic partnership and collaboration with experienced service providers who are positioned to help solve these industry challenges and create more shared value. 

For our industry to reach Net Zero by 2050, we need to address the challenges associated with an opaque and variable bunker market head on. The technology exists, so the time is here to commit to new methods for bunker dealing and reporting for the betterment of our industry and our planet.