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The First Business Trip

November 8, 2016

Chapter 16 in the exclusive series for Dynamic Commodities- becoming a commodities trader

After I finally got a real job as a traffic clerk handling the antimony ore and concentrates desk, I bought myself a present. My first new car was a milestone, but to save money, I chose a Toyota Tercel with a standard transmission. On the delivery day, I got into my new car and drove out of the dealership, but there was a problem. I had never driven a stick-shift before in my life. I guided the bucking bronco onto the street stalling over and over again. The salesman who sold me the car was probably laughing himself silly as he watched.

A few weeks later, and after a great deal of driving practice, Al Ciapinna assigned me to travel two and one-half hours south of Manhattan to the Harshaw Chemical company to survey a shipment of Bolivian antimony ores and antimony trioxide. Al told me to make sure to wear gloves and a mask when extracting the antimony trioxide samples as the commodity is highly toxic. Antimony trioxide is used as a flame retardant in plastics, rubber, textiles and adhesives and is also required by glass and paint manufacturers.

The job of a traffic clerk is much more than paper shuffling and invoicing. The traders did the buying and selling, but the traffic clerk handled the transaction from soup to nuts. The trader was responsible for the terms. Some purchases and sales were on a CIF basis where the total price included the cost of the material as well as insurance and freight. Other deals were on a C&F basis that excluded insurance, and others were FOB or free on board. In a FOB deal, only the cost of the raw material was in the contract price, all other costs, and steps necessary to transport the goods had to be arranged by the traffic clerk. The devil was in the details for traffic clerks, as traders were masters at constructing deals where profits were often tucked away deep in the contract terms. Sometimes those terms were complicated so understanding the contract was of paramount importance.

When arranging for transport by ocean vessel, a traffic clerk needs to expertly account for the travel time from point A to B. If the shipping took longer than expected because of port delays or some other reason, the owner of the vessel needed compensation for their additional time. In the case of delays, a demurrage calculation provided that compensation. When a commodity arrived at port earlier than expected, a rebate was due, and a dispatch calculation accounted for the exact amount of the discount. All of these issues and more were the job of the traffic person who could add profits to the bottom line of a trade or cause a profit to disappear because of mistakes and miscalculations.

Another job of the traffic clerk was to make sure that the commodity purchase and sale adhered to the contract terms. When the trade was for material traveling to foreign ports the assistance of an agent or surveyor was required.  When the deal was local, the traffic clerk often traveled to the point of delivery to weigh, sample, and arrange for an assay or analysis of the material. My trip to Harshaw Chemical Plant in Gloucester City, New Jersey was to do just that. I was careful to listen to Al and put gloves and a mask on when I approached the material to take a small sample. The older worker at the plant helped me, but he did not take any precautions at all, using his bare hands to grab the material.

I drove back to NYC with the toxic samples tucked away safely in my trunk to go to the assaying company, Alex Stewart, the next day. I had prepared a complete report detailing the shipment which appeared to be in good order. I thought to myself that a day out of the office on a business trip was pretty cool and Al would be pleased with my performance. The trip to Harshaw was the first of what would be many business trips on behalf of Philipp Brothers.

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Post Series: Origin Of A Commodities Trader

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