Transaction lifecycle
Most of this was not decided. It arrived.
A commodity transaction is not one decision. It is thirty or so, taken at different times by different people, most of them before the present team arrived. A counterparty’s template settled nine of them. A lender’s facility settled seven more. A warehouse’s standard procedure settled four. Each was reasonable on the day.
Together they decide how much cash the goods produce, who can move them, who absorbs a loss, and how long a mistake can exist before anybody is required to see it.
These are not the same as the classes. A class is what a record has to be able to express. A breakpoint is where a firm picked one of the settled ways of expressing it. The classes are the vocabulary; these are the sentences already written in it.
A lifecycle is a set of decision points, not a process diagram.
A facility is approved. Goods enter custody. A certificate is issued. Finance is drawn. A release is requested. A quantity changes. Twelve moments, in the order they happen.
At none of them is the decision made. Every one of them runs on something settled earlier, by somebody who is often no longer in the conversation.
- 01ContractWhat may happen at allSettled here, by whoever drafted the template
- 02ApprovalWhether this counterparty can carry itSettled once, at facility level
- 03NominationWhich parcel moves, and who may refuse itSettled at contract
- 04Custody intakeWhat entered, and who can now move itSettled by the custody regime
- 05InspectionWhich number becomes bindingSettled at contract, months earlier
- 06ValuationWhat the goods are worth to a lenderSettled by a credit committee you never meet
- 07AdvanceHow much cash the goods produceSettled before this cargo existed
- 08ReleaseWhether goods move without the financierSettled in the security package
- 09ChangeWhat happens when a fact is revisedSettled by the certificate validity rule, if there is one
- 10DeliveryWhere risk passesSettled by the delivery term, in the first paragraph
- 11SettlementWhich figures govern paymentSettled by quality finality and the payment trigger
- 12Claim or closeWhether a real loss is still recoverableSettled by the claim window, which nobody reads until it matters
In the copper trade on the landing page, a final dry weight revised from 10,000 to 9,900 tonnes moves the financeable quantity, the release allowance, the declared insurance basis and the final settlement. Four consequences, four parties, one correction. Each of the four was settled by a different decision in the tables below, and not one of them at the moment the weight changed.
What the contract fixed before anything moved
Nine of these are settled when the contract is signed, and they set the boundaries every later decision runs inside. A firm that inherits a template inherits all nine.
The 9, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Delivery term | FOB / CFR / CIF / DAP / ex-works | Where risk passes, and who insures which leg. |
| Pricing basis | Fixed / index formula / quotational period | When the price is knowable, and when the hedge can be placed. |
| Quotational period election | Seller’s option / buyer’s option / fixed | Who carries price risk between loading and settlement. |
| Weight basis | Shipped final / landed final / franchise with a claim window | Who carries in-transit loss, and whether a shortfall is claimable at all. |
| Quality specification | Contract grade / franchise / penalty scale / rejection limit | Whether an off-spec cargo is priced down or refused. |
| Quality finality | Mean within splitting limits / umpire from a named panel / one side conclusive if the other misses the exchange deadline | Which number settles the invoice, who pays for the umpire, and whether a sealed reserve sample exists at all. Without one there is no resolution path. |
| Title transfer | On payment / on delivery / on endorsement | Who owns the goods at the moment somebody fails. |
| Retained title | Present / absent | Whether a pledgee ranks behind a seller nobody can search for. |
| Governing law and forum | English / Swiss / GAFTA / FOSFA / ICC arbitration | Where a dispute lands, and how many months it takes. |
What the lender fixed, usually without being asked twice
Seven decisions that between them set how much cash the same goods produce. Most were made once, at facility level, and are never revisited transaction by transaction.
The 7, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Facility type | Transactional / borrowing base / receivables | What must be pledged, and when. |
| Security instrument | Pledge / assignment / trust receipt / floating charge | What the lender can enforce, and in which jurisdiction. |
| Custody regime | Own yard / collateral manager under a CMA / warranted | The advance rate, and who is able to release. |
| Advance rate and eligibility | By regime, with reserves, sub-limits and concentration caps | How much cash the same tonnes produce. |
| Borrowing base cadence | Daily / weekly / monthly, and the reporting lag | How stale the lender’s picture of the collateral is at any moment. |
| Insurance loss payee | Bank named / not named | Who is paid when the cargo is lost. |
| Payment instrument | Open account / documentary collection / letter of credit / standby | Whether a bank stands between the parties, and what it examines. |
Who produces the numbers everybody else relies on
Six decisions about evidence: who makes it, when it is binding, and how long it stays true. These are the ones most often left to whoever set them up first.
The 7, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Vessel or parcel nomination | Buyer approves / seller nominates freely / age, class and flag limits apply | Whether a buyer can refuse the ship before the goods move, and who carries the cost when it underperforms. |
| Inspector appointment | Seller nominates / buyer nominates / joint / from an agreed panel | Whose certificate the other parties are obliged to accept. |
| Inspection scope | At load / at discharge / both, with the sampling standard named | Which of the two numbers is the binding one. |
| Certificate validity | None stated / a fixed window / superseded on reissue | Whether a certificate that has been replaced can still authorise the next act. |
| Document set definition | What constitutes a complete set, and who decides | When payment becomes due, and what a discrepancy is. |
| Document type | Negotiable to order / straight / seawaybill | Whether title moves with the document or with the contract. |
| Document form | Paper / electronic under a recognised system | Who can hold it, how fast it travels, and whether possession is provable. Electronic trade documents have had the same effect as paper under English law since September 2023, and English law governs most bills in this trade. |
Where the goods and the paperwork stop agreeing
Three decisions that decide who absorbs a difference nobody caused. The first of them carries most of a products book.
The 3, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Insurance declaration | Per shipment / open cover with declaration / blanket | Whether a cargo is covered at the moment it moves. |
| Discharge against indemnity | Permitted / not permitted / bank-countersigned letter of indemnity | Most of a products book runs on this, because the ship arrives before the bill of lading does. |
| Outturn and loss allocation | Customary allowance / franchise / measured at both ends | Who absorbs the difference, and who is barred from claiming it. |
Who can move the goods, and what proves it afterwards
Four decisions that decide whether a release can be reconstructed six weeks later. They are the ones a lender examines first and a trader thinks about least.
The 4, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Release authority | Seller instructs / bank countersigns / manager acts on bank instruction only | Whether goods can move without the party financing them. |
| Release evidence | Warehouse’s own book / independent certificate / warrant surrender | Whether a release is provable after the fact, or only assertable. |
| Commingling | Segregated / fungible pool | Whose tonnes are whose when two claims meet the same pile. |
| Stock reconciliation | Continuous / periodic / on demand | How long a discrepancy can exist before anyone is required to see it. |
What happens on the day it does not go to plan
Five decisions nobody makes deliberately, because each is written for a day that has not happened. Two of them have deadlines that run whether or not anyone is counting.
The 5, and what each one turns on
| Breakpoint | The settled ways | What turns on it |
|---|---|---|
| Claim window | None / a fixed period from discharge / on the final invoice | Whether a real loss becomes unrecoverable through silence. |
| Dispute route | Negotiation / expert determination / umpire / arbitration | Months against years. |
| Default and cure | What triggers it, what cures it, and how long the cure period runs | Whether a technical breach becomes a called facility. |
| Sanctions screening | At onboarding / per transaction / continuous with vessel and ownership monitoring | Whether a cargo can move this week. Screening at onboarding alone misses a counterparty listed since, and a vessel is screened by IMO number and not by name. |
| Origin and compliance declaration | None / self-declared / verified to plot level with a filed statement | Whether the goods can enter the market at all. EUDR applies to large and medium operators from 30 December 2026: the operator placing goods on the EU market files the statement, and everyone downstream must hold and pass its reference number. |
Six or eight of these are live in any one firm.
Most of these are not independent switches. The delivery term, the custody regime and the payment instrument between them fix a dozen of the others by implication, which is why the list looks combinatorially enormous and is not.
In a given transaction perhaps six or eight are genuinely live: the ones where a different choice would change what the firm can do next quarter. Finding which six is most of the first stage, and it is not a question that can be answered from outside.
This is a list of where the decisions live, not a claim about your transaction. Every row is a choice somebody has already made on your behalf, and the useful question is which of them anybody in your firm could now name.