Port Cost Financing

Prefunding has long been the industry standard, requiring customers to advance funds based on Proforma Disbursement Accounts (PDAs) before port calls. This model often results in locked working capital, increased capital costs, and a heavy administrative workload. In stark contrast, the innovative Port Cost Financing model introduced by Wilhelmsen and RoundFort Capital enables customers to manage port call and canal transit payments globally without the need for prefunding, thereby improving cash flow management and reducing operational risk.
 

Key Benefits of the New Payment Solution

	Simplified Operational Workflow Customers can significantly reduce the number of transactions they manage annually - from potentially thousands to as few as four - maintaining full control over their processes without the burden of numerous settlements.
	Enhanced Cash Flow Management The clear overview of port costs provided under the new model allows for an accurate planning and timing of settlements.
	Improved Working Capital By eliminating the need for prefunding, the new service frees up significant amounts of working capital, enhancing financial flexibility.
	Competitive Financing Access Customers benefit from lower financing costs, making it more efficient to manage port call expenses.
	Operational Risk Mitigation The removal of funding-related tasks reduces risk of delays and lack of funding, ensuring that port operations are smoother and more predictable.

Need clarity on Port Cost Financing?

1. What is unique about this initiative, that differentiates it from other offerings out in the market?

Traditionally, vessels had to prefund port calls, tying up significant cash with ship agents. Even for "cash-rich" companies, this would have resulted in:

• High capital costs for prefunding
• Locked working capital that could be for alternative investments or other financial needs
• Plus, extensive administrative workloads for finance and operations teams with numerous settlements, email correspondence and cash management requirements.

With Port Cost Financing, customers can skip prefunding and pay after receiving the final invoice within a pre-agreed timeframe. We’re the first to offer no-prefunding for all global port calls, including canal transits and cash-to-master, setting a new industry standard.

2. What is the effort required to implement this solution? Do I need to change my processes and implement new technology?

Implementing this service does not require any new technology. There are also no disruptions to your current processes. You remain in full control of your process as before as payments from the fund are triggered after your approval of the PDAs and FDAs. However, instead of numerous remittances you pay after the Port Calls have been completed as few as 4 times a year.

3. How much can I potentially benefit from this solution in practical terms? 

The savings will vary according to the volumes under the solution and your current processes. However, we have seen potential for releases of working capital from a few million to up to hundreds of millions dollars for one single customer.

There are also operational benefits resulting from the reduction of payments to four per year and decrease in the amount of unnecessary emails and administrative tasks.

We are happy to have our team assess and discuss in further detail what are the concrete benefits for your organization.