Note... this is a dangerous area, be very careful to be very sure you know who you are dealing with. There are many supposedly credible organisations prowling the internet looking for Spot offers, to connect with their “Major” Buyers - most of them are very opportunistic and many of them are also non-performers and sometimes fakes. The trouble with a non-performer is that it not only reflects on them, it also reflects on you and your credibility in the market.
The likely hood of a Tier One major dealing in the secondary SPOT market is low .. so make sure you know who you are dealing with. If you are a seller representative, make sure you hear from the buyer...or their verified “AUTHORISED” representative.
So-called “trade desks” and/or “broker centres” which ask for POP upfront are usually trying to assign it to several majors in hope of trying to sell it. A typical approach from such groups is to ask for pay order from the Seller before they “process” the offer. I don’t walk into the trap of this trick anymore. A real seller will not give POP to anyone but the verified and qualified buyer. Note unless you are careful, you can spend 2-3 days going back and forward before you give up... and you will give up, because if there is a majors buyer involved , he or she is usually so remote from the people who are contacting you, they may as well be on another planet.
Note the most important thing about this business is due diligence .. make sure that you know who you are dealing with .... and 2 more things .. know what Platts is approximately (I know that it is hard, however you need to know what the market is doing) - so when you get an offer with procedures or pricing or both that looks too good to be true ... they probably are. The last thing as a friend told me don't rely on Google only as your due diligence tool, not everything is on the web, and especially if a fake or non-performing buyer or seller is new... an alert may not be on the web as yet. Also another factor comes into this, there are so many non-performers out there, people who sign contracts they have not possible way to move to completion with ... sellers are just not interested in listing them. Currently I still list non-performers and all out fakes, such as my recent experience with a company called Tri-Petroleum (see previous blog entry).
Another general point - take note if you are more than one person away from the buyer mandate or the seller mandate and you are driving the deal... you need to get the people between you and the buyer or the seller step aside, so you can do a deal. Otherwise you are wasting your time.
As a mandate and principle representative myself I know, unless I can speak to the buyer or the buyer mandate I will not engage. I also will not waste my time talking to anyone else either who does not connect me promptly to a buyer or a seller --- also because of the over 1000 of deals I have been in.. less than 2% have any possibility of closing, in that event where you have a Ready Willing & Able (RWA) buyer and seller agreeing on procedures in the same deal.
However nothing will happen until the majors buyer and seller are connected, the Buyer (who MUST be a recognised “Major” - such as Shell, Exxon, Chevron etc... and on some occasions major airlines) proceeds / negotiates directly with the normal in-tank SPOT seller.
One last thing ... if someone approaches you saying that they are a representative of a major... verify it... see their documentation - and I would refer you to an extract of an email I had forwarded to me as below ;
A contact within the Department of Justice has stated their office in Washington and SEC in Washington has been getting large volumes of calls from Exxon, Chevron and Shell of groups of people misrepresenting themselves stating they are getting fuel requests from Exxon, Shell and Chevron.
If someone tells you they directly represent any of these companies and does not have directives from these companies, contracts or working directly with the allocation manager or purchasing which would include a 8(a) certification, DOT certification number, minority vendor number and their package approved by US (DOJ) after background check.........and you have a letter in hand from one of these companies stating you are on their list of vendors............that is real. None of these companies would farm out their work to brokers...that is against the law.
These offenses are serious now, they are fraud - if you claim such info or authority and do not have paperwork and one of these companies get your name and you claim a trade desk or you are getting fuel for them. These companies have made it loud and clear.........they will file charges against any broker who make false claims or send out emails stating they are getting fuel for them. If you are caught and send out emails claiming you are getting fuel for these companies or any company and do not have docs to prove it.........you can land yourself in jail and feds turning your life upside down.
These companies are now in the process of sending letters to all refineries and resellers stating if approached ask for the docs......if they can't provide them, call the feds or Interpol on that person at once.
So Ladies and Gentlemen ... be very careful, if you don't know, or aren't sure ... find out, otherwise you will get a reputation in the market as a serial referrer, who takes something from their in box and sends it out without verifying it ... and your credibility will be zero and no one will want to talk with you. For instance I will very rarely respond to such offers, and I will never respond to a sanitized offer for Oil or Gold