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The objective of closing a large commodity deal does take a lot of effort to formally complete successfully to the contract closing stage. There is one more step after the contract has been sealed to realise a financial gain–delivery. The deal is deemed a success when the first delivery is completed. Until such occurs, the deal is subject to collapse. Breach of contract is a common occurrence, often instigated by the failure of the end buyer to abide by the contract. “One must no count their chickens until they are all in the coupe.”
PROCESS
The orthodox trading aspect
A Professional Commodity Trader (PCT) has to apply not just a routine to its position, it needs to also incorporate matters of trading “Psychology” to the whole process, and aspect not openly revealed in doctrine. The routine that must be observed is described as follows where the PCT abides by ICC incoterms delivery rules and ICC UCP DLC issuance rules. The collection aspect is applied as per ICC Uniform Collection Rules rules.These rules apply to favour the position of the PCT and also appeases any apprehension the end buyer or supplier may have about using such delivery and payment methods as these rules bear added security features.
Sourcing: The PCT sources a product alone or with a small attached group of ISS attached to the PCT in a string deal. The goods sought cannot be offered by another intermediary. The goods must be sourced from an export ready “supplier in possession of such goods.” This aspect cannot be changed in any form. The PCT must secure supply accordingly. The PCT uses in-house forms to do as much at first and may apply the lone trading position; and apply the orthodox aspect as demonstrated further below, later–once confidence levels begin to rise. The PCT trading alone will service the following routine, using very few in house type of documents once experience is gained.
The Quotation: The PCT prepares a quotation template: It uses this template to source goods from a supplier is possession of such goods which is ready to be exported; in other words, a person who has a coal mine, but needs funds to make the mine operational, is not offering export ready goods. This sort of association is more akin to creating an investment project. The immediate focus is on securing goods. A PCT must never approach end buyers unless goods have been secure prior–as secured directly from a supplier. Later when good trading experience is at hand, securing funding to make a mine operational is also an inherited part of the educational aspect to do with “investment projects” which is a business aspect that is able to be applied by the PCT as explained later. The immediate focus is to secure goods; do not deflect from this process. A quotation has no legally binding aspect. Knowing in advance that the PCT can only buy such goods, if it its able to sell such goods, to a sourced end buyer or client. The PCT is well aware that a quotation bearing a mere 7 days validity is unworkable. A quotation is sought bearing a 30 day validity period or more is preferred. Once a quotation is secured the PCT acting as a buyer is now reverting to the position of a seller. The PCT acting as a seller has up to 14 days to secure an end buyer. If the end buyer is secure within 14 days or less this is considered a goods event. In any case the seller may always return once only to the supplier to seek an extension of the validity date apparent on the quote.
The Offer: The PCT makes a master offer model. When completed, duplicates are made of the original template as needed. Goods are described, transactions codes as well as the important validity date are changed, in where the offers are sent out to sourced end buyers or standing clients directly. It does not matter if the offers sent out land in the hand of intermediaries as the offer must be accepted and signed by a fully disclosed end buyer. If the PCT does not know who the supplier or end buyer is there is no possibility of a transaction. The offer is a very detailed document. It describes clearly all matter of the goods being offered. If an end buyers signs the offer and returns it within the validity period, unless stated otherwise, the offer is legally binding.
The Contract: The seller advises a ‘non draft’ contract to its end buyer. Non draft contract is a type of contract that has very little room for changes to be made. Since the offer exposed all the main elements of a contract; the contract is a standard operational model to do with with ‘delivery ‘ of goods and not ‘arrival’ of goods. Our business is complete when goods are delivered ‘as ordered’ over the ships rails port of loading. The matter of shipping and carriage is only supervised by a PCT as it is not an integral part of our trading aspect. Adverse matters to do with oceans going goods is dealt with the ships charter party of which the end buyer is a party to. The BOL is secured by the end buyer on a FOB delivery mode unless the PCT is asked to secure the BOL at the end buyers added expense. A hardcopy of the contract must be signed and posted to the seller via courier mail. A copy of the contract is allowed to be sent by PDF via email on the condition a courier receipt and tracking advice is attached to show that the hardcopy has been posted. The PDF contract allows for the deal to ‘keep on moving’ without stalling.
Payment: Goods are paid for at time of delivery, port of loading in accordance with Incoterms used. Regardless of the payment mode; the sellers (PCT) bank obtains all the required transport documents marked on the documentary credit. If the credit is confirmed, the documents are checked by the advising bank of a PCT, payment is made to the suppliers bank within 5 banking days or less. If the credit is not confirmed, the advising bank of the PCT, collates all the required transport documents and advises such to the bank of the end buyer issuing the credit . If all is clear and ‘clean’ payments flows to the PCT and the suppliers bank again within a 5 days presentation period. This means obtaining a more costly confirmed credit, allows for the supplier to be paid more quickly. This is a crucial period for the PCT, who unlike undisciplined traders, the PCT must comply with a 21 days presentation period–If this security feature is not adhered with the payment instrument will become ‘stale’ ( more fees more delays).This is where the highly informed PCT applies a strict schedule to the whole process to ensure payments is presented cleanly.
Destination Port: Goods arrive. NOR is served. Demurrage cost may apply. Goods clear port on time or late. Freight is settled. Customs import taxes, tariffs, and wharfage handling chargers are paid. Logistic transport matters are booked by the end buyer. Goods arrive at end buyers place. The seller guarantees goods ‘as ordered’ were delivered. The term “as ordered” is specific; the term ‘defective’ is not . A shipload of ‘defective’ goods may have been purchased at a lower prices basis by an end buyer. However if goods arrive ‘as ordered’ and that defects are apparent which should not be present, the seller has to arrange to pay compensation to the end buyer.
TRADING SCHEDULE
The PCT must adhere to a routine and schedule
Let us assume today is the 10th September 2026
The goods in hand are secured by the PCT today for 30 days, for a deal that went smoothly without issues ( rare event)
(1) The highly experienced PCT is not going to bother with producing a quote as it is going to produce 3 offers for the secured goods, and present them as a PDF directly to three end buyers on a “first come first served basis.” This took the PCT all day to do .
Day 1: Offers are out to the end buyers.
Day 2: The PCT make an “Offer to Procure” and has it ready ( not sent yet) for the supplier to consider bearing a 7 days validity period from when it’s sent.
Day 3: The end buyers contract is created via a template and is kept ready.
Day 5: An end buyer is asking questions.The PCT remains firm and make no changes to the standing offer.
Day 12: The offer is returned as signed.The end buyer advised to book its carrier.
Day 13: Contract advised to end buyer as a PDF
Day 16: Email from end buyer confirms charter party event with carrier. (this is a very goods sign that the end buyer in now committed to the deal)
Day 23: Contract is returned from end buyer as signed via PDF email . A courier receipt is apparent as is a tracking number stating that the hardcopy of the contract was also posted.The deal moves forward on the PDF contract.
Day 23: Offer to Procure advised to the supplier with a 7 day validity and added clause on the offer stating “This offer is legally binding but subject to final contract. The supplier may not commence any aspect of loading operations until the contract is signed.”
Day 27: Supplier has accepted the OTP and returned it via email as a PDF attached to a PDF draft contract.
Day 29: A DLC has been advised to the account of the PCT ( 9th October 2026)
Day: 39 Ship arrives port of loading outer marker (19th October 2026) as per first delivery date 20th October 2026. NOR is advised. Ship berths 22nd October 2026. Wheat from Silo along side wharf commences loading operations .
Day 43: Ship drops first line and head towards destination port.
day 45 : Clean transport documents arrive at advising bank holding a confirmed credit.Supplier is paid within the 21 days DLC validity period where settlement takes 5 banking days to occur once all transport documents pass clean at sight examination.
Above is a clean cut operational aspect of a routine, which are rare events for such deals to occur so smoothly. The PCT has to be aware of so many traps, and must adhere to applying the doctrine in a strict manner without deflecting. The PCT will need a lot more effort to produce a schedules on a deal prone with delays. The key aspect to do with the validity of the DLC is very important and complex aspect to gain.
This is an educational website. DAVIDE GIOVANNI PAPA Trade expert and leading international best selling author, (ITSI) CATALOGUE: LIBRARY OF CONGRESS USA ISBN 9780566089343 / ISBN 9780566092237.The nature of advice is for intermediaries and matters of agency especially for those acting as a PCT ( buyers and sellers) worldwide . Suppliers and end buyers should contact us via our new trading website. This site is for educational services only. No trade deals permitted. FTNX is unable to advise or service inquiries from applicants located in countries bearing trade sanctions with Australia. Opinions served on this website are personally served by the author without prejudice. Davide Giovanni Papa offers no phone number no mailing address for our Bacchus Marsh or Melbourne City office . While all emails are read, replies may not be served. Matters of trade are located on another website - no service is available on our trading site to intermediaries or PCT’s. FTNX ITS Certificate only served to applicants who have taken our exam and attain a pass mark of 85 from 100 and Certificate can only be sent by hardcopy mail. As the creator of the doctrine ,ITS accreditation can only be served by the author. FTNX has no affiliation with ICC Paris France, but endorses the use of Delivery and DLC rules created by such an entity as a major part of the underlying doctrine. Members wanting to learn matters about such rules intently should purchase booklets from the ICC. Dishonourable people are selling pirated copies of our past outdated beta doctrine, A genuine current and supported FTN Exporting beta doctrine has a unique passcode to open and is served with a USCT logo and number registered with FTNX.The Author is also an inventor as such matters of doctrine and investment projects are also incorporated in the study . Investment projects as per the creation of such-by Entrepreneurs no investment funds are sought via such studies. FTNX Registered Inventions Certificates (FRIC) are legally defined type of privately issued patents that apply special conditions. Only certain types of license can be confirmed to service the application unlike a patent..Ideal for Entrepreneurs dealing internationally apply matters of the FTNX doctrine of trade where FTNX is supervising the license and any transaction occurring when an idea is sold.
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