How Tidewater pays vendors at the real exchange rate

Tidewater is a sustainable seafood distributor that buys from fisheries in Norway, Chile, Vietnam and Canada. With more than 70% of its suppliers paid in a foreign currency, exchange rates aren’t a detail for Tidewater. They’re a line on the P&L.

The hidden cost

When Tidewater’s controller compared the rates the bank had used against the mid-market rate on the day of each payment, the gap averaged 2.7%. Across more than $18 million in annual supplier payments, that was nearly half a million dollars a year, none of it visible on a statement.

Holding the currencies they pay in

Tidewater now holds balances in NOK, CLP, VND and CAD inside Saro. When customer payments arrive in dollars, the team converts at the mid-market rate whenever it suits them, not at the moment an invoice is due. Suppliers are paid from the matching balance through local rails, usually arriving the same day.

Clear rates, before every payment

Every payment shows the exact rate, the fee and the amount the supplier will receive before anyone confirms it. Suppliers stopped receiving short payments caused by intermediary fees, and disputes about missing amounts disappeared.

Results

• FX costs: down from 2.7% to 0.4% of payment value.

• Annual savings: around $420,000.

• Supplier payments: 92% arrive the same day.

“We didn’t renegotiate a single contract, but our margins went up. We just stopped losing money in the conversion.”

Planning around currency

Holding multiple currencies changed how Tidewater plans. The team now looks at upcoming supplier payments by currency every two weeks and converts in a few larger batches instead of dozens of small ones. That gives them more control over timing and fewer conversions to reconcile.

• Map your supplier payments by currency for the next quarter.

• Hold balances in the two or three currencies you pay most.

• Convert in planned batches, and compare every rate with the mid-market rate.

For Tidewater’s suppliers, the change was just as noticeable. Fisheries that once waited a week for payment now receive it the day it’s sent, which has made Tidewater a preferred buyer in several markets.