Bunker Olie: Tillid er godt, men er kontrol bedre?

Nicolai von Hallas & Gustav Hasbo

Student thesis: Diploma thesis


Opportunistic behavior in shipping is a well-known problem for all of the participants in the industry. In 2019 and 2020 alone, the small Danish dry bulk shipping company Baltnav found USD 954.080,76 worth of incorrectly reported bunkers on its time chartered vessels by using bunker surveyors. This thesis set out to evaluate how Baltnav can further guard itself from opportunistic behavior in its international activities from a theoretical point of view. To do so, the thesis took its baseline in theory related to Transaction Cost Theory. The main objective of the thesis is to demonstrate the application of Transaction Cost Theory on Baltnav and its on-going bunker desk restructuring scheme. Thus, depict the pros and cons between the former bunker desk scheme (in-house) and Baltnavs newly established bunker desk scheme called Nordic Energy Partners (external body). Based on the latter, we conclude that an establishment of Nordic Energy Partners can be determined as an internalization which should be governanced as such by Baltnav to minimize the risks involved in a bunker transaction where high levels of behavioral- and environmental uncertainty exist. We find that the governance of the contractual relation between Baltnav and Nordic Energy Partners is based on a hybrid setup, but with a predominantly hierarchy orientation to overcome market failures such as opportunistic behavior. In addition, we conclude that the establishment of Nordic Energy Partners can add some competitive advantages via economies of scale, speculation in bunker transactions and a closer cooperation with the physical bunker suppliers. Lastly, we conclude that in conditions of both high levels of behavioral- and environmental uncertainty, formal and informal safeguards do not work at its full potential. As such we find Baltnav’s bunker transactions to be defined by high levels of environmental and behavioral uncertainty. Due to aforementioned, an internalization of the bunker transactions will benefit Baltnav to streamline its bunker purchase processes and gain profit compared with the previous setup which indeed was more orientated as a market setup.

EducationsGraduate Diploma in International Business, (Diploma Programme) Final Thesis
Publication date2021
Number of pages90