Disadvantages of Trade Finance and how to avoid them

disadvantages of trade finance - shipping and freight resource

At first glance, trade finance offers huge benefits to all parties involved in an international transaction.

Importers can invest in profitable new international ventures without extracting capital from their business or compromising cash flow, and can repay the finance using profits generated from their imported receivable on lengthy repayment terms, whilst suppliers receive payment as soon as goods are dispatched.

Both also benefit from the security of a middleman who enforces their contractual obligations and insures them against non-payment.

While there are several advantages of using Trade Finance there can be disadvantages to using trade finance as well, which usually result from lack of awareness about the product.

In this article we look at the disadvantages of Trade Finance and offer five key pieces of advice to avoid/overcome these disadvantages..

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Which type of vessels is each maritime nation buying..??

shipping and freight news - shipping and freight resource

Despite the relative difficulty in obtaining adequate ship financing, activity in the S&P market for second hand vessels is still rather brisk.

Every nation has its own requirement for ships for their trade.. In this article shared from Hellenic Shipping News Worldwide, we look at which ships are in demand and what types of vessels each maritime nation is buying..

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The link between Trade Finance and Transport

trade finance and transport - shipping and freight resource

Trade Finance and Transport are intricately linked in the process of global trade..

In Part 3 of the Trade Finance series, we take a look at how these two are linked and how it impacts on global trade as a whole.. We discuss the strategy to be used, the risks and how to mitigate them, how to secure and execute your transactions and how to drive your business profits..

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The Advantages of Using Trade Finance

advantages of trade finance - shipping and freight resource

The collateral obligations, repayment terms and risk thresholds of conventional lenders can make finance difficult to access for firms looking to begin or expand international trade ventures.

Trade finance enables firms to undertake such ventures, generating revenue growth and securing higher profits for firms operating in various industries.

Moreover, by providing trade-specific financial products overseen by industry expertise, trade financiers help firms overcome the challenges inherent in international trade. In doing so, trade finance offers three major advantages to these firms.

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A ship powered by vegetable oil…. Yah right…!!!

Vegetable oil powered ship - shipping and freight resource

Albeit a bit slow compared to other industries, the shipping industry continues to innovate and try to better the environmental impact on the business worldwide.. Maritime transport reportedly has the lowest carbon emission per ton of goods carried over a kilometer when compared to other modes of transport..

But now a new initiative is reported to have successfully used VEGETABLE OIL instead of conventional bunker fuel to power a ship, offsetting over 40 tons of CO2 emissions while also significantly reducing other local emissions like sulphur, soot and black carbon..

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Introduction to Trade Finance

Trade Finance Series - Shipping and Freight Resource

Many businesses rely on lending to finance new ventures, reduce their financial exposure or manage their cash flow..

Trade financiers provide or identify sources of capital for firms seeking to invest in international trade and create structures for them to access it.. But what exactly is Trade Finance and how does it all work..??

This article is part of an introductory series about trade finance, where we look at the advantages of trade finance, the ways trade finance can be structured, and the products underpinning import and export transactions..

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Emergency Bunker Surcharge – is it really an emergency..??

what is your opinion

Depending on which carrier you use, you may come across various abbreviated variants of BAF (Bunker Adjustment Factor) such as BUC (Bunker Contribution), SBF (Standard Bunker Adjustment Factor) etc..

In the last week of May 2018, many carriers implemented what is known as Emergency Bunker Surcharge (EBS) or Emergency Bunker Fee (EBF) or Emergency Fuel Adjustment Factor (EFAF)..

Join the debate on whether this Bunker Surcharge and the quantum actually qualifies as “Emergency”..

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What are the mandatory details required for the transportation of hazardous cargo by road..??

hazardous class labels

Hazardous goods can be defined as materials or items with hazardous properties which if not properly controlled, may present a potential hazard to human and animal health and safety, the environment and infrastructure..

Hazardous goods must be classified, packaged, marked, labelled and packed as per the regulations set out by the IMDG Code by the International Maritime Organisation and also needs to be handled with utmost care and consideration of its dangerous nature..

Any misdeclaration, miscommunication or incorrect documentation could have severe consequences and could prove disastrous to human lives on shore or on a ship..

We all need to understand that Dangerous Goods or Hazardous Goods have been given this name for a reason..

In this article we discuss the mandatory details required for the transportation of hazardous cargo by road.. Are the transporters taking these requirements seriously..?? Join the discussion..

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How significant will the freight rail revolution be over sea freight..

Shipping and Freight Resource Press Release

Recently there has been quite a buzz in the air about freight rail and movement of cargo especially from China to Europe and how quickly the cargo is moving..

In this article I am posing the question “How significant will the freight rail revolution be over sea freight“..

Join the discussion and share your views and opinions..

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International Trade and Shipping Global Scholarship

Learning Shipping and Freight Resource

Trade Finance Global (TFG), the leading trade information provider and international trade finance brokerage has launched a Global Scholarship to students studying international trade and shipping, in recognition of the global trade skills deficit. The first of its kind, the scholarship provides undergraduate and postgraduate students with $700 USD / £500 grants to assist with graduate studies.

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