Electronic Title Description
An electronic warehouse receipt (ewr) is simply a computer record of all of the
information which is required on a legal paper receipt. That data record
is stored on the disk of a secure computer system which has to be approved by
the U.S. Department of Agriculture as meeting specific operating
standards. Electronic receipts are authorized by federal legislation and
represent title documents which are legally equivalent in every way to
paper receipts.
The entity which operates the computer system on which electronic receipts are
stored is called a "Provider." Within the Provider's computer,
each receipt record is associated with party - the "holder" - who has
access to that receipt record. Only the holder can "transfer" his
electronic receipts to another holder. This is accomplished by the holder
simply informing the Provider via computer as to who the new holder should be.
An electronic receipt system must be highly secure and the Provider (EWR, Inc.) has
the responsibility for maintaining that integrity. Federal regulations require
further security in the form of backup computer systems and an audit trail of
all system activity.
The electronic receipt operation begins when a warehouse creates a receipt record
on EWR's web site. Those records become legal receipts when stored on the
EWR computer. The warehouse is the initial holder and can give
instructions to the Provider to make another party the new holder. The
Provider sends confirmation of these transactions to the "sending" and to the
"receiving" holders.
An electronic receipt can have many holders during its existence but can have
only one holder at any specific moment. At some point, a shipper-holder
will "deliver" his receipts back to the issuing warehouse (who then becomes the
holder) along with instructions regarding shipment of the physical
commodity. As the warehouse ships the commodity, it sends instructions to
EWR's computer to cancel the appropriate electronic receipts.
Based on these directions from the warehouse, EWR marks the receipt
record as canceled and a legal receipt no longer exists.
The preceding description provides only the most simplistic view of electronic
receipts. Certainly the concept and basic operations are quite simple and
straightforward. However, complexities can be added to the system to
provide for many different situations.
Such added features increase the value
of the electronic receipt system to all of its users.
Electronic Document Advantages
The many advantages of electronic receipts are the key reason that
electronic receipts have had such a powerful impact in several industries in a short expanse of
time. First, electronic receipts eliminate the need for handling paper -
including keypunching, sorting, and transporting paper. In addition, the
electronic receipt "moves" over the Internet which permits transfers between
traders to be completed much more swiftly than paper documentation
allows. Keypunching (and its associated cost) of data is reduced or
eliminated because receipt information can be directly captured into the
holder's computer from EWR's system. A further advantage comes
from the fact that each Provider maintains an audit trail which keeps details
of every movement of electronic receipts between holders. This
information can be very helpful in resolving problems and locating receipts;
however, this same information is not available in any format for paper
receipts/documents.
Financial Institutions
Financial institutions have become increasingly comfortable with
electronic warehouse receipts. Only a handful of banks would accept electronic
receipts as collateral in September 1995. Today more than 100 financial
institutions find such loans quite acceptable.The EWR Inc. Provider systems allow for the use of the
cotton, grain and peanut receipts as collateral by financial institutions, with special programming in
place to meet these unique requirements.