Bunker costs in inland barging

Just like seagoing vessels, inland tankers require bunkers to operate. Bunkers, which are essentially the fuel used by the barges, are a significant part of the cost and therefore can impact the prices for inland barges. For now quite stable but this has been in different in the past. With over 1500 barges in the inland tanker industry and over 6000 barges in the bulk industry the inland barge bunker a huge market.

Key players in the market

Several companies are active in the inland barge bunker market, each offering different services and pricing structures. Some of the ‘larger’ players include Reinplus Fiwado, De Wit, Terlouw, and Slurink but there are many more. These companies provide essential bunkering services to inland tankers, ensuring that the vessels have the necessary fuel to operate.

Contracts and pricing structures

Contractual agreements play a pivotal role in the inland barge market. Previously, it was standard for contracts to include time charters with bunker prices factored into the overall rate. Around five years ago, these prices typically ranged from 500 to 600 euros per cubic meter (m3). However, the market shifted and bunker prices went up to nearly 1000 euros per m3—a substantial increase that poses challenges when these costs are fixed in long-term contracts. Currently the prices are back at the same level as before +- 600, euro per m3.

This spike in bunker prices at the time, resulted in losses for the barge companies / owners with bunker prices included in contracts , since then, the market moved towards a more adaptable pricing structure. All-in prices, which bundle all costs, are becoming less prevalent. Instead, there is a growing preference for pricing models that can better accommodate fluctuations in bunker prices and other variables and All-in cost are not that populair any more.

Some contracts allow time charter barges to bunker at designated stations or bunker suppliers, ensuring a steady supply of fuel without too much administration.

Some opt for a monthly payment system, where the cost is billed at the end of the month based on usage.

During time charter negotiations, the oil company usually has the liberty to arrange bunkers independently and request quotes at different bunker suppliers. This flexibility allows them to negotiate better pricing terms or use their preferred bunker suppliers, leveraging their market position.

Barge companies or owners with multiple barges also possess considerable negotiating power. Their strong fleet enables them to secure more favorable prices and discounts, enhancing their bargaining position.

Factors influencing bunker costs

Several factors influence the cost of bunkers for inland barges:

Product type: Different types of barges have varying fuel requirements. DPP barges deliver products which have to heat, to heat the tanks bunkers are being used which can be an expensive undertaking if you are sailing to the upper Rhine for 3 days and have to maintain or heat VGO or waiting several days for discharging.

Sailing Conditions: The direction of sailing can significantly impact fuel consumption. Barges sailing up the Rhine, against the current, will consume more bunkers compared to those sailing downstream. This increased consumption leads to higher costs, particularly for longer journeys.

Bunker consumption and km’s

The amount of bunkers a barge consumes is a consequence of the sailing range and speed.

The average bunker capacity for an inland tanker barge ranges from 80 to 100m³. However, most barges only utilise half their capacity, particularly in the ARA (Amsterdam-Rotterdam-Antwerp) region, due to shorter sailing distances and greater bunker availability compared to the Rhine region.

Another reason for taking less bunkers is the intake of the barge, the less bunkers the barge takes the more product the barge can load when sailing for example to Amsterdam where there is a draft restriction. This extra capacity could make the difference in optaining a trip in the spot market or loading extra tons and make more revenue.  When sailing over the rhine with low water periods barges choose to take less bunkers in order to take more volume.

When for example a barge is mainly occupied in the upper Rhine region without sailing back to the lower Rhine or ARA it is possible the barge is not able to bunker at the preferred bunker supplier because the limited options in the upper Rhine.

The consumption of a barge in clean service can vary significantly, ranging between 30m³ and 60³ per month or even more depending on the number of trips and used routes. For example when a barge mainly stays in the same port, usage will be around 30m3, performing mainly Antwerp to Rotterdam trips or Antwerp to Amsterdam trips this volumes will range between 50 – 60m3 per month. During different operational activities, the barge's fuel usage fluctuates. When sailing, the barge typically consumes around 200 liters per hour. While using the pumps for discharging, the consumption is approximately 75 liters per hour.

Additionally, when waiting for loading or discharging without access to shore power, the generator uses roughly 7 liters per hour.

Actual cost

When having multiple barges as and owner, barge company or oil company it can be worth it to compare prices and request volume discounts at several bunker companies. It may not only have to be pricing, it can also be a competitive advantage if there is technology which allows your company to track the costs and volumes per barge for example.

ARA region

Average cost of ARA barge, when using 40m3 per month at 600 euro per m3 for twelve months this amounts to 288.000 per year, when you can arrange bunkers at a different supplier for 550 euro per m3, this amounts to 264.000.000 per year which saves you 24.000 euro.

Rhine region

When for example a Rhine barge is deployed for ARA-Karlsruhe / Basel trips a trip can easily use 15-20m3  / 20-25m3. When performing 4 trips per month a 20m3 per trip, 80m3 per month a 960m3 per year a 600, euro amounts to 576.000 euro.

These figures also make all stakeholders aware when having price negotiations about the share the bunker cost have on these trips. For example, with the currents rates ARA – Basel, fuel cost will be ¼ of the revenue or price of a spot trip.

Therefore, when negotiating time charters or bunker contracts, looking at bunker suppliers and the discounts an owner, barge company or oil company receives might be also wise to look at as this can add up to a significant amount. Especially when having multiple barges in your fleet.