Introduction
Rotterdam, one of Europe’s busiest energy ports, plays a crucial role in global jet fuel logistics. With its strategic location, robust infrastructure, and highly regulated environment, it serves as a prime hub for Jet A1 fuel trade. Among various procurement models, the “Dip and Pay” method has emerged as a secure and transparent transaction system favored by serious buyers.
This article outlines the Dip and Pay process for Jet A1 fuel transactions in Rotterdam and highlights key considerations for buyers.
What is the Dip and Pay Model?
“Dip and Pay” is a fuel trading model that allows buyers to verify the existence, quality, and quantity of the product in a bonded tank before making payment. Unlike CIF or TTT (Tank-to-Tank) deals, this model offers higher buyer protection and significantly reduces fraud risks.
Standard Procedure in Rotterdam
Below is a structured overview of the Dip and Pay process used by jet fuel buyers at Rotterdam port:
| Step | Description |
|---|---|
| 1. ICPO Submission | Buyer issues Irrevocable Corporate Purchase Order with full company details. |
| 2. TSA Agreement | Buyer signs a Tank Storage Agreement (TSA) with a bonded terminal. |
| 3. Commercial Invoice | Seller issues a proforma invoice outlining the quantity and price. |
| 4. Injection to Tank | Seller injects Jet A1 into the designated storage tank at the terminal. |
| 5. Dip Test Authorization | Buyer assigns an independent SGS or Saybolt surveyor. |
| 6. Quality & Quantity Inspection | Surveyor performs dip test to confirm fuel specs. |
| 7. Payment Execution | If test passes, buyer immediately pays via MT103 or TT. |
| 8. Title Transfer & Lift | Title of the product is transferred and lifting is authorized. |
Why Dip and Pay Is Preferred in Jet Fuel Transactions
1. Transparency
Since the product is tested before any payment is made, the buyer is fully aware of what is being purchased.
2. Mitigated Risk
There is no advance payment or financial exposure unless the product passes independent verification.
3. Speed
The process, once aligned, is extremely efficient—often completed within a few business days.
Legal and Logistical Requirements
- Tank Storage Agreement (TSA): Must be signed before injection. Terminals such as Vopak, Koole, and EuroTank are commonly used in Rotterdam.
- Surveyor Authorization: Only internationally accredited inspection companies (SGS, Saybolt, Intertek) should conduct dip testing.
- Secure Payment Channel: Preferably via MT103, secured and trackable.
Common Pitfalls and Buyer Warnings
- Unverified Tank Farms: Scams often originate from fake tank farms. Buyers should independently verify terminal codes and injection reports. Jet Fuel Buyers
- Time-Sensitive Operations: Any delay in payment after a successful dip test can lead to storage penalties or cancellation.
- Incomplete Documentation: Absence of Q&Q certificates or signed CI leads to contractual disputes.
Technical Excellence & Final Note
The Dip and Pay method, when executed properly, provides a transparent, secure, and verifiable means of procuring Jet A1 fuel in one of the world’s most controlled ports. ATABAŞ GRUP strongly recommends working only with licensed operators, conducting enhanced due diligence, and using well-drafted legal contracts.