TradeLens™ provides a platform for Syngenta and HSBC’s paperless trade finance transaction
Recently, TradeLens™, the digital platform launched by IBM (NYSE: IBM) and A.P. Moller – Maersk (MAERSKb.CO), announced it has successfully completed an innovative letter of credit transaction between HSBC and Syngenta using an electronic bill of lading based on blockchain technology. The transaction, involving a shipment from South Korea to Bangladesh, was executed through a fully paperless process. This milestone marks a significant step forward in modernizing trade finance and supply chain efficiency across the global trade ecosystem.
The electronic bill of lading has long been considered the most elusive element in shipping digitalization, but that is clearly changing. To date, only 0.1% of original bills of lading are digital. With the end-to-end SaaS solution provided by TradeLens™, original bills of lading are now entering a paperless circulation model.
During the business pilot, all relevant documents were shared among all parties, including the issuing bank, through the TradeLens™ platform. The digital documents included the electronic bill of lading directly from the ocean carrier Sealand Asia Maersk, commercial invoice, packing list, certificate of origin, inspection report, as well as bank collection documents and the bill of lading. All documents are blockchain-backed, and once uploaded to the platform, they can be viewed by authorized relevant parties.
Syngenta estimates that the document processing time for this shipment was reduced by 10 days as a result of this pilot. This significantly enhanced Syngenta's "speed to customer," a key value driver for the company's business. It also helped avoid potential additional costs such as demurrage and detention charges at the destination port caused by document delays.
Now, regardless of scale or use case, the electronic bill of lading technology developed by TradeLens™ offers a solution for all shippers. From bill of lading issuance in the ocean carrier's system, to document presentation processing at the bank, and final bill of lading surrender, "TradeLens™ eBL Trade Finance" directly digitizes the entire trade finance process.
Sanjay Tandon, Head of Product Management, Global Trade and Receivables Finance, Asia Pacific at HSBC, said: "Trade between proximate markets can often be constrained by the speed of documentary processes, leading to delays and increased costs. Going paperless not only enhances trade efficiency and speed but also minimizes the complexity of document handling, thereby increasing the attractiveness of letters of credit as a trade finance solution. Establishing interoperability and standardization between different blockchain platforms is key to bringing more stakeholders into the global trade digitalization journey."
Michael White, CEO and Head of TradeLens™, stated: "During the COVID-19 pandemic, the need to eliminate physical handovers of documents became more urgent, and the importance of leveraging digital-first technologies to drive infrastructure modernization has never been greater. 'TradeLens™ eBL supporting trade finance' is our next step in making trade easier, aiming to provide customers with paperless trade tools that deliver immediate cost savings. We are pleased to collaborate with HSBC and other banks to bring this solution to market."
TradeLens™ eBL provides shippers, cargo owners, and freight forwarders with a simplified and secure process for issuing, transferring, and surrendering original bills of lading. TradeLens™ eBL is now available for trade finance transactions.
Currently, the TradeLens™ ecosystem brings together over 700 organizations, including major shipping lines representing more than two-thirds of the global market. It also collaborates with leading trade finance banks across multiple countries, jointly committed to modernizing the trade finance industry. The platform has tracked over 55 million container shipments, 4.7 billion events, and more than 25 million published documents.
AboutTradeLens™
TradeLens™ is an open and neutral industry platform underpinned by blockchain technology, supported by key players in the global shipping industry. The platform facilitates efficient, transparent, and secure information exchange to foster collaboration and trust across the global supply chain. For more information, please visit https://www.tradelens.cn/
About HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide through offices in 64 countries and territories across Europe, Asia, North America, Latin America, the Middle East, and North Africa. With assets of US$2,969 billion as of 30 September 2021, HSBC is one of the world’s largest banking and financial services organizations.
