TradeLens, a digital platform launched by IBM and A.P.Moller-Maersk, announced the completion of an innovative letter of credit between HSBC and Syngenta using a digital bill of lading based on blockchain technology.
"Agrichemical products were shipped from South Korea to Bangladesh using an entirely paperless process. The milestone demonstrates an important step in modernising trade finance and supply chain efficiency across the global trade ecosystem," according to a release from Maersk.
Electronic bills of lading have been considered the holy grail of shipping documentation – incredibly valuable but out of reach till now. Only 0.1 percent of original bills of lading are digitised today but with an end-to-end SaaS solution via TradeLens now available for finance transactions, original bills can move to paperless processes.
During this completed shipment, all associated documentation was shared among the parties via the TradeLens platform including the electronic bill of lading directly from the ocean carrier Sealand – a Maersk company, the commercial invoice, certificates of origin and analysis as well as the bank collection documents.
"Trade between proximate markets is often encumbered by paperwork, leading to delays and higher costs," says Sanjay Tandon, Regional Head of Product Management, Global Trade and Receivables Finance, Asia Pacific, HSBC. "Removing paper from the process should not only increase the efficiency and velocity of trade but also enhance the appeal of the letter of credit as a trade finance solution by minimising documentary complexity."
Syngenta is estimated to have saved 10 days in document processing lead time.
"The need to eliminate the physical hand-off of documentation has accelerated during the pandemic," says Michael White, CEO and Head, TradeLens. "At the same time, the drive to modernise infrastructure using digital-first technology has never been more critical. The TradeLens eBL for trade finance is the next step to make trade easier, providing paperless trade tools for clients who can realise immediate cost savings. We are excited to be working with HSBC and other banks to bring this solution to market."
The TradeLens ecosystem consists of more than 700 organisations including major ocean carriers representing over two-thirds of the global market that is integrated with leading trade finance banks operating in multiple countries to help modernise the trade finance industry.
The platform has already tracked more than 55 million container shipments, 4.7 billion events, and more than 25 million published documents.