Barrel prices often get the headlines, dominating conversations every quarter. Beyond the big events, what often quietly compounds in measurement gaps, stretched invoice cycles and missed claims is often a controllable loss if given the right attention.
Here’s where we commonly see these costs accumulate:
1. The VEF is Only as Good as the Data Behind It
Few numbers carry more commercial weight in a custody transfer than a Vessel Experience Factor (VEF). It’s the first line of defense when measured volumes fall out of tolerance. Remember though, a benchmark is only as good as the data behind it.
Here’s a few ways data can get compromised without anyone noticing:
- Missing voyages affecting completeness
- Active voyages being included in calculations where they should not be
- Quantities rekeyed incorrectly
When one or a combination of the above exists, it has a direct influence on profits and losses. For example:
A vessel figure of 538,550 bbls is recorded against a shore figure of 541,377 bbls. Since the raw difference of 2,827 bbls falls outside of accepted tolerance, the next step is applying the VEF to the shore figure to determine the quantity.
With a VEF of 0.9961 — derived from an incomplete voyage log — the adjusted shore figure comes to 539,265 bbls. Compared to the vessel figure, the difference narrows to 715 bbls. At $90/bbl, that’s a settlement cost of $64,350.
Now, apply a VEF of 0.9932, reflecting a complete and accurate voyage log. The adjusted shore figure drops to 537,695 bbls — below the vessel figure. This reflects a more accurate representation of the quantity delivered. In this instance, the loss no longer sits with you, but now, the other party owes 855 bbls, or $76,950.
What appears as a minor VEF difference is capable of yielding a $141,300 swing in commercial outcome. Extrapolate this over time, and now the financial impacts are far more significant.
2. The Reconciliation Lag and the Stretched Invoicing Cycle
Manual and repetitive rework can lead to a lengthy reconciliation process, manifesting as:
- Late report submissions
- Missing context turning every query into an investigation
- Departmental deadlines that don’t align (ie. a Friday afternoon invoice batch that doesn’t get looked at until next week)
As a result, disputes can sit open for 30, 60, or even 90 days. That’s working capital tied up with no clear resolution timeline, and commercial relationships that absorb the friction.
Additionally, delays can happen for reasons beyond anyone’s control – for example, berth congestion, vessel crew availability, documentation arriving late. Without systematic visibility into where the delays are consistently originating, the pattern stays hidden, and the cycle continues stretching.
3. The Claim You Can’t Get A Status On
When a discrepancy enters a workflow with no central visibility, getting an answer means tracking down two people, finding the original email thread, and hoping the person who first raised it remembers the details.
When a time-sensitive process is distributed across fragmented tooling with no central visibility, investigations can get lost in a black hole.
Some claims are filed correctly and resolved. Some are filed late and are rejected on procedural grounds. Others never get filed at all because the process broke somewhere between the berth and the deadline. The loss gets quietly absorbed into a quarterly variance. Over time, these variances become the norm.
The Common Thread
These are problems the industry has lived with for a long time. The difference between now and then is what they cost. Oil at $90+ a barrel means every measurement gap, stretched invoice cycle, and missed claim carries a much heftier price tag than it did a year ago.
Reducing the time spent rebuilding and investigating what should already be on record has a real dollar value. In fact, on a 500,000 bbl cargo, cutting three days off the settlement cycle can save over $9000 in costs alone.
These issues above share the same root cause: the data isn’t getting to the right person in time.
This is exactly the gap that Navarik tools were designed to close.
Navarik VEF handles the legwork needed for producing an API 17.9 compliant VEF without manual overhead. For loss control teams already stretched across competing priorities, that’s time redirected toward analyzing the numbers instead of gathering them. A strong foundation for any cost control conversation.
On the reconciliation and claims side, Navarik Inspection centralizes a fragmented process. Documents are accessible, statuses are visible, and disputes become easier to resolve with all critical events tracked in one spot. The visibility helps signal where bottlenecks consistently occur and becomes the first step toward removing friction.
While the complexity of cargo operations doesn’t go away, the cost of navigating it without visibility does.
Get in touch with our team to see how Navarik Inspection and Navarik VEF can improve visibility across your operations.