Introduces two new technologies, supported in Singapore, that dramatically increase speed, accuracy and cost-efficiency of negotiation and the electronic Bill of Lading (eB/L) process.
Marks next step in the evolution of Voltron, bringing the platform closer to widespread commercial reality.
SINGAPORE, 13 August 2019 | News Announcement
Rio Tinto and Cargill, supported by HSBC Singapore and BNP Paribas, have successfully completed the first fully integrated paperless trade transaction in iron ore. The transaction involved Rio Tinto selling a bulk shipment of iron ore originating from Australia to China for a Cargill customer. Building upon the first fully-digitised trade finance transaction completed in November 2018, Rio Tinto and Cargill have gone two steps further by extending this across the full value-chain from acceptance of key commercial terms through to delivery. This was done by integrating with Chinsay’s Intelligent Contract Platform (ICP) and essDOCS’ Document Exchange platform (CargoDocs DocEx).
In using ICP, Rio Tinto and Cargill collaborated on a single platform to dramatically reduce the time it takes to create, issue, approve and digitally sign commodity contracts from several days to under two hours.
Seamless flow of key contract attributes to Voltron made the issuance of the Import Letter of Credit (LC) an efficient process for Cargill as the applicant and BNP Paribas as the issuing bank.
In using CargoDocs DocEx/DocHub, all relevant trade participants – namely Rio Tinto, Cargill, ship agent, shipowner, HSBC Singapore and BNP Paribas – collaborated on a single web-based platform to draft, approve, sign, issue, transfer and electronically present the eB/L, as well as upload relevant supporting documents, slashing trade document turnaround to hours as opposed to days/weeks.
The integration of these technologies into Voltron has, for the first time, allowed for a complete, uninterrupted transaction flow that connects data from Chinsay’s ICP and essDOCS’ DocEx platforms to Voltron’s trade finance blockchain.
The new transaction advances industry towards fully digitising cross-border trade, enabling:
Faster, more secure, trade flows which are simpler and more efficient.
Speedier and less manual LC issuance with the process being completed in less than two hours compared with 1-2 days for traditional, paper-based LCs.
Flexibility that allows for multiple drawings within one LC, instead of just one payment.
Increased accuracy as one single-source LC was digitally transmitted across the platforms.
Increased accuracy as one single-source eB/L was digitally transmitted across the platforms, enabling instant electronic transfer of title, with 100% of documents required under the LC presented electronically.
Faster documentation turnaround for the shipment, significantly reducing the time required to draft, approve, amend, sign, issue, transfer and present the full set of required documents, including the original eB/L.
Increased flexibility in liquidity management for the seller, resulting in working capital optimisation.
Innovation in practice
In bringing together the stakeholders involved, this transaction is a unique demonstration of innovation at work:
Rio Tinto and Cargill are dedicating time and resources to testing unproven technology with a view to building an industry leading capability.
HSBC Singapore and BNP Paribas as participants of the Voltron consortium, relay client experiences to ensure the platform provides the highest impact functionality.
Chinsay and essDOCS provide specialist capability in a niche part of the trade process.
Connecting all involved companies builds an ecosystem whereby each organisation benefits from the value provided by the others, and together all participants succeed.
Colin Hayward, CEO of Chinsay: “Our collaboration with Cargill and Rio Tinto earlier this year created the first-ever digitalised trade. We continued work with these companies and in partnership with them, along with HSBC, BNP, essDOCS and Voltron, just completed the first-ever paperless iron ore trade. The trade used our platform, ICP, a market-leading data capture platform, for negotiating and collaborating, both internally and externally on contract issuance. This is a unique example of vendors, global corporations and a bank consortium coming together for a ground-breaking initiative, which is significant in demonstrating the evolution of commodity markets.”
Lee Kirk, Managing Director for Cargill’s Metals business: “This is a significant, industry-defining solution which will evolve the trade process. From acceptance of key commercial terms through to delivery, the speed achieved from a fully digitalized trade enables us to better meet the needs of our customers across the globe. Innovation is a vital part of the Cargill DNA and we have always been strong supporters of digitalizing the trade process.”
Simon Farry, Vice President, Sales & Marketing for Rio Tinto’s Iron Ore business: “We are focused on utilising technology to improve the customer experience when they do business with Rio Tinto, such as reducing documentation turnaround times and simplifying processes. The successful conclusion of this pioneering project brings us one step closer to a future of fully digital cross-border trade.”
Zoran Lozevski, Head of Global Trade Solutions, Asia Pacific, BNP Paribas: “This fully integrated digital transaction further helps ensure trade flows are faster, more secure, simpler and more efficient and transparent. Following last year’s successful pilot, we broadened the scope to include contract management, making this a complete end-to-end import Letter of Credit proposition for our client, Cargill. We continue to work closely with our clients to make trade even easier for them.”
Iain Morrison, Head of Global Trade and Receivables Finance, HSBC Singapore: “Singapore continues to play its role in nurturing the technology which is enabling the evolution of trade finance. Building on the knowledge, relationships and expertise of the participants involved in this transaction, we are closing the gaps in making this a truly transformative product.”
Alexander Goulandris, co-CEO essDOCS: By combining the functionality of Voltron, Chinsay ICP and CargoDocs, we were able to provide Rio Tinto and Cargill a complete, paperless trade solution that digitized contract execution, trade finance and trade execution/documentation processes end-to-end. We see these types of cross-platform collaboration and integration as critical to delivering on the promises of paperless trade.”