OWB SOLUTION SELLING Guide

P H Y S I C A L S U P P LY | G LO B A L T R A D I N G | R I S K M A N A G E M E N T

SOLUTION SELLING GUIDEContract Of fering ProcessSolution Selling Process

Dear Reader,

This Guide structures all crucial tools and processes of the 2 different approaches under Solution Selling Project: Contract Offering and Solution Selling.

There are a number of corresponding templates and PPTs, which will support and facilitate your actions when selling solutions. – You’ll find them all in CRM Library under Global Sales/Solution Selling.

We hope you will find them pertinent.

Best regards,

Global Sales

CHAPTER I

Contract Offering Process

4

1. E VA LUATE ENQUIRY

HOW TO START EVALUATING

a) All contract inquiries will be prioritized by • Strategic value • Risk value

b) There are 4 prioritizations� • High Strategic and High Risk Value� • High Strategic Value� • High Risk Value� • Low Focus

c) For each prioritization there will be� • Organization and roles’ description� • Coordination description� • Mandate description

CONTRACT – PRIORITIZATION – MATRIXDetermine impact of contract

• Each contract inquiry will be run through the prioritization matrix. This determines the organizational and mandate structure of the contract offering

• Exception to the rule: Any Global Key Account client contract will not be rated, but handled by Global Key Account Manager

LOW FOCUS ON CONTRACTS

HIGH STRATEGIC VALUE HIGH STRATEGIC VALUE + HIGH RISK VALUE

HIGH RISK VALUE

0 12 24

Str

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alue

Risk Value

0 12

24

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1. E VA LUATE ENQUIRYS

TR

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ISK

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3 STEPS AND 16 QUESTIONS TO DETERMINE STRATEGIC AND RISK VALUEFocus on 3 contract-based parameters: Strategic, Risk and Contract Value

1. Client’s historical claim rate2. Terms & Conditions used3. OWB credit of high importance to client

1 P. Contract will increase operation by efficiency2 P. Stem size compared to OWB operation3 P. Product range in contract4 P. Own cargo supply of product in contract5 P. Critical to business unit

• Client credit line insured• Duration of contract• Index related price• Pricing of contract• Volume spread OWB option• Volume spread client option• Effect on OWB credit line from suppliers• Effect on liquidity

1 WW. % spot business related to contract2 WW. Port is a Purchase Center area3 WW. Number of ports in contract4 WW. Contract effect volume purchased in port5 WW. Support from local suplliers

1

2A

3

2B

Group

Physical Division WW Division

Strategic Value -2 1 2 3

1. Client’s historical claim rate Above 3% 1%–3% below 1%

2. Terms & Conditions used Client Bimco OWB

3. OWB credit of high importance to client low medium high

Physical Division

1 P. Contract will increase operation by efficiency 0% 1–10% above 10%

2 P. Stem size compared to OWB operation no match okay perfect

3 P. Product range in contract no match okay perfect

4 P. Own cargo supply of product in contract No Yes

5 P. Critical to business unit No Yes

WW Division

1 WW. % spot business related to contract zero up to 20% above 20%

2 WW. Port is a Purchase Center area No Yes

3 WW. Number of ports in contract 1 1–5 global

4 WW. Contract effect volume purchased in port 0-10% 10-20% above 20%

5 WW. Support from local suppliers Negative impact Positive impact

Risk Value

1. Client credit line insured 0-20% 20–75% above 75%

2. Duration of contract 3 month 3–6 months above 6 months

3. Index related price BunkerWire Fixed Price Cargo index

4. Pricing of contract day of nomination day of supply monthly average

5. Volume spread OWB option 0% 0–10% above 10%

6. Volume spread client option above 5%

7. Effect on OWB credit line from suppliers not enough enough

8. Effect on liquidity Negative impact No impact Positive impact

6


IN-DEPTH ASSESSMENT OF PARAMETERS

7


SET THE RIGHT TEAM – ORGANIZATION AND MANDATE OF CONTRACTSWho should be part of the contract teams – set the right team:

High Strategic + High Risk Value

High Strategic Value High Risk Value Low focus

Contracts will be led by formal contract organization, and backed-up by expert team:

Contracts will be led by Solution Seller in charge

Contracts will be led by Solution Seller in charge

Contracts will be led by Manager of Business Unit

FOCUS ON STRATEGIC AND RISK VALUE

FOCUS ON STRATEGIC VALUE

FOCUS ON RISK VALUE

DONE LOCALLY

a) GS Consultant in charge

b) Solution Seller in charge

c) Traders: Business unit representatives

d) Risk Management: IRM appoints PiC

e) Credit: Credit Dept. appoints PiC

f) Technical issues: Technical Dept. appoints PiC

g) Terms & Conditions: Legal Dept. appoints PiC

h) Quality issues: QSD appoints PiC

All needed support functions to be participating in contractpreparation

All needed support functions to be participating in contractpreparation

All contract prioritization matrixes must be sent to 2.OWB.SolutionSelling There is in general no coordination on low focusThe involved Solution Sellers coordinate all work on tenders

between potential units which are effected by the same contract

If more units are seeing same contract inquiry, the one with highest strategic value will have the lead of the contract

The Global Sales Consultant has full mandate in all OW Group

The Unit Solution Seller is in full control with local management



Org

aniz

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n &

Ro

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Inte

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C

oord

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2. CREDIT CHECK

CREDIT LINE1) Check in SLX whether any credit is left for that client2) If there is no sufficient credit line, consult Credit Department and apply for more

Credit Application – Overview

Existing line: Applying for line: Insured line in USD: Navision customer no.Physical: Physical: RMS: RMS:

Customer, name, company reg. no. address, website etc.: Company Reg. Nbr (mandatory info):

Person applying: / prepared by: Customer contact: Contacted Ownership:

Market segment:

Description:

Financial overview - 3 years preferred: Possible guarantees:Turnover: PCG Ebitda Bank Guarantee Ebit Ebt Net profit

Fixed assets Equity Current assets Long term debt: Total balance Current liabilities: Cashflow:

Payment performance

Comments: Recommendation:

9

3. PREPAR AT ION – PRIOR TO TE AM BRIEF ING

CHECK LIST ON WHICH INFO IS STILL MISSINGThis overview shall help you to structure and qualify the knowledge you already have, and thus make you aware of what is still missing.

• Volume – overall, lot size

• Period – notice, future possibilities

• Ports

• Vessel types

• Quality – specs, grades, HS vs. LS,

• Payment terms – liquidity, odd payment terms, discounts

• Credit lines

• Previous experience with client – Trading pattern, claims history, payment performance

• Currency

• Any other contract in place with a similar matrix?

• Client challenges

• Own challenges – suppliers knowing about the contract

• Pricing method – better solutions

• Protocol – who to present it and how?

• Market opportunities

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4. DO TE AM BRIEFING

AGENDA TEAM BRIEFING�Participants

• Account Manager

• Solution Seller

• KAM

• Global Sales

• Risk Management

Presentation of the customer

• Done by account manager

Presentation of contract

• Done by account manager

�Evaluation of the contract value for OW Group

• Group discussion

�Evaluation of opportunity with Purchase Centres


�Discussion of possible strategy


�Summary and actions

11

5. CL IENT APPROACH

QUESTION BANK – COLLECT INFORMATION ON TENDER RECEPTION

General Tender Questions

• Why did you decide to take this volume on contract?

• Do you have other tenders in the market right now? What? Where?

• Why did you choose a contract period of 1, 2, 3, 6, 12… months?

• How would you rank the three most important factors affecting your decision on this contract?

• Are you familiar with OWB General Terms & Conditions?

• Do we have to comply with special requests/conditions on this contract?

Volume

• How much bunkers do you expect to lift in this particular area for the coming contract period (lowest level possible – highest level possible)?

• What was your total consumption last year and the year before that?

• Do you expect any changes in your current fleet operating in this area within the contract period?

• How much of this tender’s volume could be moved to another - and maybe more attractive - destination?

• What do you think of the principle: “The more volume – the less average price per MT”?

Products

• How would your total consumption divide into product specifications; HSFO, LSFO, MGO etc.?

• Exactly what products did you request last year?

• Did you experience any quality issues with your current vendor and how were those handled by your current vendor (agreed procedure)?

• Did you experience any quantity issues and how were those handled

by your current vendor (agreed procedures)?

• Did you consider choosing a product with a higher viscosity, when the spread was attractive?

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5. CL IENT APPROACH

Nomination

• When and where do you usually receive bunkers?

• How early do you nominate the bunker supplier?

• Do you nominate the bunker supplier at the same time as you arrange discharge of your cargo?

• How could it be possible for you to make the bunker nomination even earlier?

• Do you always get your supplies within the time window agreed? If not: Any compensation from supplier’s side?

Pricing

• How is the pricing set today from your vendor?

• Why did you agree on this particular pricing model?

• Did you discuss any other pricing models with your supplier?

• Which pricing models have you been seen during the years?

• Do you think the current pricing model fits your business profile good – and why?

• What indexes are you priced on today? (index + premium)

Payment/Credit

• What kind of payment terms are you used to with your current supplier?

• What kind of payment terms would you look for in the future?

• What do you think about a rebate on the bunker price if you pay earlier – e.g. within 10, 15 or 21 days?

• Would you be kind and forward your financial numbers to secure the necessary credit line?

13

5. CL IENT APPROACH

Risk

• Are you willing to take more or less risks than today?

• Being in a floating market where price has been going up and down during recent year – how did that influence your business in general?

• Have you been successful of transferring the increase in cost level (bunkers) to your customers?

• What you do think of having a risk profile from your bunker purchaser within the contract period that in a greater extent suits your business profile?

• Are you familiar with the phenomenon “minimum” and “maximum” bunker prices on a contract basis?

Vendors

• If you should make a “top 3 list” of your most preferred suppliers in this area – how would that look and why?

• How do you consider OWB compared to other vendors?

• What kind of services from your vendors are the most important?

• Did you “blacklist” any physical suppliers in this area? If so, who?

CHAPTER II

Solution Selling Process

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1. QUA L IF Y OPPORTUNIT IES

QUALIFY OPPORTUNITIES

1) Check credit line to see if we can secure the opportunity

• If not, apply for credit

2) Verify information provided on opportunity

• Can we make money?

• Strategic fit?

• Any roadblocks?

3) Rate the account

• Evaluate size of opportunity

4) Do background research

5) Update Customer House

• Insert information into SLX

6) If the ratting is A or B, proceed to make a specific plan and use SLX/TARGIT for this

• Use current performance of account

• Set targets for account

• Fill in actions on how to get there

CUSTOMER HOUSE

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CLIENT NAME, ACCOUNT MANAGER, RATING

Where are we? (2012 YTD) Where are we going (next year)What to do? (Action plan)

Potential Realized Share

Volume 28.000 4,805.88 17%

Target Share Growth%

Volume 15,000 53% 36%

What to do? Who? When?

Sell the idea of floating price contract for Rott.

AA BB Q3

Discuss about OPDR’s approved suppliers in Rott.

AA BB Q3

They used to fix prices for short periods in the past. Are they still interested in STFP??

AA BB Q3

Discuss early payment incentive.

AA BB Q3

Prepare meeting by bench-marking the client’s buying with OWB to platts

BB Q3

Performance Equation Globally

ENQ FIX RATIO TP/MT STEM SIZE

51 37% 1.2 253

Performance Equation Globally

ENQ FIX RATIO TP/MT STEM SIZE

102 58% 3 253

Partner Level Today

Spot Exclusive Contract Outsource

100% 0 0 0

Partner Level Strategy


50% 0 50% 0

MEETING WITH CLIENT IN YEAR (x)

J F M A M J J A S O N D

X X

Current Trade Profit in USD: 5,729 Target Trade Profit in USD: 45,000

Credit ?• USD 1 Mill (500,000 insured) Payment?• Always onTime Claims?• 1 Quality Claim – closed

Type in targets• First floating contract signed with client

before end 2012 regarding 7,500 MT yearly• • •

ATTACK PLAN FOR ABC

Partner Level Today


100% 0 0 0

Partner Level Strategy


50% 0 50% 0

MEETING WITH CLIENT IN YEAR (x)

J F M A M J J A S O N D

X X

1. QUA L IF Y OPPORTUNIT IES

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2. BOOK MEET ING

IDENTIFY CONTACT PERSON

1) Key contract variable

• Managers + C level + Legal + Finance

2) Value added services

• The person or manager placing the order

3) Advice

• Managers + C level + Staff

4) Business foundation

• CFO/Finance/Legal

5) Statement

• Remember regional differences in clients’ willingness to meet, and on topics

BOOK MEETING – BEST PRACTICE

1) Locate right person – or get confirmed he is the right person

2) Prepare possible dates (range of dates)

3) Send agenda – Ask for input/amends

4) Align timing, goal and expectations to meeting with client

5) Prepare for objection

6) Prepare re-treat goals

7) Choose location/venue in advance

8) Prepare reason for calling

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CONTACT LEVELS IN CLIENT'S ORGANISATION

CEO/CFO/COO

STRATEGIC LEVEL

Managers: Purc, Char, Ops, Tech

TACTICAL LEVEL

Broker, Trader, Purchaser, Charter, Operation, Tech

OPERATIONAL LEVEL

2. BOOK MEET ING

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3. PREPARE MEET ING

PREPARE AN AGENDA• Know the objective for the meeting• Who is participating• Where can we help?• What will be discussed, select right topics, remember to summarize and determine actions• Prepare – Questions to ask (use Question Bank) – Pitch you wish to present – For objectionKey to a good meeting is to always agree on the way forward!

QUESTION BANKGET TO KNOW YOUR CUSTOMER HOUSE

Production Resources

People

Market Product

Finances

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QUESTION BANKSELECT AND PREPARE QUESTIONS YOU WILL ASK

A: Finances

• How does your company make money – core business?

• What are the future perspectives of this core business – affection from economic crisis?

• What are the success criteria for your company in terms of turnover on Group basis?

• How can the bunker purchaser assist you to reach these criteria?

• How much of the total expenses are related to bunker costs?

• How is your company registered?

• If annual reports not available will you share with your main counterparties?

• What are your financial expectations for the next 2 years?

• What are your credit terms from other suppliers?

• What is your preferred trading currency?

• Are you doing any hedging?

B: People

• What is your position?

• What is you background?

• How do you report in the org chart?

• Does your company have a dedicated bunker desk?

• How many purchasers?

• What kind of background for the other purchasers – specific preferred background?

• Internal, how do you cooperate and communicate with your operators?

• What is your personal criterion of success?

3. PREPARE MEET ING

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3. PREPARE MEET ING

C: Product Resources

• What kind of financial tools are you using (Reuters etc.)?

• Do you have WW indications?

• How can OWB assist you or your operation department in any kind of missing information

for the time being?

• How would you prefer to have this information – by email, phone or yahoo?

• How often do you want to receive information or just general information from your bunker purchaser?

D: Market

• What market do you operate in?

• How is the market performing?

• Who are your main customers?

• Which suppliers do you currently work with?

• What is the basis for your company to select suppliers?

• How do you see the ideal bunker supplier in a perfect world?

• Can your current supplier satisfy all your needs?

• Could you try to rank these criteria – important one first?

• If you should change your purchase strategy – what should OWB do better and different?

• Which areas do you operate most in and which ports are your major bunker ports?

• Do you have any challenges in your major ports?

• Do you have any bunker needs worldwide, which you are not getting fulfilled? What is the reason?

• Your major ports – how often do you call these ports and how much are you buying here monthly basis?

• What is the total yearly consumption of bunkers (divided in products)?

• How is your fleet’s product portfolio divided in 380 cst / 180 cst / gasoil / MDO, etc.?

• Size of fleet – how is the fleet compound – ownership / chartering, etc.?

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E: Product

• What types of products do you transport?

• Where do they originate from?

• Where do you ship them to?

• What is expected to happen within the next 12 months within your field?

• Any regulatory changes planned that will impact you?

• Do you foresee any changes in supply / demand patterns?

• Which terms are important for you in the choice of physical supplier?

• In your opinion how do the physical suppliers live up to your standards?

• Contract versus Spot purchasing – percent-wise – what do you prefer?

• If a dispute occurs – how do you solve this case today with your present bunker partners?

• Are there quality, quantity or delay issues you face?

PULL CUSTOMER REPORT• Pull customer report from TARGIT, use travel

reports and knowledge from colleagues/former OWB account manager

• Familiarize yourself with background and history of the account

CUSTOMER REPORT | 18/01/2013

Customer Report

1

for Zim Integrated Shipping Services Ltd.

FOR INTERNAL USE ONLYReport does not include Sub Accounts

3. PREPARE MEET ING

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3. PREPARE MEET ING

IDENTIFY PAINS / NEEDS OVERVIEWUSE QUESTION BANK AS PREPARATION TO UNCOVER INFORMATION

Operational needs/pains

• Credit issues

• Claims

• Workflow/paper flow

• Avails

• Surveyors

• Communication procedures in trading

• Timely deliveries/demurrage

• Quality issues

• Quantity issues

• Delivery updates

• Early payment incentive

• Lubes

Strategic

• ECA

• Contracts

• Bunker Purchasing strategy (spot, contracts, outsourcing, exclusive)

• Port flexibility

• Risk Management Sales

• Payment incentives

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HOW TO CONDUCT MEETING / PHONE CALL BEST POSSIBLE

4. MEET CL IENT

AGENDA ELEMENTS AND TIMING AT MEETING

MeetingDuration

• Small talk

• Present the objectives of the meeting / phone call

• Check and confirm that the customer agrees

• Update on latest developments from both sides

• Objective is to get the customer to talk for the majority of the meeting

• Ask leading yet open questions

• Leading questions to our strengths so that the customer will tell you they want this

• Pitch our products by relating to what the customer said they want

Introduction (10 %)

• Ask questions to uncover pains / needs

• Present your pitch

• Use ‘Customer House’

• Use Question Bank

• Take notes for minutes of meeting / actions

• Stick to agenda

• Summarize

• List actions

• Agree on next meeting

• Get feedback

Contents of meeting(70 %)

Actions and next steps (20 %)

26

4. MEET CL IENT

POSSIBLE OBJECTIONS WHEN TALKING TO NEW CUSTOMERS

"We only use brokers."

"What makes you so different from all the others?"

"My current suppliers are doing a great

job!"

"Tell me tomorrow's oil price if you are

the expert."

"We already have enough suppliers."

CONDUCT MEETING / PHONE CALL

"We only work with physical suppliers."

"We only want the lowest price."

"I’m simply not interested."

"We used OWB some years ago but had claims."

27

HOW TO HANDLE OBJECTIONS

Objection Objection question Outcome

“We already have enough suppliers”

Are they able to satisfy all your needs? What are their specific needs?

“We only want the lowest price”

Is quality, quantity, claims, or delays not important to your business?

Ranking of areas where we can deliver value

“Tell me tomorrow’s oil price if you are the expert”

Oil market is difficult to predict but we do have an in-house Risk Management team who specializes in hedging. Are you currently doing hedging?

Show our diversity in product offerings

“We only use brokers” Brokers are good for passing on information but rarely add value to your business with proactive advice. What is the reason for your company using the broker purchase strategy?

Consult with appendix on bunker buying channels for main selling points

“We used OWB some years ago but had claims”

We have worked hard on resolving issues to ensure great service and our claims rate is below market average. Are claims a concern for your business?

Check OWB claims rate in CRM for accurate number. 2011=1.7 % globally

“My current suppliers are doing a great job!”

What are they doing that is great? Ranking of areas where we can deliver value

“What makes you so different from all the others?”

We want to understand your business and try to assist you with challenges you face. Do you mind if I ask you some questions to learn more about your business?

Use question bank to identify needs or pains

“We only work with physical suppliers”

We are one of the few traders who are also physical suppliers. Are there any areas where that is of specific interest? Is time an issue working with so many different bunker suppliers / physicals?

Map the client’s bunkering locations and link with our physical areas. OWB is a global player who can cover the market and we are physical

‘I am simply not interested”

Is cost of bunkers not a concern to you? How large a percent of your costs are bunkers?

Identify pains to help establish areas we can assist to save money

Ack

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– “I

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and

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…”

Co

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de

– “S

o w

hat

you

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sayi

ng is

…”

4. MEET CL IENT

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OWB UNIQUE SELLING POINTS

+ OWB claim rate of 1.9% on 18 mill MT delivered in 2012 (Market average of 4–6% claims)

+ Quality Service Department • Swift claims resolution • Independent unit with technical expertise to work with suppliers

+ Own Technical Department • Market leaders in flowmeter standardization • Onsite technical assistance

+ Key Account Management program

+ Expanding relationships with high performance clients buying more on quality

+ Financial strength

+ Offering USD 3 billion in credit lines to clients

+ Credit and liability insurance

+ We are covered in case something goes wrong

+ Physical suppliers as well as traders

+ Owned barges with flowmeters

4. MEET CL IENT

29

5. MEET ING RECAP

CLIENT’S CHALLENGES IN BUNKER BUYING

To summarize meeting and client’s challenges in bunker buying, fill in visit recap in PPT:

C R E D I T

T E R M S & C O N D I T I O N S

PR I C E B E N C H M A R K

Key Contract Variables:

• Volume (spread)• Notice time• Port flexibility• Pricing date• Pricing Method• Payment Terms

Value Added Services:

• Claims• Quality• Suppliers• Cancelation fees• Avails• On Time• Technical performance• Info & documentation• Technical & operational

services

Advice:

• Volatility• Market development• Regulations• Cost management

Value added

Business Foundation Visit Recap

Credit

Terms & Conditions

Price benchmark

Value added services Visit Recap

Claims

Quality

Quantity

Suppliers

Cancellation fee

Avails

On time

Pre-fixing / Post-fixing

Technical services

Operational services

Mapping customer:

30

5. MEET ING RECAP

Key Contract Variables Visit Recap

Notice time

Pricing date

Quantity spread Volume

Port flexibility

Pricing method

Payment terms

Advices Visit Recap

Bunker market development / prices / volatility and market structure

Industry regulationsLow sulphur ( ECA )

Cost controlFuel procurement strategy

Account Manager:

31

5. MEET ING RECAP

CHAPTER III

Contract Offering Process

Solution Selling Process

34

DEFINITIONS

Key Contract Variables

Are elements in a contract, which can be modified up or down in order to match the customer’s risk and price

profile.

Value Added Services

Are elements in a contract which OWB can offer to the customer in order to add value to his business.

Advice

Is a service which can be provided to the customer to be viewed as a professional business partner improving

the customer’s knowledge of his bunker business.

Business Foundation

Is a pre-requisite for doing business with the customer

6. BUILD SOLUT ION

35

6. BUILD SOLUT ION

Ask yourself Commercial Risk Commercial Benefit

OWB has the option – what is the risk, what the benefit?

• No risk • Having the option allows us to adapt to each local market needs and therefore optimize our purchase on that basis

How to assess value of OWB having the option?

• Benchmark purchases and profit against an index depending on notice time and benefit from:· Number of suppliers available· Market structure

• Optimize on operations. Win-win for both OWB and the customer. Be able to measure our offers much more precisely depending not only on prices as such, but also on expected profit on notice time

Client has the option – what is the risk, what the benefit?

• If the client notice time does not match our best scenario we may have operational challenges (physical) or less suppliers able to offer (trading), thus lower margin

• It increases the clients’ satisfaction as they feel to be offered a tailor-made solution. The client feels important

How to assess costs of client having the option?

• Benchmark your own trades depending on notice time and calculate the difference in profit

• Assessing the cost is an excellent tool to change the notice time option from the client to us, by showing him how much he can save

BALANCING THE COMMERCIAL RISK

NOTICE TIME

PRICING DATE



• No risk • Optimize profit (timing)


• Market structure• Contract period



• Miss out on timing as they don’t have enough market knowledge

• Flexibility• If sufficient knowledge,

he can play the market




36

VOLUME (SPREAD)



• No risk • Risk Management optimizes• Price volatility• Better logistic planning• Credit control


• No risk • Close cooperation with · End supplier · Risk Management Dept. · Credit – We control credit risk · Regional Manager


• Price volatility• Operational planning constitutes challenge

• Goodwill creation on flexibility


• Risk Management• Credit• Physical supplier

• Physical supply/barge• Customer input – optimize• Possible lot size – fleet size• Post-price optimize

PORT FLEXIBILITY



• Zone-pricing impacts profitability• No back-to-back

• Benefit – optimization of buying + operation

• Flexibility on credit use with suppliers

• Overcome availability issues• Buying power on OWB

Group level in a port


• Lack of volume commitment in a port • Budgeting the risk• Evaluation of overall profit ability


• Zone-pricing, higher priced ports chosen• Compensation offers• Avails/operational issues

• OWB perceived as more competitive and professional

• Market mechanism in port changes


• Uncalculated risk of profitability • Volume leverage / buying power

6. BUILD SOLUT ION

37

PRICING METHOD



• There is a risk if we buy and sell on different indexes (BW/Cargo) or pricing methods (spot/floating)

• Take advantage from market structure


• Benchmark purchases and sales prices against the corresponding BW/Cargo index

• Risk: Correlation between market prices and BW/Cargo indexes may fluctuate

• More competitive• Optimize your profit• Flexibility


• Correlation between market prices and BW/Cargo indexes may fluctuate

• Will not follow dumping price situations

• Secures a competitive price during the whole contract period


• Benchmark sales prices against the corresponding BW/Cargo index

• Risk: Correlation between market prices and BW/Cargo indexes may fluctuate

• More liquid and transparent price structure

• Control your costs• No risk from price fluctuation

PAYMENT TERMS



• Offering different terms than competition• Liquidity problem for the client• Not flexible offer – not commercial

• Improved cash flow• Secured payments• Opportunity costs (can utilize

the money elsewhere)• Discounted prices from suppliers

against early payment


• Less business/being unfavourable• Loss of market share• Non-competitive

• OWB has avg. USD 5 margin or 5 days utilisation. Therefore early payments will be utilised min. to that.


• Reduced cash flow/liquidity• Increased payment risk• Financing customer operation

increases commercial risk• No supplier will support us

for extra credit days

• Clients are willing to pay extra margin

• Less competitors in the market• Increased profit


• Investment costs us 4% int.• Opportunity cost that evaluates

min. to OWB average• Potential losses from bad debts

• Customers are usually buying higher than USD 5 average in order to get extra days

• Majority of high profit deals come from extra days payments

6. BUILD SOLUT ION

Front Page(Title)

World map of needs

Bunker SolutionOverview – Key

Contract Variables

What’s in for me?Overview of benefits

to the client

Goal of presentation

Client’s bunkerbuying challenges

and targets

Key Variable 1Why, What, How, If

Next Steps

Content overview

Tender specs

Key Variable 2Why, What, How, If

OWB Payoff

Reference case

Fleet and routes

Key Variable 3Why,What, How, If

10 Reasons tochoose OWB

GetAttention

Exploreneeds

Sell thesolution

Get thebusiness

38

PREPARE YOUR SOLUTIONEnsure quality in your presentation by

• Remember your goal: To give the client a thorough basis for making strategic bunker buying decisions regarding the contract you are aiming for. And promoting OWB as the right partner and future supplier

• Use Solution Selling Contract Template, latest version

• Visualize your ideas. Include photos of client’s logo, vessels, routes, maps

• Comply with OWB Design Manual

• Use OWB Icons available in CRM Library

• Have a colleague proof-read your material

• Involve your Solution Seller and Global Sales Consultant for feedback

• Bring a printed, coloured copy to client meeting

• If sending PPT to client, remember to PDF it

THE STRUCTURE OF THE TEMPLATE

6. BUILD SOLUT ION

39

CONTENT OVERVIEW

THE SOLUTION

6. BUILD SOLUT ION

Customer solution in Rotterdam

Supply in Rotterdam

Fuel oil supplyOWB’s

barge "Valsinni"

Alternative supply:Third party supplier

meeting OWB standards

Alternative supply in other

European ports

OWB’sworldwide trading team

in Geneva

Gas oil supplyThird party supplier mentioned earlier

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1 Client's bunker needs a) Product b) Ports c) Routes d) Specifics

2 Bunker buying targets

3 Tender materials and important specifications

4 OWB solution overview a) Pricing · On which index per contract, port, vessel · Which index do you suggest? b) Flexible elements · Volume spread · Nomination notice · Pricing method c) Discout opportunities · Volume incentives · Early payment incentives

5 Key solution elements a) Key element 1 (=USD x,xxx added value) b) Key element 2 (=USD x,xxx added value) c) Key element 3 (=USD x,xxx added value) d) Overview of benefits when selecting certain key elements (e.g. total added value = USD 9.95 PMT)

6 Extra benefits to client a) Technical Department b) Quality Support Department c) OW Tankers d) OW Supply e) OW Bunker Physical Supply

7 Next steps a) Decision process from today? b) When do we talk again? c) Do you need further information or documentation from OWB?

BUILD THE SOLUTION

6. BUILD SOLUT ION

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8 Additionals

a) Back-up your position through relevant reference cases, showing OWB as expert in that area, and experience with the client’s operational set-up, etc.

b) Map your client’s bunker needs on world map

c) Map your client’s fleet and routes in focus

d) Underline OWB’s global presence on world map

e) Underline our expertise (10 good reasons to choose OWB). Review Group presentation for other pertinent facts/charts

f) Remember to base your presentation upon input from client after receiving the inquiry. Highlight what the client wants to achieve – or avoid

g) OWB fleet / double-hulled barges, pumping rate, experienced crew, computerized blenders, electronic viscometers

h) Coriolis Mass Flow Meter

i) Post-fixing service · Daily pre-arrival updates · Statement of facts within 12 hrs after end of supply operation: alongside vessel, hoses connected, pumping start and end, end of operation), · Electronic BDR within 24 hrs after end of supply operation

j) Compliance with ISO 8217:2010 standards

k) Lubes

l) Use PPTs corresponding to our factsheets

m) Present OWB films (ARA, HighSeas)

n) Employers (OWB’s) liability insurance

o) List your attached documents (including date and version number)

p) Bring along give-aways

q) Consider also client study trip, for promising clients (involve Global Sales and KAM)

r) Be inspired for supplementary slides, all accessible via CRM Library/Global Sales Handbook

6. BUILD SOLUT ION

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VALUE ADDED SERVICESVALUE-ADDED SERVICES: TOTAL 3,582,500 USD YEARLY

PROFESSIONAL CLAIMS HANDLING THROUGH QSDCLAIMS PROCEDURE – DELAYS

6. BUILD SOLUT ION

Day of Nomination

Delivery XXX issue a letter of protest for

delays

Daily check with vessel agent on ETA!

Final confirmation of Vessel’s ETA with agent on actual day.

OWB sends XXX statement of fact within 24hours of delivery. Active communication with XXX on any issues encountered.

OWB investigates the delay claim through barge’s log and SOF.

Additional information may be requested from XXX�s vessels.

If delay arise from OWB�s supply, OWB will compensate XXX US$500/hour for each hour of delay up to a maximum of US $10,000 per delay.

Added Value

30 Days Credit Term

Access to OWB Risk Management

Quantity Savings using DNV in ARA

Quality Assurance:max. claim rate

of 1.9%

Bunkers on time

Actions • OWB will establish a credit line of 25 mill USD with a 30 days credit term for ARA

• Implement yearly review meetings with XXX’s Finance dept and OWB’s Credit department

• Pre-agreed monthly and quarterly market updates on fuel oil market

• Input and consultancy on building hedging strategies

• OWB and XXX will commit to DNV survey on barge measurements as final and binding for all deliveries

• OWB to pay US$500 per DNV survey

• Global claim rate evalu-ated to be 4–6% within the bunker industry

• OWB will guarantee 1.9% max claim rate

• Implement global post fixing services

• Alliance with global agency

• OWB will commit to timely bunkering

• Any delay on XXX’s vessels caused by OWB’s supply will be compensated with 500 USD/hour, max 10,000 USD per delay

Outcome • XXX will get increased flexibility in procurement of up to 38,000 MT of bunkers monthly on 30 days credit in ARA (vs. 21 days or less by other suppliers)

• Minimum savings • [(30,000MT x $625 x 9 days x 4%) /30 days] x 12 months

• Dedicated team from OWB Risk Management to ensu-re close link from physical bunkers to hedging of total bunker exposure

• Minimum value to XXX • 30,000MT x $0.50/MT x 12 months

• DNV report on all supplies with clear overview of OWB per-formance and quantity during delivery

• Minimum Savings • 0.25% saved x 30,000MT x 12 months x $625

• XXX will have a partner which not only tries to provide high quality ser-vices, bt will guarantee the performance

• OWB will pay 0.25USD /MT of the quarter’s volume should quarterly claims exceed 1.9% • 1.9% x 30,000MT x 12 months

• XXX gets added assu-rance that ist vessels will not be delayed by OWB’s supply

• Any delays are com-pensated (assuming maximum 100 hours per year) • 100 x $500

Yearly USD Value creation for XXX

• 2,700,000 USD Optimization of bunker hedging • 180,000 USD

• 562,500 USD • 90,000 USD • 50,000 USD

OWB will meet XXX to resolve all disputes:1.Claims below US$20,000 shall be resolved within 5

business days2.Claims below US$50,000 shall be resolved within 10

business days3.Larger claims shall be resolved within 15 business

days.

1. Stock movement data on barge2. Barge’s certificate of quantity3. Quantity surveyor’s report4. XXX’s vessel engine logs

For the first quarter, OWB willmeet with XXX team for updates andfeedback on a monthly basis.Subsequently, we will meet quarterly.

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QUALITY DISPUTESCLAIMS PROCEDURE – QUALITY DISPUTES

CLAIMS PROCEDURE – QUANTITY DISPUTES

QUANTITY DISPUTES

6. BUILD SOLUT ION

Step 1:XXX issues a letter of protest to OWB.How to agree whether there is a shortage in supply?:• XXX shall appoint DNV

surveyors and agree that barge measurements shall be final and binding.

• OWB offers to pay US$500 per DNV survey to XXX for each stem.

Step 2:Active communication between OWB traders, OWB Global Sales and XXX buyers:Exchange of information on investigation results and findings;Timely discussions with top management to resolve issues

Step 3:Possible resolutions to disputes:1. Agreement that there is no material shortage based on DNV survey findings;2. Compensation based on actual volume shortage3. Supply top-up at the next convenient port of call at best possible price

OWB and XXX to agree on testing lab (DNV in Rotterdam and Inspectorate in Antwerp) and the costs involved.XXX and OWB shall agree that:• lab results (basis ISO

8217:2005 Specs) shall be final and binding

• marginal deficiencies without risks to vessel, engines or crew shall be acceptable.

Invite customer to observe the breaking of sample seal at lab

XXX’s vessels issues a letter of protest on quality / density to OWB

Lab results in favour of OWBConclude the discussion. OWB will continue to deliver our best quality service to XXX

Lab results in favour of XXXCompensation shall depend on the extent of quality deferential(OWB’s Quality Service Department will assist with the claims in the most professional manner)

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CLAIMS PROCEDURE - QUANTITY DISPUTESWhen shortage is suspected, these are the steps taken by:

BARGE OFFICER

a) Re-check reference heights and tank gauging of all cargo and non-cargo tanks of bunker trader

b) Re-check all physical measurements against the tank calibration tables (TCT) of bunker tanker

c) Re-check all calculations and figures used for quantity determination onboard bunker tanker

d) Confirm no modification to all relevant tanks and lines

e) Examine the stock movements in the bunker tanker's stock movement logbook related to the bunker delivery

f) Investigate and determine the pipeline content of the bunker tanker including any possible leakage points

g) Examine the test certificate of quantity or equivalent document and surveyor's bunker tanker's measurement reports

VESSEL CHIEF ENGINEER

a) Re-check reference heights and tank gauging of all bunker tanks of vessel

b) Re-check all physical measurements against the tank calibration tables (TCT) of vessel

c) Re-check all calculations and figures used for quantity determination onboard vessel

d) Confirm no modification to all relevant tanks and lines

e) Examine the relevant pages of the vessel's engine logbook and onboard records

f) Investigate and determine the pipeline content of the vessel including any possible leakage points

g) Inspect the stock movements in the bunker tanker's stock movement logbook related to the bunker delivery

h) Request and obtain photocopy of the relevant pages of the bunker tanker's TCT for reference

i) Examine and request for photocopy of last certificate of quantity or equivalent document and surveyor's bunker tanker measurement reports.

6. BUILD SOLUT ION

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CLAIMS QUALITY ASSURANCEGlobal claim rate is estimated to be 4–6% within the bunker industry

USD 0.25/MT Compensation

1.9% Maximum Claim Rate Assurance

OW BUNKER QUALITY GUARANTEE

6. BUILD SOLUT ION

OWB Quality Assurance:

OWB guarantees that all products supplied will meet with ISO 8217:2005 standards of quality

The pre-testing procedure is optional and has to be agreed up front

Loading DeliveryOWB always checks in-tank quality products prior loading

The quality of the products loaded will be analyzed by an independant inspector

Copy of test results will be sent to customer

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7. PRESENT SOLUT ION

ALL AT A GLANCE – CONFER ENTIRE PPT WITH CONTRACT PROPOSAL FOR CLIENT

NON-LINE TRAFFIC VESSELS (01/04/2012 – 30/03/2013)

Rotterdam / Europoort

Vessels:„Donald Duck“ „Miss Piggy“ „Lucky Luke“ „Dumbo“

„Bambi“ „Peter Pan“ „Captain Hook“

Product(s):

RMG 180 (1.0%) RME 320 (1.0%) RMG 380 (1.0%)

DMA (0.1%)

Price Index:1% FOB Barges Rotterdam High <PUAP00>

0.1% DMA Barges Rotterdamm High <AAYWT00>

Prices $/MT:

Pricing Index + Premium RME 180: + 25.00 USD RMG 320: +12.50 USD RMG 380: +5.50 USD DMA 0.1%: +3.75 USD

Nomination: 8 days prior to supply

Pricing: „Average previous month“

Delivered by: Barge

Payment: Delivery date plus 30 days

Terms: OWB General Terms

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8. NEGOT IATE CONTR ACT & SEE INQURIES

KNOW YOUR OPTIONS TO NEGOTIATEa) Don’t accept “no” as answer, if not a contract can't be won, then possibly spot business

b) See the bigger picture and explore any possibility to negotiate the various parameters, to meet the client’s expectations and fix the deal

EXAMPLES OF VARIABLES IN NEGOTIATING CONTRACT

Parameter In OWB’s favour In client’s favour

PRICE High Low

PAYMENT TERMS On delivery 30 days

NOMINATION NOTICE Long Short

MINIMUM SIZE OF DELIVERY Large Small

DURATION OF CONTRACT PERIOD Long term Short term

RANGE OF PRODUCTS ON CONTRACT All products One product

COST OF SURVEYOR Customer’s account OWB’s account

PREFERENCES FOR SOURCING Our choice Customer’s choice

COMPENSATION FOR LATE DELIVERY Nothing Full

COMPENSATION FOR RIGHTFUL CLAIMS Nothing Full

TERMS & CONDITIONS Standard Negotiated

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FIX CONTRACT - FIX STEMS

1 Use streamlined template for Bunker Supply Contract

2 Should the client insist on wording different to our regular contract template, ensure to get approval from our Legal Department

3 Agree on OWB’s Terms & Conditions

4 Ensure that each party receives duly signed original of the contract (this implies that each party involved signs the document, and more than 1 original is required)

5 Comply with OWB’s policy for filing contracts

6 State full-style company name and address of all parties involved

7 Insert date

COMPLY WITH CONTRACT SIGNING PROCESS

1 Legal Department owns standard contract template

2 Legal Department must approve all changes to standard contract / standard terms and conditions

3 Branch Manager signs contract

4 Send to customer via email

5 Original sent in 2 copies via mail with return envelope

6 Get confirmation of receipt

7 Follow up on getting original signed after 14 days (task of account manager)

8 Questions to be answered:

9 Limits for who can sign? (a la credit line approval limits)

10 Paper version or digital contracts?

11 Legal entity of OWB?

9. S IGN CONTR ACT & F IX STEMS

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REMEMBER TO COVER ALL RELEVANT CLAUSES

1 Background information

2 Application of General Terms & Conditions

3 Product, volume and delivery port

4 Price

5 Delivery period

6 Nomination notice

7 Credit

8 Seller’s and Buyer’s absolute obligations

9 Payment

10 Material Breach and termination of the contract

11 Assignment

12 Confidentiality

13 Amendments

14 Miscellaneous

15 Supplements

16 Contact persons

17 SIGNATURE

18 Exhibits

9. S IGN CONTR ACT & F IX STEMS

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OWB SOLUTION SELLING Guide

Documents

Transcript of OWB SOLUTION SELLING Guide