A metal trader ensures lowest cost of financing and future growth by using Arviem’s real-time cargo tracking and monitoring solution

PROJECT SUMMARY

Arviem’s client, a trader with experience in the metals concentrate markets, decided to work directly with suppliers in Bolivia. His aim was to deliver silver and other metal concentrates from Bolivian mines to smelters in China and Europe. The trader faced challenges when trying to obtain financing as a new company, there was constant frustration with the large banks; with their lack of interest, or time-consuming KYC/AML processes. On the other side, the small banks’ costs were unreasonable. When a bank that could provide the requested financing was found, the lending structures and the payment were against the Bills of Lading at the load port, causing cashflow issues.

In order to secure low-cost funding for his goods in transit, the trader needed to show potential funders, insurance companies and inspectors credible data on how his supply chain worked, how risks were mitigated and why they should fund these transactions from container doors closing to doors opening. The client needed a credible independent monitoring service that was cost-effective and easy to implement. With Arviem the metal trader gained access to faster, cheaper, and longer financing for his trading activities.

The implementation of the cargo monitoring service followed a fast and straightforward process. After a signature to a simple Service Contract and the agreement on the shipping routes to be monitored, the Arviem monitoring devices were on their way to the shipments’ origin, a mine in Bolivia. The local inspectors were keen to be involved in placing the monitoring devices on the cargo after loading, sealing the doors and issuing the Holding Certificates. In the meantime, the trader was provided access to Arviem’s monitoring platform and could follow the location and condition of his shipping container in real-time. As a result, the trader obtained financing as early as from the point of loading of the container. By making his supply chain more transparent through improving the quality of information available to financiers, the trader managed to attract the interest of more financiers. This allowed him to further reduce his cost of financing. Additionally, he was able to deliver goods on time to customers ensuring customer satisfaction which is crucial as a new trader on the market.

Manifold benefits after using Arviem’s service

The Arviem cargo monitoring service provides the core data for the financier to manage a number of regulatory and statutory requirements. By relying on the information collected through the independent monitoring of the location of the financed cargo, financiers (banks, hedge funds and others) can more reliably assess risks to set pricing and make data enabled financing decisions. By relying on the data when proving the robustness of a client’s supply chain, financial institutions are enabled to:

✅ Brief senior management and risk committee members using credible, presentable and independently developed data

✅ Reduce compliance and AML departments’ concerns

✅ Reduce fraud potential by having inspection, unique monitoring and reporting in real-time

✅ Provide tailored access to various departments to data and notifications

✅ Allow the bank to optimize its risk profile and manage this on a real-time basis

✅ Create a Chain of Custody ensuring all relevant documentation is connected with each individual movement providing traceability and tracking

Challenge

Finding a solution that enables a trader to obtain financing for his goods in transit from container doors closing at the mine to doors opening at the smelter.

SOLUTION

– Real-time, independent monitoring of the location and condition of shipments in transit providing single source, independent and verified information to banks, insurance companies and the trader;

– Easily deployed service

– Pay-per-use service to allow tailoring the service to financing requirements.

KEY RESULT

Besides being able to deliver goods on time to customers ensuring customer satisfaction as a new trader on the market, the trader benefits from the obtained financing from the point of loading of the container to the point of container opening. Overall, the client could realize -20% Working Capital Cost within 6 months of deployment.

“Thanks to the reliable data provided by Arviem, we did not only manage to obtain new sources of financing enabling us to finance our supply chain more effectively but also obtained a shipment traceability solution that dynamically updates ETA”

Metal Trader

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ARVIEM

Arviem solves the challenges of obtaining visible and intelligent trade by offering real-time end-to-end cargo monitoring services. As the only full-service provider for real-time cargo monitoring on the market, Arviem provides exceptionally accurate location and quality condition monitoring of cargo throughout the global supply chain. Our leading-edge solution will provide global supply chain stakeholders with on-demand access to real-time, transport-related data.

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 885924

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