Introduction

In the intricate world of commodity trading, efficient and risk-managed "lifting" operations are as crucial as the trading strategies themselves. "Lifting" refers to the physical collection and transportation of commodities from their point of origin (e.g., mine, farm, oil well) to storage facilities or directly to end-users, involving a complex interplay of logistics, documentation, and regulatory compliance. Mastering Lifting Trading Best Practices is not merely about moving goods; it's about optimizing the entire supply chain to minimize costs, reduce transit times, ensure product quality, and mitigate the myriad of risks inherent in physical commodity movements. From securing transport and managing inventory to navigating international customs and financial settlements, every step requires precision and adherence to industry standards to maintain profitability and protect reputation. Without a deep understanding of Lifting Trading Best Practices, trading firms risk costly delays, cargo damage, legal disputes, and significant financial losses, underscoring the vital need for specialized expertise in this critical domain.

This comprehensive 10-day training course is meticulously designed to empower professionals involved in commodity trading, supply chain management, logistics, operations, finance, and legal departments with the theoretical understanding and practical skills necessary to implement and oversee Lifting Trading Best Practices. Participants will gain a comprehensive understanding of the entire physical commodity trading lifecycle, from pre-shipment planning and vessel nomination to discharge and final settlement. The course will delve into topics such as incoterms, charter party agreements, hedging physical exposure, quality and quantity control, demurrages and despatch, trade finance mechanisms, regulatory compliance, and the crucial aspects of leveraging technology for optimized lifting operations. By mastering the principles and practical application of Lifting Trading Best Practices, participants will be prepared to enhance operational efficiency, reduce financial exposure, ensure contractual adherence, and contribute significantly to the profitability and risk mitigation efforts of their trading organizations.

Duration: 10 Days

Target Audience

• Commodity Traders
• Physical Operations Managers
• Logistics and Shipping Managers
• Trade Finance Professionals
• Risk Managers
• Contract Administrators
• Legal and Compliance Officers
• Supply Chain Analysts
• Business Development Managers in Commodity Firms
• Professionals aspiring to careers in physical commodity trading

Objectives

• Understand the full lifecycle of physical commodity lifting and trading.
• Learn to interpret and apply International Commercial Terms (Incoterms) in trading contracts.
• Acquire skills in managing logistics, shipping, and transportation risks.
• Comprehend techniques for optimizing vessel nominations and charter party agreements.
• Explore strategies for effective quality and quantity control during lifting.
• Understand the importance of trade finance instruments in facilitating physical trades.
• Gain insights into mitigating demurrage and despatch costs.
• Develop a practical understanding of regulatory and compliance requirements in global trade.
• Enhance skills in managing counterparty and operational risks in physical trading.
• Learn to leverage technology for improved lifting operations and data management.
• Understand the interplay between physical and paper trading for hedging.
• Acquire best practices in document management and trade administration.
• Explore methods for post-deal analysis and continuous improvement.
• Develop a strategic approach to building resilient supply chains.
• Master the art of negotiation and dispute resolution in lifting operations.

Course Content

Module 1: Introduction to Physical Commodity Trading and Lifting

• Overview of global commodity markets: types of commodities (energy, metals, agriculture).
• The role of physical trading in the global economy.
• Definition of "lifting" in commodity trading context.
• Key participants in the physical commodity supply chain.
• The interrelationship between physical and financial trading.

Module 2: International Commercial Terms (Incoterms)

• Deep dive into Incoterms 2020: EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR, CIF.
• Understanding seller and buyer responsibilities, risks, and costs.
• Choosing the appropriate Incoterm for different commodity trades.
• Practical examples and common misunderstandings of Incoterms application.
• Impact of Incoterms on pricing and profit margins.

Module 3: Shipping and Logistics Management

• Types of vessels and their suitability for different commodities.
• Chartering vs. liner shipping: advantages and disadvantages.
• Understanding shipping routes, transit times, and port operations.
• Freight rates and factors influencing shipping costs.
• Logistics planning: optimizing multimodal transport solutions.

Module 4: Charter Party Agreements and Laytime/Demurrage

• Key clauses in a voyage charter party agreement.
• Understanding laytime calculations, notice of readiness (NOR), and statements of facts (SOF).
• Demurrage: causes, calculations, and strategies for minimization.
• Despatch: benefits and calculation.
• Negotiation tactics for charter party terms.

Module 5: Quality and Quantity Control

• Importance of independent inspection and surveying.
• Sampling procedures and analytical methods for commodity quality.
• Managing quantity determination: draft surveys, tank gauging, weighing.
• Quality and quantity clauses in sales and purchase agreements.
• Handling quality and quantity disputes.

Module 6: Trade Finance and Payment Mechanisms

• Overview of trade finance instruments: Letters of Credit (LCs), Documentary Collections.
• Understanding LCs: types, requirements, and common pitfalls.
• Bank guarantees and performance bonds in commodity trading.
• Pre-financing and post-financing options for physical trades.
• Managing currency risk in international trade.

Module 7: Hedging Physical Exposure

• The concept of hedging in commodity markets.
• Using futures and options contracts to hedge physical price risk.
• Basis risk management: understanding and mitigating.
• Developing a hedging strategy for a physical commodity portfolio.
• Practical exercises in hedging calculations and strategies.

Module 8: Trade Administration and Documentation

• Essential trade documents: Bill of Lading, Certificate of Origin, Insurance Certificate.
• Importance of accurate and timely documentation.
• Digitalization of trade documents and electronic platforms.
• Ensuring compliance with customs and trade regulations.
• Consequences of documentary discrepancies.

Module 9: Operational Risk Management in Lifting

• Identifying operational risks: loading/discharge delays, equipment failure, human error.
• Developing Standard Operating Procedures (SOPs) for lifting operations.
• Implementing safety protocols and environmental regulations.
• Business continuity planning for supply chain disruptions.
• Incident reporting and analysis for continuous improvement.

Module 10: Legal and Regulatory Compliance

• International trade laws and conventions relevant to commodity trading.
• Sanctions and embargoes: compliance requirements and implications.
• Anti-bribery and corruption regulations in global trade.
• Competition law considerations.
• Dispute resolution mechanisms: arbitration, litigation.

Module 11: Counterparty Risk and Due Diligence

• Assessing financial and operational health of trading counterparties.
• Credit risk assessment in physical commodity trading.
• Due diligence on new partners and suppliers.
• Monitoring counterparty performance and exposure.
• Mitigating counterparty default risk.

Module 12: Technology and Digitalization in Lifting and Trading

• Enterprise Resource Planning (ERP) systems for trade management.
• Trade and risk management (TRM) systems.
• Blockchain applications for trade finance and supply chain transparency.
• Data analytics for optimizing logistics and predicting market trends.
• Emerging technologies impacting physical commodity trading.

Module 13: Storage, Warehousing, and Inventory Management

• Types of storage facilities for various commodities (e.g., tanks, silos, warehouses).
• Inventory valuation methods and financial implications.
• Managing inventory levels: just-in-time, safety stock.
• Quality preservation during storage.
• Warehouse receipts and collateral management.

Module 14: Post-Deal Analysis and Performance Evaluation

• Calculating actual profit and loss for physical trades.
• Analyzing variances between budgeted and actual costs.
• Performance metrics for lifting operations (e.g., turnaround time, cost per ton).
• Post-mortem analysis of trade successes and failures.
• Benchmarking against industry best practices.

Module 15: Future Trends and Strategic Planning in Physical Trading

• Impact of climate change and sustainability on commodity supply chains.
• Decarbonization in shipping and logistics.
• Geopolitical influences on trade flows.
• The role of ethical sourcing and responsible supply chains.
• Developing a long-term strategic plan for physical commodity trading operations.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.