Overcoming financial barriers to capture opportunities with Rong Long Hao Trading

The Client

Rong Long Hao Trading is a reputable importer of Fast-Moving Consumable Goods (FMCG) in Guangzhou, China. They specialise in importing highly sought-after beverages like yogurt, soy drinks and milk products wholesale from Vietnam and Thailand to China for distribution to agents, supermarkets and retail shops. Well-known brands they carry include Dutch Lady and Ivy. The company has since established long-term and stable cooperative relations with many retailers and agents.

Facing a myriad of challenges

Rong Long Hao Trading purchases beverages wholesale from producers overseas. Payment needs to be made in full before the cargo can be released for export. During peak festive seasons when demand for such products are high and when credit is tight, a lack of financing could cause the company to lose trading opportunities. Many financial institutions are unwilling to extend credit to buyers like Rong Long Hao Trading, as there is a lack of collateral to manage risk.

Besides credit crunches, logistics is another challenge. Purchases for such cargo are normally on Exwork trading terms, which means that buyers like Rong Long Hao Trading will have to arrange for the logistics to move the cargo to / from port, book freight, clear customs at both ends and handle all export and import procedures.

Beverages are highly time-sensitive cargo and Rong Long Hao Trading would need prompt logistics services, quick customs clearance and speedy cargo collection arrangements.

The Process

After taking the time to understand the context and challenges, PSA Cargo Solutions worked with financial institution Shuttleone and Global B2B Fintech Platform operator CALISTA® Finance to tailor-make an integrated Trade Financing solution and help Rong Long Hao Trading resolve its logistics and credit issues

The Solution

In this trade financing product, CALISTA® Finance provided a digitized supply chain finance solution for transparency, single window data-flow and complete digital interface. At the same time, Shuttleone relied on the data captured in CALISTA® to act as creditor, enabling Rong Long Hao Trading to have ready access to credit. PSA Cargo Solutions also streamlined Rong Long Hao Trading’s business processes by being their single point of contact handling the complete suite of logistics services and cargo control, acting as an importing agent, collateral manager and providing end-to-end logistics services.

Conclusion

“Before your product was launched, we had to engage numerous logistics services providers, importing agent and remittance companies both in China and overseas. There is also generally a lack of trust from financial institutions to extend credit to us. Your product allowed financial institutions to have the confidence to extend their credit to us by holding on to our goods on their behalf. You are now the single point of service for all our import procedure. We can also request for credit and perform track and trace through the CALISTA® Finance digital interface. This has greatly helped us to stay competitive in our business. I would like to take this opportunity to thank you and your partners for helping us stay competitive in the market,” said Rong Long Hao Trading.