The Coffee Exporter's Guide - International Trade Centre

the warehouse and the agency supervising weighing
and stuffi ng. The foregoing presupposes that all of those
involved, including customs, have updated their electronic
back-offi ce systems using data obtained from a web
interface or using their own document management
software.
Bill of lading. Using details from the booking and
document instructions received earlier, the carrier issues an
electronic bill of lading and registers it under the network title
registry for release to the exporter. The exporter is notifi ed
through the system and will endorse the bill of lading to the
appropriate party, usually the bank that fi nanced the goods,
which is then registered as pledgee on the bill of lading.
Alternatively, the bill of lading can also be issued directly in
a bank’s favour.
Shipment advice. This is sent via the network using the
XML standard for electronic shipping advices.
Dispatch. The exporter combines the commercial invoice
with the other export documents received from the different
service providers and authorities and packages these into
a network message that the network forwards to either the
buyer or the bank.
Verifi cation. The documents are verifi ed electronically with
the instructions registered under the L/C undertaking. If
there is any discrepancy the system notifi es all parties and
asks for refusal or acceptance of the documents.
Presentation of documents. If the documents are
correct they are transmitted for inspection and/or approval
(as per the L/C protocol) to the importer’s bank or, in the
case of CAD (payment cash against documents on fi rst
presentation) directly in trust to the importer. When the
importer’s bank makes payment, the electronic documents
are released automatically to the importer. Alternatively, the
L/C opening bank, which was acting as pledgee on the bill
of lading, will endorse the bill of lading to the importer once
the electronic funds transfer has been confi rmed through
the SWIFT clearing system.
At the receiving end. Before or upon arrival of the vessel,
the carrier notifi es all concerned (importer, clearing agent,
Customs, inland roasting plant, etc.) of the vessel’s ETA,
followed by a notice of arrival, using XML. The importer
settles the freight, releases the bill of lading to the carrier
or shipping agency at the port of destination, and copies
the bill of lading together with the commercial invoice
to the clearing agent, all through the electronic network
system and all at the same time. Again, each party knows
instantaneously who said what to whom.
Final delivery. If the coffee is going to an inland roasting
plant, notifi cations of cargo arrival, sample orders and
delivery orders will pass electronically between the importer
and the roaster. If the roaster operates on a vendor managed
inventory basis then the importer will place the coffee either
at the roasting plant, or at an intermediate container station,
CHAPTER 6 – E-COMMERCE AND SUPPLY CHAIN MANAGEMENT 117
or in a warehouse or silo park pending fi nal delivery. All this
is done through network instructions to the clearing agents,
trucking company and warehousemen. Again, everyone
knows what is happening, and the roaster can see where
the coffee is.
Finally, the importer issues an XML invoice and delivery
order to the roaster, copied to the clearing agents, truckers
and warehousemen. Upon payment this delivery order acts
as transfer of title as per the conditions determined in the
ECF or GCA standard form contract.
END RESULT AND OUTLOOK FOR
‘PAPERLESS TRADE’
The foregoing is a realistic scenario of the execution of a
coffee contract from origin to delivery at the destination
market to a roaster. The example makes optimal use of
electronic means of transferring data without the need for
rekeying, as is also the case for example with ICE’s eCOPS.
All electronically issued data are reused through back-offi ce
integration, or through making the data available through
online service providers or e-marketplaces, facilitating
the trade or the services performed by different service
suppliers.
It appears to be a complicated process, but thanks to
electronic messaging, use of XML standards and secure
electronic transfer of title and fi nancial settlement, the
administrative handling is far less cumbersome than in the
paper environment. The effi ciencies realized will translate
into direct cost reductions and savings across the supply
chain. Equally important are the reduction in fi nance cycles
and the possible reduction in inventory cycles, easier
management, and improved cash fl ow.
For many exporters the business process described above
can take 15 to 25 days from shipment to receipt of payment
when executed through physical transmission of paper
documents. Using an electronic system, the transfer of
documents, transfer of title and fi nancial settlement can be
reduced to four days or less, depending on the complexity
of the business process and the state of preparedness in
the exporting country.
The use of back-offi ce systems, often linking multiple
locations within large companies, is increasingly widespread
and can be expected to continue growing as these make
the trade in coffee more effi cient, more secure and less
costly. However, electronic supply chain management is not
yet widely used in the coffee trade although it is expected
to grow. So far though, other than linkage with the futures
markets of New York and London, most systems are not
used for actual green coffee trading activities. More at, inter
alia, www.bolero.net, www.theice.com, www.coffeenetwork.
com, www.eximware.com, www.commoditiesOne.com,
www.iRely.com, www.ekaplus.com and www.essdocs.com.