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Proposed
Standard of Operation
July 1999
1.
Overview
a) Background
The Association of American Warehouse Control Officials (AAWCO)
is creating a uniform Standard of Operation for the creation,
cancellation, inventory, safekeeping, historical archiving, and
auditing of state grain warehouse receipt documents in electronic
form. It is to be known as the AAWCO Electronic Warehouse Receipt
System (AEWRS). The data structure (revision 8) attached to this
document represents the most current technical revision. This
document has been garnered with input solicited by the special
subcommittee on EWR (see Appendix D) appointed by the President
in August of 1998 and is not yet in final form. The technical
standard is to be finalized by October 1, 2000.
b) Mission
The AAWCO Electronic Warehouse Receipt Standard (AEWRS) is
a Standard of Operation. The mission of AAWCO under the auspices
of AEWRS is to define, maintain, supervise, and periodic audit
the Standard of Operation to provide functional uniformity and
integrity for every electronic grain warehouse receipt issued
in the United States. The mission of AEWRS is not to
act as a Provider of services. The mission of AEWRS is not
to act as the warehousing authority or to exercise that authority
by proxy.
2.
Roles of the Participants
a) EWR
End-Users
The first and most important role is that of the end-users
who currently utilize grain warehouse receipts. This includes
producers, grain companies, cooperatives, lenders, and various
government programs and agencies. Implementing AEWRS will no doubt
require some change on the part of the participants and require
absolute support from all users to have a chance to succeed. It
is the goal of AAWCO to ensure that the benefits are put in place
to far outweigh the costs of AEWRS.
b) Regulatory
Agency as Authority
Regulatory Agency (RA) is defined as any governmental entity
which is named by grain warehousing legislation as authority over
a particular grain warehousing jurisdiction. When EWR's replace
(or augment) the existing paper system, the RA will continue to
retain all current authorities and responsibilities with regard
to their respective legislation, rules, regulations, audit procedures,
etc..
c) AEWRS
as the Standard of Operation
AEWRS is a protocol by which EWR’s issued upon grain
warehouses in differing jurisdictions can coexist within a single
data system. EWR’s from different states or the federal government
can exist side-by-side electronically, each type retaining its
own validity, integrity, and uniqueness. There is no obligation
on the part of any RA to adopt and utilize AEWRS in their jurisdiction.
On the contrary, it is the very purpose of AEWRS to provide 2
significant advantages to RA’s who adopt AEWRS:
1) Fulfill
each RA’s specific requirements for implementing EWR’s
in their jurisdiction with a minimum amount of staff time and
resources expended.
2)
Provide significant cost savings to the users in their jurisdiction
by combining the transaction volume from all RA’s.
If any RA
finds the AEWRS system is administered in such as way as to violate
state law or is otherwise infeasible, that RA is free to reject
AEWRS. RA’s are free, working with a Provider directly, to
create a unique Standard of Operation instead of AEWRS or choose
not to adopt any EWR Standard. Again, however, it is AAWCO’s
goal that RA’s will have a strong economic incentive to adopt
AEWRS in order to secure the lowest cost implementation and the
transaction fees for their end-users.
d) AAWCO
as registrar
While AAWCO is author of the AEWRS Standard of Operation,
the organization itself will also serve RA's in an administrative
capacity. The data structure in Appendix A calls for an ID system
for end-users. Therefore it is necessary, at a minimum, to maintain
a registry of: a) Warehousemen, b) EWR Holders and c) EWR Lienholders.
Identification numbers must be assigned to all EWR system participants
across all jurisdictions to efficiently facilitate AEWRS.
e) Providers
Providers, such as Intelligent Decisions, Inc. are
fiducial entities that operate computer and communications equipment,
software systems, data storage, and archive services to facilitate
EWR. Like RA’s, Providers will have an economic incentive
to implement the AEWRS Standard of Operation and thereby become
an "Approved Provider".
1)
The Standard of Operation is already defined and uniform minimizing
start-up costs.
2)
More transactions can be processed with a single system investment
as more users are served by it resulting in more profit per
transaction at any given transaction fee. Indeed, it could be
argued that Providers would find it cost-prohibitive to even
offer an EWR service to RA’s on a state-by-state basis.
Prospective
Providers will apply to AAWCO for approval as an AEWRS Provider.
This approval process insures that the AEWRS Standard of Operation
are fully deployed by the Provider and services are consistent
among Providers. An application will provide AAWCO with information
concerning the applicant's operational, safekeeping, and security
provisions. An on-site inspection by AAWCO representatives will
be required before approval
3.
Standard of Operation
a) Data
Record
The portion of the standard defines the EWR document. Appendix
A of this document displays Revision 8 of the Data Record. The
data record may be in comma delimited or fixed field form.
b) Change
Record
A change in status of an EWR requires a Change Record. Appendix
B of this Document displays Revision 8 of the Change Record. The
change record may be in delimited or fixed field format.
c) Transmission
Requirements
Outlined in Appendix C are the hardware/software protocols
necessary for sending either the data or change record to the
provider. It is the opinion the committee that transmission via
the World Wide Web is a cost-effective and potentially secure
method for providing EWR service. Historically, systems of this
type have utilized dial-up, point-to-point telephone connections
to transmit data.
d) User
Interface
i. AEWRS transactions can be facilitated
through client software provided to the Warehouseman by the Provider.
ii.
Grain software providers may integrate EWR functions of a Provider(s)
client software into their warehouseman customer's grain software
systems to eliminate duplicate entry. AAWCO favors this approach.
4.
Costs
a. Provider
Costs
Approved Providers (i.e. those approved as AEWRS compliant)
will be subject to an initial fee of $2000 payable to AAWCO. This
covers the costs to AAWCO of approving or certifying the Providers
implementation of AEWRS.
b. User
Costs
State grain warehouses in the participating states will have
the option to utilize the AAWCO EWR system for a Transaction cost
of approximately $1 per transaction. A small part of the Transaction
fee received by the Provider is to be returned to AAWCO for the
ongoing maintenance of the various registries.
Transaction
defined
i.
The creation and cancellation of an electronic warehouse receipt
is considered a single transaction.
ii.
The creation of an electronic warehouse receipt and subsequent
transfer to a paper warehouse receipt is considered a single
transaction.
iii.
The transaction cost is incurred and payable when an electronic
warehouse receipt is created.
iv.
The cost for cancellation or transfer to a paper receipt is
included in the transaction cost incurred when the EWR was created.
v.
A change transaction where the Receipt Status is coded "L" will
carry a transaction charge of $1 incurred and payable immediately.
5.
Legal Relationships
a. RA’s
and AAWCO
It is envisioned that no legal agreements between AAWCO and
RA’s are required. However, it is certainly necessary that
the RA have a legal agreement with the Provider(s) providing EWR
service in their jurisdiction. In that legal agreement would be
the requirement that the Provider adhere to the AEWRS Standard
of Operation.
b. RA’s
and Providers
A legal agreement may be required to name authorized Providers.
However, it hoped that RA’s can simply require proof of AEWRS
compliance in order for provide EWR services.
c. AAWCO
and Providers
As discussed above, the relationship here is one of application
and approval as well as periodic re-approval.
6.
Operational Example
a. Creation
of an electronic warehouse receipt.
December
1, 2000
Mr. Smith enters the Friendly Elevator and wishes to obtain
a warehouse receipt on 10,000 bushels of corn to serve as collateral
for an operating loan. Smith has 25,000 bushels in store. Staff
records the transaction in their grain software system, the
Provider's stand alone software system, or the Provider’s
web site. The amount in open store is reduced 10,000 bu. and
a 10,000 bu. state negotiable warehouse receipt is created.
The Friendly Elevator employee completes all the information
required and logs-on to the AAWCO EWR Provider they have chosen
to file the EWR. A confirmation is received back via fax and/or
email from the Provider for Friendly Elevator and for Mr. Smith.
b. Adding
a Lienholder
December
8, 2000
Mr. Smith enters the Farmers State Bank with the confirmation
document describing his EWR in order to secure an operating
loan. After logging on to the Provider's software or web site,
the banker views Mr. Smith’s EWR to assure it is clear
of existing liens (Receipt Status: "O"). Then, the banker will
enter a Change Record of type "L" (Open with Lienholder) including
the bank's AEWRS registry number in the "Lienholder ID Number"
field 8. At this time, the Change Record will update the farmer's
Receipt Status from "O" (Open) to "L" (Open with Lienholder).
A confirmation of the "L" Receipt Status is generated for the
bank, elevator and Mr. Smith. Again this can take the form of
a fax or an email. The next time Friendly Elevator logs onto
the Provider's system, they will become aware that a Change
Record exists for an EWR written on their elevator.
c. Removing
a Lienholder
November
1, 2001
Mr. Smith has paid off the operating loan at Farmers’
State Bank. The banker will logon to the Provider create another
Change. The Receipt Status on the Change Record will indicate
"O" for Open.
d. Canceling
a warehouse receipt.
November
20, 2001
With the lien removed, the farmer wishes to settle and be paid
for his grain on EWR. He reenters the elevator and requests
payment. Elevator personnel will logon to the Provider’s
site and create a Change Record. This time the status will be
listed as "C" for canceled as the EWR is terminated. The grain
proceeds may then be re-settled to another grain account or
the grain sold.
Each of the
above transactions are kept indefinitely by the Provider. Thus,
the entire history of the EWR, from issuance to cancel date can
easily be recalled.
Appendix
A - Data Record | Appendix B - Change
Record | Appendix C - Transmission Requirements
| Appendix D - EWR Committee Members
| Request for Comments
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