String Sales and Commodity Trade Chains: Mechanics
How a cargo afloat is sold repeatedly down a chain, the procure option in Incoterms A2, circular strings, and the documentary passing that makes it work.
A string sale is a chain of successive sales of the same cargo, usually already afloat, in which each seller performs by passing documents rather than by shipping goods. Strings are the normal structure of the oil, grain and metals trades and can run to dozens of links on a single parcel.
The full article will cover how a string forms and prices, the documentary chain and the role of the bill of lading as the instrument that carries the goods down it, circular strings where a cargo returns to an earlier seller, book-outs that settle a circle financially rather than physically, the nomination and appropriation mechanics, and the effect on laytime and demurrage claims that must be passed up a chain within contractual time bars.
The sale-term side is what makes it possible. A2 of every Incoterms rule except EXW lets the seller perform either by delivering the goods or by procuring goods already so delivered, and the ICC Explanatory Notes for FCA and FOB both state that this wording exists to cater for string sales.