On the other hand, the logistics companies are providing banks with two key elements – firstly the warehousing and transportation of the  BIS Review 109/2007  1  goods and secondly the visibility into the movement of those goods. This increased visibility into the supply chain encourages banks to extend credit to trading partners instead of issuing letters of credit.
The “marriage” of the physical and financial supply chain processes therefore injects additional and more cost-effective liquidity into the system. At the base of this shift from SINGLE PRODUCT solution to SUPPLY CHAIN finance solution are advance in connectivity – the internet, new IT technology and applications and efficient capital markets.