Case Study

Enhanced payment solutions to assist the global operations finance team 

Overview

A global shipping company, based in Dubai, specialising in high-value logistics and transportation across international waters, faced significant challenges related to foreign exchange transactions.

With clients and suppliers spread across different continents, dealing in various currencies, the company needed to manage FX risks while ensuring cost-effective operations. Monetae partnered with the shipping firm to optimise their currency management and provide tailored FX solutions.

Challenge

The shipping company was dealing with complex FX needs due to the nature of their international operations:​

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• Multi-Currency Transactions: The company had to make and receive payments in multiple currencies, such as USD, EUR, and GBP, for fuel purchases, equipment leasing, and supplier contracts. Exchange rate fluctuations could significantly impact their costs and profitability.

• High-Value Transactions: Shipping equipment and operational costs required large sums of money, meaning even small shifts in exchange rates could result in major financial losses.

• Supplier Payments and Contracts: Many contracts with suppliers, particularly for fuel and equipment, were priced in USD. Securing favourable rates for these recurring payments was crucial to maintaining their margins.

• Currency Risk Management: The shipping company’s lack of a structured FX risk strategy made them vulnerable to sudden market changes. Without a hedging strategy, their financial stability was at risk due to unpredictable exchange rate movements.

Solution

Monetae delivered a comprehensive FX strategy tailored to the unique needs of the shipping company:

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FX Risk Management

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Spot Payments for Day-to-Day Operations:

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• Real-Time Access to Rates: For day-to-day operational costs, including fuel purchases and dock fees, Monetae provided real-time access to competitive exchange rates. This ensured the company could settle payments efficiently while saving money on currency conversion.

• Efficient Payment Process: With our streamlined payment system, the company could easily manage their global payments without delays, avoiding potential disruptions in their shipping schedules.

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Forward Contracts for Recurring Expenses:

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• Securing Future Rates: Monetae implemented forward contracts to lock in beneficial exchange rates for recurring USD-denominated payments, such as monthly fuel expenses and equipment rentals. This provided the company with budget stability and allowed them to hedge against potential rate increases.

• Predictable Costs: By locking in exchange rates ahead of time, the company could plan their financials more effectively, protecting their margins and avoiding unexpected currency costs.​​