● SWAP TYPE 01 — LOCATION

Skip the freight. Keep the delivery.

When you and a counterparty each hold inventory in the other's region, nobody needs to ship anything. Michael lets you serve each other's local demand instead. Michael quantifies the savings before you commit.

See the mechanism

The Mechanism

The shipment that never has to happen

Company A holds inventory in Region 1 with customers in Region 2. Company B holds equivalent inventory in Region 2 with customers in Region 1. Instead of both shipping long-haul, each serves the other's local customer from local stock. Each delivery runs under its own per-leg contract. Any quality or delivery-value difference between the legs goes into the term sheet as a price, not as a shipment.

Company A — Rotterdam

Holds EU inventory, has US customers

Becomes local supplier for Company B's EU customers, serving from Rotterdam stock instead of waiting on a transatlantic shipment.

Swap the haul

Company B — Houston

Holds US inventory, has EU customers

Becomes local supplier for Company A's US customers, serving from Houston stock. Both sales stay intact. The differential settles as a negotiated term.

Same two sales, delivered from the nearby plant. Michael prices and settles any quality or delivery-value difference between the legs. Nothing ships.

Illustrative Scenarios

What this looks like across materials

Hypothetical scenarios that show the shape of the saving, not measured results. The prize is real. Logistics typically consumes 8–10% of a chemical company's revenue (Establish Davis; McKinsey). The single largest cost a location swap removes is a freight leg that never needed to happen.

Petrochemicals

Rotterdam ⇄ Houston base chemicals

Both parties avoid ocean freight and customs duties on a transatlantic shipment that no longer needs to happen.

Freight + duty leg avoided

Refining

Turnaround scheduling, crude supply

A refinery facing a planned shutdown draws on a counterparty's local excess allocation instead of paying a spot premium.

Spot premium avoided

Minerals

Smelter feed from local stockpile

A smelter facing a supply gap draws from a counterparty's port stockpile rather than waiting weeks for standard delivery.

Production shutdown avoided

The Fee Model

A fee on the freight and duty you avoid, paid at settlement

Fee per party = X% × the freight and duty that party avoids

Each party pays a percentage of the freight and the import duty it avoids, invoiced after settlement. A minimum fee applies to each party. Handling, storage and every other cost you save are yours to keep. The duty counts only at a rate a customs authority publishes for the line. The fee follows the logistics saving, not the value of the material. If the swap does not save you money, there is nothing to share.

4.6% / 2.7%

Average MFN duty on chemicals into the EU / US (WTO World Tariff Profiles 2026; 2025 applied rates). Common commodity-chemical lines run up to 6.5%. That is the tariff leg of the savings a swap can take to zero.

See a location swap run end to end.

Request a walkthrough of the demo environment on your own corridor.