The United Nations Conference on Trade and Development (UNCTAD) estimates that the shipping industry transported over 7.7 thousand million tons of cargo, equivalent to a total volume of world trade by sea of over 32 thousand billion ton-miles. However, managing complex cargo movements of crude and bulk commodities — across pipelines, storage facilities and vessels — remains a very manual and often disjointed process.
I recently had the chance to sit down and talk with Patrick Rooney, President and CEO of Navarik, to discuss how a cargo inspection solution can help reduce operational risk and increase straight-through processing.
Q: What are the typical cargo inspection solutions that companies use today?
Patrick: Because the majority of inspection data flows between external inspection firms and trading organizations (oil companies, trading firms, investment banks) most data associated with physical cargo transfer is gathered manually by spreadsheets, disparate systems, e-mail…even voice mail. These manual processes make it difficult to standardize and automate the cargo inspection process, resulting in great operation risk and cost.
Q: What are the issues/risk of using these manual processes?
Patrick: The trading of bulk commodities has accelerated in recent years. There is a need to standardize terminology and exchange of data between systems to facilitate straight-through processing and accelerate the settlement of trades. In a world where liquidity is being squeezed from the system; it has become increasing important to fully leverage the capital resources you have in play. To the extent that you can shorten settlement time, you essentially need less capital.
Q: How does implementing a cargo inspection solution drive efficiencies and mitigate operational risk?
Patrick: By standardizing and automating the process of cargo data inspection, you dramatically reduce the manual effort required to process inspection data. Another key driver is timely business intelligence. It allows Cargo Assurance to recover more losses from counterparties and helps operations, schedulers, and traders make more profitable decisions when selecting vessels, terminals, and suppliers.
Q: Navarik has seen rapid growth over the last two years. What are the driving forces?
Patrick: By targeting the largest international oil companies, we’ve been able to gain BP, Chevron, and Shell, as well as a major OPEC member, Venezuela, as customers. Our reach extends to over 4,000 users worldwide, including major inspection firms. Billions of barrels of oil are transported by sea every year. The value of the cargo and inherent operational risks and market volatility means companies are looking for ways to improve physical operations, reduce risk, and protect profit margins.
Q: What is Navarik’s focus going forward?
Patrick: We believe the broader oil market will follow the lead of majors in moving to our commodities inspection platform. Additionally, the entire bulk commodity shipping industry offers an attractive opportunity for our partnership with Triple Point. Together we’ll be able to offer a proven cargo inspection solution to not only existing oil customer, but customers in dry bulk commodities as well, including metals, potash, grain, and coal.
Q: What is the value of the Triple Point/Navarik relationship?
Patrick: I believe you succeed with outstanding people as a starting point, and that’s something we’ve seen at Triple Point. So when we look at our teams working together to offer the marketplace a truly integrated platform for straight-through processing — from deal execution, to physical operations, to deal settlement — I think that’s pretty special and something no one else is offering.
Interested in learning more about joint offering from Triple Point and Navarik? Read Triple Point’s Commodity XL for Inspections Powered by Navarik brochure.