You need to control and hedge the risk generated by the market by stressing your existing position with current and foreseen market variations, as the prices, premiums, spreads, foreign exchange rates … evolve in real time. These controls must show your exposures to the market, the value of your exposures and should allow you to take clear hedging decisions.
You need to control and insure the credit limits of your counterparts as breaching them may force your counterparts to default on their obligations.
The credit limits are moving each time your counterpart negotiates a new trade with you or other partners; each time you send them an invoice and they make payments; the exposure also increases whenever the market moves. Using an organisation such as COFACE, you will be able to have up to date credit limits and understand clearly the limits under which you can trade with each counterpart (group and subsidiaries) as well as which parts of the business you should insure.
You need to control your operational risks, generated by your stocks in warehouse, inventory in transit (by any means of conveyance) plus the geopolitical risks, all of which is done by monitoring the current exact location of your goods and declaring them to your insurers.
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