Almost immediately after the horrific and deadly collapse of the Key Bridge in Baltimore Harbor, maritime experts were in the news, speculating what might have caused Dali, the 685-foot container
ship, to suddenly lose power and crash into one of the bridge’s pillars. While it is way too early to know the cause, and a full investigation will certainly take months, I was surprised to hear
so many of the experts point to the same potential cause: “tainted” fuel.
Apparently, the maritime industry today has a big issue with “bunkering fraud.” Bunkering is
the term for refueling ships, and the industry has gone through a lot of changes over the past few decades. The composition of fuels has changed; the ships have gotten much bigger; the cost of fuel
relative to other shipping costs (labor, etc.) has grown dramatically; and the capacity to deliver fuel at a volume or quality not consistent with the anticipated purchase has gotten much easier, as
the number and type of intermediaries has increased. (You can learn more about it here in a very helpful piece from a plaintiff-oriented law
firm).
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From the piece, I learned about some of the forms that bunkering fraud can take:
- Delivering less fuel than promised
- Heating or aerating the fuel to increase its
perceived volume
- Conspiring with ship officer or crew to defraud the purchaser
- Buying the fuel at non-sanctioned places where it's easier to onboard and pass off smuggled or stolen
fuel
- Mixing water or chemicals into the fuel to then sell low-grade fuel at high-grade fuel prices
Sound familiar? I’m sure it does. I thought I was reading about the
digital ad business today, as in a report from the ANA, VAB, Adalytics or Augustine Fou on fraud in digital ads.
That’s what we get when players in our industry use digital automation,
black-box algorithms and a daisy chain of opaque intermediaries to commoditize the media business: It becomes like the oil business -- in the process, restructuring media suppliers, client-focused
agencies and tech and data-enabling firms as media trading companies and ancillaries to those traders, aligning value propositions around trading and margin participation, not the maximization of
customer creation value in marketers’ advertising investments.
If tainted fuel turns out to be the culprit for the Baltimore Harbor allision (what you call the event when one moving
object strikes an object fixed in place), I have some confidence that governments, regulators and shipping industry groups will take some steps toward reform. Not only did six bridge workers die, but
we will see tens of billions of consequential costs from the bridge’s collapse -- and a high likelihood of similar disasters in the future.
Meanwhile, many in the world of media, digital
ads and ad tech see fraud in our business as a “victimless crime.”
Digital ad fraud is not a victimless crime. First and foremost, companies spending hundreds of millions of
dollars are not getting the sales growth they paid for. That money is being stolen and people are losing jobs over it. The ANA has done a great job showing that advertising isn’t working nearly
as well as it used to.
And, whether we’re talking bots, made-for-advertising sites, web video ads labeled as CTV, undisclosed revenue shares, faux attribution or verification that
doesn’t verify, digital ad fraud siphons money away from legitimate content companies and real journalists. It suppresses real pricing. It supports money laundering. It enables national actors
to fight misinformation and disinformation wars against us.
Bunkering fraud and digital ad fraud are two peas in a pod. Who would have thought?