Effective Ways In Which The Blockchain Technology Has Improved The Financial System-- The Enhancement Of Trade Finance Processes #007

Source

Hello great minds,

It is another beautiful day and I feel honored to come before you all today to discuss on an issue of great importance in the cryptospace.

I trust you are all enjoying your activities in the community and you are all taking corrections of how the twitter promotion should be done.

Today being another day, we will continue our discussion on trade finance process and then we shall understand how it is being affected by the blockchain technology.

In our last discussion we learnt about the role of insurer in trade finance process but insurer is not the last key player of trade finance process, as we shall be learning about another key player in trade finance process.

---

---

KEY PLAYERS IN TRADE FINANCE PROCESS

---

---

• LOGISTICS PROVIDERS:

A very important role is being played by logistic providers in trade finance process as they serve as the connector of various elements of supply chain management, and they also help in the facilitation of the transportation of goods across borders.

The goal of trade finance is the mitigation of risks involved with international trade, and it also ensures that goods are safely transported and payment are swiftly made.

The logistics providers are one of the important individuals that makes this trade possible, as they are involved from the beginning until the end of the trade process, when the goods is finally delivered to the final consumer.

Explained below are some of the roles of logistic providers in trade finance process

STREAMLINE GOODS MOVEMENT:

One of the key responsibility of a logistics provider is to streamline the movement of good from the point which they were created to the point in which they are being used.

And this has to do with a meticulous ochestration of the various modes of transportation including road, air, sea, rail, all depending on the urgency of delivery and the nature of the goods being delivered.

Lead times are often reduced by efficient logistics and this are very important in international trade, where delay in delivery can result in loss of funds.

FACILITATE CONSOLIDATION OF SHIPMENT

Source

Another Important role of logistic providers in trade finance process is that if helps in consolidation and deconsolidation of shipments, minimizing transportation cost and optimizing cargo space.

Using economies of scale, they can initiate a negotiation with carriers for a favourable rate and pass on cost savings to their clients.

This cost efficiency is very important in trade finance process where the management of funds is very essential to a successful financial transactions

MITIGATION OF RISK

Risk mitigation is very essential in trade finance process and logistics providers helps a lot in the mitigation of risks that is associated with the movement of goods and services from their location of creation to their final consumers.

This form of risks includes risks of damage of goods during transit, risk of thefts if goods during transit and risk of loss of goods during transit.

The logistics providers contribute to the creation of a secured supply chain by implementing robust security measures, insurance options and tracking technologies etc.

INVENTORY MANAGEMENT

Logistics providers make a huge contribution to inventory management which is a facet that has closed l relationship with trade finance.

Through effective optimization and inventory control, logistics providers helps businesses to prevent stock out and minimize holding stock, ensuring that goods are flowing steadily in the supply chain..

And this has a significant effect on the financial aspect of trade transaction as cash flow can be strain by excessive inventory cost.

---

---

CONCLUSION

---

---

We have considered about another Important player in trade finance process.

The trade finance process is incomplete without the activities of a logistics providers and we have clearly stated their duties.

As we continue our journey, we shall learn Important things about trade finance process