logistic for commodity trading

MEET THE OPERATOR – The physical commodity trader shadow

MEET THE OPERATOR

An important step to become a physical commodity trader and an indispensable link in the logistic chain.

Once a trader closes a new contract the operator enters in scene to execute the contract. The operator is a kind of orchestra conductor, he coordinates the entire logistics operation to ensure a smooth delivery on time and cost efficient.

The operator is the nexus where all the information converges from your shipping dep, terminals, inspector, agents, seller, buyer, etc…   The operator also informs the trading desk about every piece of information that could be useful that they gather by speaking with the people on the ground. For instance, a cargo from a competitor has just been rejected or foresee a logistic bottle-neck due to harsh weather.

Little story about that, a friend of mine worked in a very aggressive mid-size commodity trading house. They owned a coal mine in a very exotic location with poor logistic assets. He needed trucks to move the coal from the mine to the port. I’m not familiar with coal trading but I guess you need a shitload of truck rotations to move 60’000mt of coal to embark on a handymax.

Their direct competitor knowing that a vessel was about to arrive AND the entire coal was not all at the terminal, they offered a lot more of money to the owner of the trucking company to move their cargo in priority. As the guy had a kind of monopoly on the truck deliveries of the region and it was impossible to force him to follow his previous agreement. Long story short, they suffered from costly delay in their loadings. All of that couldn’t be engineered if the operator was not up-to-date of the current stock situation at the terminal…!

As every company could have specifics demands for their operator positions, you will find below 4 opening descriptions for an operator’s position. It will give an idea about the main aspects of the job.

  • Manage all operations aspects: from the contract to the payment, including laytime and demurrage calculations.
  • Manage the contracting process (purchase, checks, amendments, invoices, etc).
  • Responsible for all the shipping aspects: ensure coordination and correspondence with vessels.
  • Handle the nomination, instruction and correspondence with inspectors & terminal suppliers.
  • Manage documentary credits and be in contact with Banks.

 

  • Managing Dry Bulk vessels and the operations
  • Coordinating the shipments with the different stakeholders (clients, transporters, traders)
  • Generating purchase orders and invoices
  • Preparing letters of credit
  • Settling and following-up demurrages

 

  •  Vessel chartering or container shipments in co-operation with the chartering department; organizing rail, truck and air transport or releasing of material in warehouse
  • Opening of and checking of L/Cs for our suppliers and receivers; requesting amendments and negotiating documents for collection of payment
  • Calculation of metal quantity and foreign currency amounts to be priced
  • Correspondence on availability of materials in production, transit and in stock; documentation, invoicing, outgoing and incoming payments, client exposure control and claim handling
  • Insuring risks of each transport as well as material in storage

 

  • Organizing and controlling bulk shipments, keeping contact with producers, customers, warehouses and agents
  • Document negotiation
  • Opening letters of credits
  • Vessel logistics from loading to discharge
  • Rail and truck logistics
  • Maintaining open communication with Traders ensuring execution of the contracts

 

Thanks for your time.

If you’ve liked the info about physical commodity trading,

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Damien W.

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