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Tradewind Finance Enters Bunkering Industry; Factoring a Natural Fit

July 24, 2023, 07:00 AM
Filed Under: Marine

Tradewind Finance, an international trade finance firm with headquarters in Germany, has successfully entered the bunker market, delivering a USD 2 million credit facility for an international bunker trader.

Bunkering, or the process of replenishing a ship’s fuel supply, is an essential activity when it comes to maritime travel. It also goes hand in hand with the movement of goods around the world, ninety percent of which are shipped by sea to a given destination. The bunkering process involves the transfer of fuel oil from a truck or barge into the fuel tanks of a ship typically stationed in or near a port. Safety protocols, ship-to-ship coordination, and precise measurement and transfer techniques all play a part in successful bunkering operations. These steps are taken to avoid the risk of an oil spill, or a client-supplier dispute arising from discrepancies in agreed-upon fuel amounts.

The bunkering business is marked by low margins and high volumes. To be profitable, therefore, requires maximizing fuel sales to marine customers. On top of the quantities that must be sold to generate profit, the crucial function of cash in the industry is noteworthy.

In the case of Tradewind’s new bunker client, factoring is a natural fit for their oil operation. Designed to increase cash flow, factoring makes it possible for the bunker broker to access the capital to trade high volumes of fuel, allowing it, in turn, to increase margins.

A spokesman from Tradewind commented on the new financing relationship: “We are proud to provide a factoring solution for our new client, enabling them to expand their customer base using the additional cash flow from the facility. With the facility in place, our client can concentrate on growth, knowing their invoice collection is covered, and does not have to wait long periods for their buyers to pay. Factoring with Tradewind has taken care of this. Other bunker traders are currently looking very closely at using these factoring facilities, so we are excited at the prospect of expanding more in the bunkering business.’’

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