Did you know that global supply chains are in disarray, with a whopping $15 trillion at stake and escalating disruptions? It's like a game of Jenga, where one wrong move can bring the whole tower crashing down. No wonder a staggering 56% of businesses are experiencing adverse effects, and 30% of shipments are encountering damages or delays. It's time for a transformative approach to supply chain risk management-based financing.
And what's the solution, you may ask? Introducing continuous visibility utilizing advanced technologies such as the Internet of Things (IoT), Business Intelligence (BI), and Artificial Intelligence (AI). It's like having a team of superheroes that can see through walls and predict the future! These innovations allow for a comprehensive assessment of risks by viewing the supply chain through the lens of the cargo itself.
Envision a scenario in which cargo is monitored at every stage, from production to warehousing and retail. It's like having a GPS tracker on every item, except it's even smarter! This empowers businesses to identify and address risks, challenges, and opportunities in real-time, maintaining control over critical delivery KPIs and ensuring safer, more secure transportation of goods. It's like having a safety net that catches anything that falls.
But why is this important? Well, imagine a shipment of coffee beans with insufficient protection against humidity by desiccant bags. If this vulnerable cargo is exposed to a defined risk scenario like mold, it's in trouble. And if this particular cargo is critical for producing coffee capsules, it can negatively impact the value chain. It's like a domino effect that puts the revenue, profitability, and the whole business at risk.
That's why continuously collecting data about the cargo and calculating a dynamic risk profile is so important. Because now, it allows businesses in need of swift and flexible financing to adjust their financing options based on the changing risks associated with international trade. It's like a game of chess, where you have to think ahead and adjust your strategy accordingly. This way, businesses can minimize their financial losses and maximize their profits.
It's like a domino effect that puts the revenue, profitability, and the whole business at risk.
- Adjust their financing options based on the changing risks associated with international trade.
- Mitigate financial losses by minimizing exposure to high-risk transactions.
- Optimize profits by taking advantage of low-risk transactions.
- Build better relationships with trading partners by offering flexible financing options.
The availability of cash is an essential part of optimized trade finance operations. It's like having a fuel tank that powers the whole machine. However, the pressure to delay payment terms and the need to offer more extended inventory availability, with a corresponding increased number of days of storage, has been growing continuously. It's like trying to fit a square peg into a round hole!
This phenomenon creates a profound liquidity gap that trade operators worldwide are trying to overcome. It's like trying to swim upstream! But considering the growing number of credit and regulatory limitations, it has become apparent that the possibility of unlocking and leveraging on the bankability of the assets constituting the inventory is becoming a challenging "must" in trade finance.
Let's talk about potential innovative and disintermediating financing solutions for freeing up cash in global trade. It's like being a magician that can pull a rabbit out of a hat!
- First up, we have trade finance on the blockchain. It's like having a superhero that can automate trade finance processes and provide real-time visibility into cargo shipments. These platforms enable businesses to access financing options based on real-time data about their cargo and derived risk profiles without intermediaries. It's like cutting out the middleman and going straight to the source!
- Next, we have dynamic discounting. It's like having a genie that can grant suppliers wishes for early payment discounts. Using real-time data about cargo and derived risk profiles, businesses can adjust their financing options and offer dynamic discounts based on the changing risks associated with international trade. It's like having a crystal ball that shows you the future of discounts!
- Moving on, we have crowdfunding. It's like having a group of superheroes that can band together and save the day! This financing solution enables businesses to raise funds from many investors. Using real-time data about cargo and derived risk profiles, companies can adjust their financing options and offer crowdfunding based on the changing risks associated with international trade. It's like having a loyal army of investors that believe in your cause!
- Last but not least, we have peer-to-peer lending. It's like having a friend that can lend you money when you need it the most! This financing solution enables businesses to borrow funds directly from individual investors. Using real-time data about cargo and derived risk profiles, companies can adjust their financing options and offer peer-to-peer lending based on the changing risks of international trade. It's like having a safety net that catches you when you fall!
So, let's be magicians, genies, superheroes, and friends and use innovative and disintermediating financing solutions to free up cash in global trade.
Hey there, finance gurus! Are you ready to take on a new challenge and help Beneficial Cargo Owners with their trade financing needs?
If you're looking to expand your portfolio and work with some promising clients, then let's connect. I'm on the hunt for savvy financiers who are ready to shake things up and bring some fresh ideas to the table.