Bunkering Choice Determinants: a Case Study on LNG in Antwerp

Bunkering Choice Determinants: a Case Study on LNG in Antwerp


Raimonds Aronietis, International Transport Forum at the OECD, Christa Sys, University of Antwerp, Edwin Van Hassel, University of Antwerp


This research investigates the bunkering strategy of the shipping companies. Why they bunker in a specific port? Which criteria are the most important? The questions are answered through a discrete choice experiment.


From a European, regional and local authority perspective, as well as the perspective of port authorities, it is important that waterborne transport becomes more sustainable. In the short term, Liquefied Natural Gas (LNG) or low sulphur fuel are two of the options seen as possible solutions to comply with new types of legislation (SECA-zones) for shipping companies making use of the port of Antwerp. An import aspect in the choice for the use of alternatives are the current day bunker strategies of the shipping companies.
Therefore, this research deals with the bunker market in general and the LNG market in particular, and wants to increase the insight into the strategy of the shipping companies, why they bunker in Antwerp or in another port (e.g. Rotterdam). Which criteria are the most important? The price per tonne, the quality of the fuel, or another characteristic (e.g. calling pattern)?
The questions are answered through a discrete choice experiment, targeted at evaluating the preferences of the shipping lines. A multinomial logit model is chosen for this experiment because of the low expected number of respondents.
According to the interviewees, the bunkering choice is done based on the origin/destination of the cargo. As a rule, the shipping company will choose to bunker at one of the ports that is calling to pick up or deliver cargo. Bunkering decisions in practice are usually taken by a department that deals with bunkering, which is always located in the head office of the shipping company.
In relation to the factors that a shipping company considers for bunkering, the respondents are unanimous in their comments. It is always the price and quality of fuel provision (trust that the correct quantity and quality is supplied) that are considered when the choice is made. The price is said to include also other costs that are specifically related to bunkering, or if a port is called at specifically for bunkering, then the related costs are considered as well. It must be mentioned that calling a port specifically for bunkering is not a common practice that shipping companies undertake regularly, but sometimes the routing of the ship or the price may make the shipping company consider it, e.g. due to sea and weather conditions. Antwerp scores on price at a similar level than competing ports, which is evident as bunker prices are derived from the global market.
Shipping companies said that they have reliability issues only in three ports that they are calling at: Piraeus, Malta and Antwerp. The bunkering in the port of Antwerp, according to the bunkering companies themselves, is said to be characterized by lower flexibility of fuel supply. It was said that currently there is also a very low capacity for bunkering LNG. Another problem that is mentioned is the perceived lack of regulation.
The insights from the research are helpful to both port authorities, who need to provide bunkering infrastructure and eventually regulate, as well as to suppliers, who need to invest in sufficient fuel and eventually bunkering vessels.


Association for European Transport