The Real Cost of Liquid Cargo Transportation

Posted by Bob Kessler

There are many factors that make Integrated Tug/Bargeup the overall cost to transport petroleum between marine terminals.  These factors are dynamic and diverse.  For this reason, traders frequently rely on anecdotal per-barrel costs to base trading decisions on.  If the community believes the average cost per barrel to transport naphtha by barge between a public terminal and the refinery is 98 cents a barrel, that is what the cost of transportation becomes for any near-term trades.  What if there was a capital project along the barge's route that consistently increased travel time?  What if the public terminal had an extended dock outage?  The cost of transportation would almost certainly go up.  The challenge is to provide accurate and current information to the traders to facilitate profitable trades.

In many circumstances these events are filtered through veteran analysts who have had similar circumstances in the past.  They apply these experiences to create a new adjusted transportation rate.  This is valuable but still an estimate.

There is a way to quantify the transportation costs accurately.  It requires a collaborative tool that allows Operations, Chartering, Vetting, and other departments that collect costs associated with every marine move.  If all the information is in one place, the actual historical cost of transportation becomes transparent to all.  Transparency brings efficiency.  Efficiency lowers cost.  Lower cost increases margins. 

PortVision has a proven suite of web based collaborative tools that help increase margins on oil movements by lowering transportation costs.  Want to learn how YOU can lower your transportation costs?  Then contact us today.

PortVision 360 AIS Vessel Tracking

Posted on May 29, 2013, 5:39:00 PM

Topics: Tools