Global Trade and Light

AI purveyors are desperately and expensively bent on achieving profitability. Several factors compete in frustrating this process.

Global Trade Solutions and Vaporware: It’s in beta. Like, the final betas, probably. Machine learning. AI. Neural network. Gigabit ethernet. Quantum computing…like we did with Blockchain:

Accommodation: The cash conversion cycle of the buyer often calls for accommodation. The importer of silk who turns the cloth into ties or scarves, for example, must first produce his or her wares, display them in stores that require lighting, shelving, advertising (overhead) and the merchant is not “put in funds” until his or her clients pay for the items. This typically takes 30, 60 or 90 days and so trade terms were created so that the buyer of goods would be accommodated by not having to pay for the purchases of silk immediately.

In this way, Trade Finance differs from Payments with the provision of time drafts or time bills of exchange.

Payments do not adequately describe the requirements of global traders. For this reason, such instruments as foreign collections and letters of credit have been created. Today, when e-Commerce is prevalent, a new means has been created to move faster than traditional trade finance but one that still provides accommodation. It is called Correlation*.

Process:

Visualization is the most effective way to settle the financing of the exports and imports of enterprises selling and buying the innovative products they produce and purchase:

Correlation*, the principal product of The Following Sea, uses AI in a Process:

• By agreeing to Incoterms as well as a specific set of visual formats for the authenticated settlement of a trade transaction, the buyer and seller can now process trade at the speed of light.
• This is key because e-Commerce and advancements in global trade impose a requirement for speed on the snail-like, paper-intensive, labor-intensive traditional trade finance mechanisms that banking has traditionally provided.

QR Codes:

and AI:

can now be combined with a deep knowledge of trade finance to meld technology and science and to provide the all-important accommodation to the art of global trade finance.

Process Continued

• The buyer and seller agree on the Incoterms, and a specific set of visual formats for the settlement of a trade transaction that is in harmony with the payment structure of their deal, what is ultimately the underpinnings of their relationship.
• They then exchange face-to-face an encoded and specific set of visual formats for the settlement of a trade transaction after agreeing to the payment structure.
• Also included in this process are such cash management-friendly processes as dynamic discounting:

Dynamic Discounting

Whereas supply chain finance is focused on generating cash flow improvements, dynamic discounting increases a buyer’s profitability by reducing its cost of goods sold (COGS) and providing an opportunity to earn returns greater than interest income on excess cash. It gives buyers the ability to pay their suppliers early in exchange for a reduced price on the goods or services purchased, the discount. Discounts are usually applied on an invoice-by-invoice basis and may vary based on the date of payment to the supplier.

The earlier the payment is made, the greater the discount.

• This complementary process also verifies authenticity at the time of trade settlement.
• If banks are needed to provide for accommodation of the cash conversion cycles of buyer and seller, they are integrated into the process.
• After shipments are initiated, shipping documents encoded by QR code:

are delivered to the buyer and the pertinent customs and security authorities in order to pay the duties and taxes and quickly clear and deliver the freight in accordance with the applicable Incoterms.

Trade Settlement

AI is used to determine with the use of such pairing as provided by Microsoft Edge for example, to do a match of agreed upon buyer and seller of one of a specific set of previously agreed upon visual formats.

• If there is a match, payment is made. When there is no match,?reconciliation is used to resolve discrepancies** and otherwise, payment is rejected.

The?specific set of visual formats referenced in this article are immediately available to the Magnificent Seven and others such as Mistral, at much less cost than their many failed expeditions into money-making with AI.

*Process Patent Applied For

**Discrepancies are described in another article to avoid confusion

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