The Ins and Outs of Traffic and Invoicing
PCCA’s Traffic and Invoicing department is an integral part of the cotton marketing process. With seven staff members and a combined 72 years of experience, the department is in charge of invoicing merchants and textile mills for all of the cotton sold by PCCA and overseeing the collection of payments with the assistance of PCCA’s Accounting department.
Sales made by PCCA’s marketing staff to merchants are processed each night on the cooperative’s Merchant Services System. The next morning, Traffic and Invoicing notifies the merchants regarding invoices for which payment is required. That same day, the merchants make arrangements to pay PCCA for the cotton they purchased. The merchants also may log on to the Merchant Services System to print invoices and download detailed bale records for the cotton on which they were invoiced.
The Traffic and Invoicing department also is responsible for shipping and invoicing the cotton sold to domestic and foreign textile mills. Arrangements must be planned and coordinated with cotton warehouses where the cotton is located and transportation providers (truck, rail, steamship lines) that will deliver cotton to the final destination. Additionally, the department’s staff must work closely with freight forwarders, port warehouses, USDA, international trade banks and insurance companies that provide services needed in the shipping process.
Delivery appointments are scheduled by PCCA with domestic textile mill customers. These appointments are scheduled during the contracted delivery period for just-in-time use by the mills.
“The invoices must be prepared and detailed bale records electronically transmitted to the textile mill customer prior to the shipment’s arrival at the mill’s facilities,” explains Rick Shepherd, Traffic and Invoicing manager.
Shepherd has worked at PCCA for 26 years with 15 of those as head of the Traffic and Invoicing department. Before that, he worked as TELCOT manager and as a field representative.
Most of PCCA’s export sales are shipped on letter-of-credit payment terms to protect the cooperative’s interests, and the cooperative’s export documentation staff review the letters of credit with the U.S. international trade bank that advised the credit to PCCA. If letter-of-credit amendments are needed, PCCA’s international agents are notified to convey the changes to the foreign textile mill customer. Once the amendments are received by the U.S. advising bank, PCCA proceeds with shipping arrangements and invoicing of cotton.
The department also negotiates freight rates and service contracts with truck, rail and steamship line transportation providers. Lonnie Winters, vice president of marketing for PCCA, says negotiating is a very important function of the Traffic and Invoicing department.
“When negotiating, every dime saved is a dime made for the producers,” Winters says. The Traffic and Invoicing staff also must be knowledgeable of various government export enhancement programs.
“Utilization of these government programs is essential to PCCA’s export sales and allows PCCA to be competitive in the world cotton markets,” Shepherd says.
This past summer, the department’s staff worked long hours to prepare documentation to ship more than 95,000 bales at a time when Step 2 payments were in force. The Traffic and Invoicing department has changed through the years, Shepherd says. It has gone from handling paper warehouse receipts to electronic warehouse receipts. Creation of The Seam, the decline of the domestic textile industry, and the growth of export sales also have affected the department. Export invoicing and shipping require hours of administrative time in planning and preparing the required documents. When the workload increases, so does staffing. To handle the record 2004 crop last season, an additional documentation specialist was added to the department, and a summer intern was hired.
“We have more than doubled our export sales from the 2004 to the 2005 marketing year,” Winters says. “Our focus has shifted from domestic to export markets, and we will keep making more improvements.” As the department moves forward, the staff must adapt to marketing trends that develop and work on areas that will improve their efficiency, Shepherd says.
“I’ve had the opportunity to work with traffic and invoicing departments at other companies for many years,” says PCCA President and CEO Wally Darneille. “Ours is the best I’ve ever seen.”
“This year (2005/06) will be a challenging one for Traffic and Invoicing with a large crop, trucking shortages and high fuel prices,” Shepherd adds. He also says the best thing about Traffic and Invoicing is the people he works with each day in his department as well as the teamwork with the entire PCCA staff.
“We take pride in getting the job done correctly and doing what it takes to get the job done for the member-owners of PCCA,” Shepherd concludes.
Numerous changes occurred at Plains Cotton Cooperative Association (PCCA) during 2004 including personnel, policies and member services. To introduce PCCA members to the cooperative’s staff and the services provided, Commentator will feature one department in each of the next several issues.