TradeLens, a digital platform launched by IBM and A P Moller - Maersk on Monday, announced the successful completion of an innovative letter of credit transacted with HSBC and Syngenta, using a digital bill of lading underpinned by blockchain technology.
A press release from A P Moller - Maersk said agrichemical product was shipped from South Korea to Bangladesh using an entirely paperless process.
This milestone signifies an essential step in modernising trade finance and supply chain efficiency across the global trade ecosystem.
Electronic bills of lading have been considered the holy grail of shipping documentation – incredibly valuable but out of reach until now. Today only 0.1% of original bills of lading are digitised, but with an end-to-end SaaS solution via TradeLens now available for Trade Finance transactions, original bills can move to paperless processes for all involved.
All associated documentation was shared among the parties via the TradeLens platform during this completed shipment, including the Letter of Credit issuing bank. Digitised documents included the electronic bill of lading directly from the ocean carrier Sealand – A Maersk Company, the Commercial Invoice, Packing List, Certificate of Origin and Certificate of Analysis, and the bank collection documents and the bill of lading - all underpinned by blockchain and visible to permissioned parties as soon as they were uploaded to the platform.
As a result of the shipment, Syngenta estimated savings of 10 days in document processing lead time. In addition, the release said that they significantly improved on their ‘speed to customer’, a key value in Syngenta’s business, and avoided extra costs due to delayed paperwork, like potential destination detention and demurrage costs.
The electronic bill of lading technology developed by TradeLens now provides a solution available to all shippers regardless of size or use case. The TradeLens eBL for Trade Finance digitises the trade finance process, from the issuance of the bill of lading directly from the ocean carriers’ systems, through the banking transactions, to the final surrender.
Sanjay Tandon, Regional Head of Product Management, Global Trade and Receivables Finance - Asia Pacific, HSBC, said 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.
According to Michael White, CEO and Head, TradeLens, the need to eliminate the physical hand-off of documentation has accelerated during the pandemic. 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.