Trade

Continuing with our educational series on Trade Finance, in this article we look at Import and Export Finance and how it works in international trade.

Moving raw materials, incomplete goods and finished products between trade jurisdictions can be fraught with regulatory complexity, financial risk and business uncertainty.

As a result, many firms refrain from engaging in importing or exporting. However, these activities can also be extremely lucrative; importing can grow revenues and reduce costs, whilst exporting increases firms’ customer base, and therefore their profits.

This leaves many firms in the awkward position of knowing there are profitable international transactions out there for them to conduct, but being unable to free up the capital from their businesses’ existing accounts receivable to invest in them without taking great risks with their companies’ assets and cash flow.

Trade financiers have the tools and the expertise to manage both these issues and help both importers and exporters invest in profitable international ventures.

Blockchain - that newfangled concept seems to be catching on quickly and moving along quite nicely in the shipping and freight industry..

A Blockchain is a ledger that uses cryptography, the internet and naturally computers to create, share, transfer, track and secure assets and transactions (represented/organised as blocks) belonging to everyone to fulfil a certain function..

Unless the previous transaction is not completed in the chain and shared forward with a timestamp, the next transaction cannot happen..

In the first transaction of its kind in India, HSBC India and ING Bank Brussels have enabled, successfully executed and completed a full blockchain driven trade finance transaction between India's Reliance Industries and USA's Tricon Energy..

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..

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..

CargoX Smart Bill of Lading based on Blockchain – how it works..   Smart Computers, Smart Phones, Smart Cars and now Smart Bill of lading..!!!! Shipping documentation...

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.

Currently the bunker fuels used in all modern commercial ships have a high content of sulphur which is quite harmful to the environment..

The current global limit for sulphur content of ships fuel oil is 3.50% m/m (mass by mass)..

The IMO has been working to reduce harmful impacts of shipping on the environment since the 1960's and as from 1st of Jan 2020, has implemented regulations that sets the new global limit on the sulphur content at 0.50% m/m..

IMO has advised several methods through which ships can meet lower sulphur emission standards, which obviously comes at a cost.. Read and share your comments on how these new costs may affect you..

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..

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..

Profitability in sea freight shipment is not a myth or a unicorn.. It is very possible.. Read how..

It is not a secret that ocean transportation and logistics is currently confronting immense change in terms of new technology, new markets, rising customer expectations, and new business models..

There have been a few articles on this blog about these advances like Blockchain based Bill of Lading, and other technologies that are shaking up the freight industry .. There are many ways the industry could develop to meet existing and new challenges, some of which are evolutionary and others are more revolutionary..

While cargo transportation is generally a complex business, in some cases it could be straightforward as well depending on how you manage it.. It is also a fact that in this high paced business environment it is not easy to follow every market trend and find answers on how to tackle the prevailing challenges easily..

Each customer and each shipment has its own issues, peculiarities, problems and characteristics.. But the main question that several shippers and services providers ask is “How to ensure profitability in sea freight shipment"..

More often than not, exporters, importers, carriers and logistics service providers experience loss due to poor planning, decision making and implementation..

A lot of people get into the industry sometimes without knowing even the basics relating to the business, the specifics relating to the business, the requirements and some of the vital information that can make or break the business.. I have even written a Beginner's Guide to Importing for those who wanted to get into the importing business but didn't know how..

Here are 11 steps you can follow to ensure profitability in sea freight shipment..

With so many new companies launching blockchain-based shipping products, it’s clear that maritime trade will look very different in a few years.. What’s less clear is what that change will look like..

In this article we examine what barriers still exist to widespread blockchain implementation, and what companies are doing to overcome them..

We talk to startups like CargoX and established players like Agility, Maersk, IBM, Evergreen etc. to understand how shipping is changing, and where it’s going..

As far as container shipping is concerned, the current decade or the period since Y2K has probably seen the most number of consolidations, mergers, acquisitions and alliances than any other period in container shipping history..

Could ONE (Ocean Network Express) which is the latest, be probably the last one (at least for now) in the string of consolidations, mergers and acquisitions..??

Spare and share your thoughts..

We all know what a bill of lading is and what a contract of carriage is.. But do you know when a bill of lading become a contract of carriage..?? This article examines this question in detail..

Since the time of opening up for global trade circa 1980 to becoming an economic superpower in the 2000s and till now, China has come a long way in terms of global trade..

China's growth in the last 30 odd years has however been marred by allegations of Chinese exporters or traders being fraudsters and scam artists creating a notoriety for them among global traders..

Even on this blog, there have been a few real-life examples and case studies from readers not happy about the way some Chinese companies/people have conducted business with them..

So has this situation changed or gotten any better..?? Should we still source from China..??

BREXIT - the mention of which seems to shake investors, countries, people, governments, markets, stock exchanges to the core.. 

But is it all that bad..?? Is there life beyond Brexit for those affected on both sides..?? 

Intermodal Asia took place 21st-23rd March 2017, welcoming a record number of visitors to its 4th edition in Shanghai, China. With more than 8,500 visitors, 160 global exhibitors and 85 expert speakers, Intermodal Asia successfully brought together the senior decision makers from the container and intermodal industry to network, learn and do business with new and existing customers.

A Change of Destination request is sent to or received by the carriers for many shipments.. This article dissects such a request and explains the process of how to handle it..

Last part of a 4 part article that dissects a bill of lading and discusses the different parts and the information that needs to be filled up in each part..

3rd part of a 4 part article that dissects a bill of lading and discusses the different parts and the information that needs to be filled up in each part..

Welcome to Part 2 of a 4 part series about the Parts of a Bill of Lading.. In this article, I cover the details relating to the voyage..