From changes in the energy industry, where assets got into the hands of financial traders to become asset-backed traders, or where renewable energy has caused an increase in short-term and cross-border trading, to growth in physical trading across non-energy commodities to meet global demands, it has given rise to a need for integrated functionality to more efficiently manage the physical movement (also known as Scheduling) and logistics of the commodity. As a result, expect those looking for a solution to capture their trades, manage their positions and report their risk, to reach over and ask “C/ETRM: Can I get some Scheduling/Logistics with that?“
Support for physical delivery of the commodity has not been a focus for many legacy C/ETRM systems, i.e. they are essentially deal capture and risk reporting systems, with light or no support for settlement and invoicing. In all fairness, support for scheduling and logistics is not easy, and processes differ by commodity and geography. However, in order to improve operational efficiency and profitability in a more physical marketplace, traders recognize it requires an integrated and agile solution to automate their front-to-back processes including very robust logistics capability.
It doesn’t stop there, as ease of integration is a prerequisite as well. The reason being that movement and delivery from point of origin to point of destination may not just require the scheduling/logistics/actualization functionality, but also a communication interface with external systems, for example the messaging of submission and receipt, via communication protocols such as Excel, XML, EDI etc.
Regardless of commodity type, movement may mean from point of generation or storage and track delivery across all modes of transport – from transmission lines to pipelines, to road, ship, rail, and container. Values are coming from the purchase and sales deals captured in the C/ETRM system, which is therefore the source.
TRMTracker, Pioneer’s C/ETRM solution, provides robust scheduling and logistics functionality in what is called the ‘Scheduling Workbench’. The objective of Scheduling Workbench is to match Receipts and Deliveries (or Resources and Obligations) to form Shipments or a Schedule. Transport capacity can be captured in C/ETRM system. The matched deals then will be ready to actualize and settle. The line item(s) and shipment(s) can be split/unsplit, and receipts can be injected into storage or withdrawn from storage.
Automated workflows will benefit the organization by being able to provide alerts and notifications for position changes, breaches of limits, completion of processes, as well as auto-filling of internal and external documents, such as bills of lading, product specifications, and certificates of quality and compliance. Moreover, specifically in energy markets where trading happens closer to time of delivery, a live system that updates positions in near real-time is a must, and therefore the scheduling function benefits from being fully integrated with the C/ETRM system.
Whereas financial positions are typically being closed out with offsetting contracts, physical trades require the actual underlying commodity to be delivered at a specified date. Unlike many C/ETRM systems, Pioneer’s TRMTracker offers an integrated solution capable of supporting the full trading lifecycle and has next generation data integration tools to deliver communications interfaces as required. So yes, at Pioneer Solutions you can get some Scheduling / Logistics with your C/ETRM system!