Pricing Alignment with Logistics

Purchase and Sales contracts consist of one or more contract delivery lines, each with one or more deliveries. Each contract delivery line has initially a quantity, a specification, a delivery period and pricing agreements. After the contract is created, it is executed (fulfilled or delivered). However, execution follows two partially independent processes:

Physical Delivery

Logistic processing of contract delivery lines can be seen as a time and materials schedule of what is to be moved from one party to another. The delivery quantity often gets split in parts to facilitate partial deliveries (contract deliveries). This can occur for various reasons, mostly related to the availability of the required cargo at different places and times.

Pricing

A contract can be priced, or pricing could be fixed using futures or other pricing structures. When not priced outright, the pricing agreements may also split the quantity in parts. This is due to partial pricings, at different times, or against different pricing periods. How the contract delivery line is split for pricing is mostly related to how traders assess price development on the market.

In Agiblocks, pricing is done on contract delivery line level, not at the contract level. This provides traders with the flexibility to price contracts to best fit delivery needs.