• Why do we need this amount of paper?

    Chapter 3 - Cotton marketing - Electronic paperwork 

    The vast majority of internationally traded cotton still requires paper documentation. Concluding the purchase or sale transaction in the first place may be conducted by telephone, fax, e-mail, electronic trading platforms or even in person, but such agreements have to be documented in writing. With cotton being a globally traded and transported commodity, each country has its own formalities that require compliance in order to import, ship, rail or truck, and export.

    Take a bird’s eye view of a typical transaction. Imagine we have 500 tons of Malawi cotton purchased from a local Malawi ginner. This ginner has sold its cotton via a European merchant, who in turn has sold to a Chinese buyer in Shanghai. Ignoring for the time being the specific documents required at this stage, let us review the movement of the physical goods required:

    Day 1 – Cotton is loaded in Malawi on to trucks at the ginner’s warehouse.

    Day 2 – Trucks depart Malawi with instructions to drive to South Africa.

    Day 3 – Trucks arrive at the border between Malawi and Mozambique. Customs inspection and clearance is required into Mozambique.

    Day 4 – Trucks arrive at the border between Mozambique and Zimbabwe. Customs inspection and clearance is required into Zimbabwe.

    Day 8 – Trucks arrive at the border between Zimbabwe and South Africa. Again, customs inspection and clearance is required to bring goods into South Africa.

    Day 9 – Truck arrives at bonded warehouse in Johannesburg for unloading.

    Day 10 – 500 tons of cotton stuffed into 40 foot shipping line containers for transport to seaport.

    Day 11 – Containers loaded on to rail cars in Johannesburg for rail movement to Durban.

    Day 12 – Containers arrive at the port of Durban and moved into stacks ready for ocean vessel to berth.

    Day 14 – Vessel calls at port to load containers on board.

    Day 15 – Vessel sails from South Africa.

    Day 22 – Vessel calls at transshipment port of Singapore to transship containers on to feeder vessel calling at Chinese ports.

    Day 24 – Feeder vessel collects containers at Singapore and sails to Shanghai.

    Day 26 – Vessel arrives in Shanghai and unloads goods.

    Day 27 – Receiver clears containers from the port authority and trucks full containers to its interior warehouse.

    Day 28 – Containers arrive at interior warehouse and cotton is unstuffed.

    Day 29 – Empty containers returned to shipping line.

    Every one of the above processes requires some form of document to allow the movement of goods to continue to its next stage. It is easy to appreciate that, having to deal with paper documentation, and with the number of borders and customs formalities to comply with, complexities and delays are all too often experienced by seller and buyer.

    It is therefore highly appealing to implement electronic paperwork to ease the flow of goods. 
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    Cotton Exporter's Guide

    Brochure - African cotton promotion
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