Citi's new platform aids Latin America supply chain
The Latin American supply chain is getting a boost this week.
Citi announced the launch of a new web-based supply chain platform for 14 countries in Latin America. The fourteen countries include Brazil, Mexico, Peru, Argentina, Colombia, Panama, Puerto Rico, Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Jamaica and Trinidad.
“Citi is proud to be able to offer this solution to our clients in Latin America and across the globe,” the company said in a statement.
Citi’s pioneer Supply Chain Finance Vision is a web-based platform for discounting, tracking and reporting receivables and facilitates communication between buyers and sellers. Supply Chain Finance Vision is a complementary solution to Citi’s Supplier Finance and the overall suite of supply chain finance solutions that Citi offers.
The system features multi-location, multi-lingual, and multi-currency functionality, and can link directly to companies’ ERP systems to automate file processing and reduce input errors. It provides strong benefits for buyers and suppliers, offering to suppliers an attractive tool to accelerate the liquidity of receivables at competitive rates with no need to increase their debt.
It also allows buyers to better manage days payables outstanding (DPO) and suppliers the ability to manage their Days Sales Outstanding (DSO). Today, Citi in Latin America works with over 120 buyers and 4,000 suppliers to accelerate their working capital strategies.
Citi’s working capital and supply chain management solutions allow companies to manage risks and optimize cash flows, thereby improving financial flexibility, increasing supply chain liquidity, and reducing trade-flow risk.
“We are committed to delivering innovative and specialized solutions in supply chain and working capital management to our clients,” Francisco Aristeguieta, Global Transaction Services Latin America and Mexico Region Head said. “Far more than a means of low-cost financing, our unique and recently launched regional web-based supply chain finance solutions offer tremendous value during any economic cycle.”
With a market-leading network spanning the globe, Citi provides in-country trade and supplier financing expertise in 80 countries. More than 2,000 trade professionals, plus 1,500 relationship management and sales staff serve more than 15,000 trade customers.
Citi’s trade experts and six regional processing centers offer around-the-clock operations support and deliver supply chain solutions to suppliers, buyers and financial institutions.
“Regulatory changes and tightening credit continue to challenge economies around the world, keeping supply chain finance and working capital management as a focal point for companies of all sizes,” John Ahearn, Global Head of Trade in Citi’s Global Transaction Services unit said. “Citi is proud to be able to offer this solution to our clients in Latin America and across the globe.”
Global Transaction Services, a division of Citi’s Institutional Clients Group, offers integrated cash management, trade, and securities and fund services to multinational corporations, financial institutions and public sector organizations around the world.
With a network that spans more than 100 countries, Citigroup’s Global Transaction Services supports over 65,000 clients. As of the second quarter of 2011, it held on average $365 billion in liability balances and $13.5 trillion in assets under custody.
Edited by Kevin Scarpati
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector