As an international maritime hub, Singapore has been dynamic with all shipping activities, especially ships’ bunkering. 50+ majors and independent oil traders provide 45-50 million tons of fuel oil to thousands of ships calling or passing the hub. But now, it has a competitor, Zhoushan.
Wait a minute, excuse me, where is it? It is right there to the south of Shanghai, part of Ningbo Zhoushan Port which handled 1.1 billion tons of cargoes 2019. The twin contributed 73 million TEU last year.
Ningbo-Zhoushan area becomes one of the most dynamic economic areas in China. The local administrators made the decision to boost the bunkering business since 2014. They started with 665000 metric tons and achieved 4.1 million tons in 2019, while Singapore’s demand declined by 5% to 47.5 million tons.
Though Zhoushan’s share is only less than a tenth of Singapore, it grows, at a faster speed than any other port.
How do they do it?
Freeport policies apply. In April 2017, Free port (Zhejiang) was set up in Zhoushan, a free trade zone with competitive tax benefits, relaxation of regulations, plus the advantages of abundant human resources, local refining capacities. The big data how 80-11 thousand international sailings passed this area per year plus 1700-2000 ships repaired there.
Local government has been encouraging dozens of suppliers to do bunkering business in this area. The business keeps 13 suppliers (state owned and/or private sector) busy. CNPC joined last October by setting up Northeast Asia Ship Bunkering Centre focusing on crude/product trading, bonded business, exports and blending.
Pilotage and tonnage dues are ignored for bunkering operation at designated anchorages, these save a lot to ship operators; For a capsize bulk carrier, the 30 day tonnage due is estimated at 250-280,000 RMB. Pilotage costs another 25,000RMB plus potential tug boats and launch boat expenses. A Marshall Island registered handymax bulk carrier came in for bunkering and provisions, all were done in 4.5 hours without paying tonnage due (about 10,000 US Dollars), pilotage (about 2,000 Dollars).
The bonded bunkers can be even taken out of Zhoushan to as far as Sahnghai and Nanjing, that is more attractive to ship operators.
IT supports the bunkering process. The port has developed Bonded Bunker Supply Information System which connects traders, bunkering ships, agents, shipping companies and Customs House. One local agent said the customs clearance only takes 2 hours by clicking online, and paperless.
Combine bunkering with other services. Apart from bunkering, ships also need stores and provisions or spare parts, there are about 60 ship chandlers operating in this area, providing various services to ships. MV KSL Seattle got bunkers, catering and provisions, change of crew and DOC change in one call at the outer anchorage last November.
Night time operation? Yes, they can. 7/24 is not a legend.
Blending? The rule has been changed allowing blending imported bunkers.
VAT? Giving consideration to the huge refining capacity and the strong demand of low sulphur fuel oil, China just changed the law to give products export VAT refund. On January 22 this year, the Ministry of Finance, State Taxation and Customs House jointly published the decree allowing 13% VAT refund for bunker export as of February 1st, 2020. This includes bunkers supplied to international sailing ships. The first deal happened on 13thFeb by CHIMBUSCO with 5300 metric tons of bunker piped into their bonded tanks, the seller, namely PetroChina Liaohe Petrochemical Company, is entitled to the 13% rebate, which is estimated 2 million RMB.
Zhoushan has geared up, Singapore feels pressure now. Wish them both good luck!
Source:Simon Young
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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