OREANDA-NEWS. Shipowners are increasingly purchasing bunker supplies directly from producers in an attempt to cut costs, reducing the role of traders in the marine fuel market, according to an industry consultant.

At the Bunkering in Asia conference today, 2020 Marine Energy's Adrian Tolson said this process of "disintermediation" has resulted in a decline in volumes that bunker traders are selling, with a resulting impact on their profits.

The catalyst for this change was the collapse of Danish trader OW Bunker in November 2014, which disrupted the market's supply chain and structure and encouraged shipowners to look at purchasing supplies themselves.

A review of how trading firms operate in the shipping industry has been building for some time. Owners have struggled against freight rates that have been weak since 2008, while higher crude prices at the start of this decade also hurt their ability to turn a profit.

But trading firms do still have a role, Tolson said, as it is impractical to link up every buyer and seller. They also perform a useful function in areas such as providing credit and knowledge of supply options, and in reaching small suppliers.

"When OW Bunker collapsed, there was a sense among the industry that this was retribution, and that they got what they deserved," Tolson said. The collapse gave buyers and suppliers the opportunity to remake the supply chain in a way that worked better for them, and saw them forge closer relationships.

Consolidation in the shipping industry has also given shipowners more power, and has encouraged them to bypass traders in some cases. Technology has allowed buyers and sellers to connect more easily.