Four of the world's largest commodity traders, collectively known as the ABCDs, are banding together to try and bring the industry into the modern era by transitioning its record-keeping system from paper to digital.
Archer Daniels Midland Co., Bunge Limited, Cargill Inc. and Louis Dreyfus Co. announced Thursday they are working to modernize the century-old global grain and oilseed shipping industry that relies on the manual transfer of hundreds of thousands of paper documents annually.
The four companies said the effort to standardize processes is for the sake of transparency and efficiency.
The industry, which ships, trades, stores and sells bulk food stuffs, still operates under a rudimentary system of hard paper copies. Contracts, certificates of origin and sanitation documents are handed off from person to person, e-mailed, faxed or sent by post. Data often has to be manually retyped and entered into a computer system that may not communicate with another part of the supply chain.
It's time-consuming, expensive and convoluted. In some cases, there may only be one copy of a document passing between locations, compromising the record trail.
"Agriculture has always been a technology industry. Farmers and our customers expect us to deliver innovations that make them more efficient, effective and profitable," David MacLennan, chief executive of Minnetonka-based Cargill, said in a statement announcing the effort. "We embrace this as an opportunity to better serve the industry."
Rarely does this group of influential and competitive conglomerates collaborate on projects.
Previous efforts by individual companies to digitize failed as the procedures and methods affect all companies working within any one particular point in the supply chain, said April Nelson, spokeswoman for Cargill.
The companies, which together employ more than 235,000 people worldwide, hope that other traders will join the effort. Minnetonka-based Cargill is the largest of the four, handling and processing tens of millions of tons of crops and meats each year.