13 August 2019

Industry first fully integrated paperless trade transaction

  • Marks next step in the evolution of Voltron, bringing the platform closer to widespread commercial reality
  • Introduces two new technologies, supported in Singapore, that increase speed, accuracy and cost-efficiency of negotiation and the electronic Bill of Lading (eB/L) process.

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:

  • 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.

Note to editors

About BNP Paribas in Asia Pacific www.apac.bnpparibas
In Asia Pacific, BNP Paribas is one of the best-positioned international financial institutions with an uninterrupted presence since 1860. Currently with over 18,000 employees* and a presence in 13 markets, BNP Paribas provides corporates, institutional and private investors with product and service solutions tailored to their specific needs. It offers a wide range of financial services covering corporate & institutional banking, wealth management, asset management, insurance, as well as retail banking and consumer financing through strategic partnerships.

Worldwide, BNP Paribas has a presence in 72 markets with more than 202,000 employees. It has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. Asia Pacific is a key strategic region for BNP Paribas and it continues to develop its franchise in the region.
*excluding partnerships

About Cargill
Cargill's 160,000 employees across 70 countries work relentlessly to achieve our purpose of nourishing the world in a safe, responsible and sustainable way. Every day, we connect farmers with markets, customers with ingredients, and people and animals with the food they need to thrive.

We combine 153 years of experience with new technologies and insights to serve as a trusted partner for food, agriculture, financial and industrial customers in more than 125 countries. Side-by-side, we are building a stronger, sustainable future for agriculture. For more information, visit Cargill.com and our News Center.

About Chinsay
Founded in 2000, Chinsay is the leading global provider of contract automation systems for the commodities and freight markets. Its Intelligent Contract Platform (ICP) enables digitalisation of contract data sets across the supply chain. As a pure software-as-a-service platform, with the ability to support API integration, it has one of the fastest deployment times in the industry. The Intelligent Contract platform captures data during the contract creation process, providing a Golden Copy as a result of collaboration between all involved parties.

Chinsay's concept of ‘one-time deal capture’ enables integration with risk management, accounting, legal and operational functions. This results in cost savings, increased efficiencies, improved security and risk control. ICP provides companies with the opportunity to make informed, data-driven business decisions.

Chinsay partners with clients and other technology vendors to increase efficiency and improve security and risk controls. Through industry-leading product discovery and devops practices, Chinsay rapidly and continuously adapts its software precisely to our clients’ needs. Leveraging Microsoft Azure facilities for end-to-end encryption allows us to offer the highest possible data security to our clients.

About essDOCS
essDOCS enables paperless trade. Its solutions digitize and automate paper-heavy processes, including: online creation/approvals/management of all export documents (CargoDocs DocHub), data extraction and structure from paper documents and back-office automated checks (CargoDocs Auto-Document Processing), end-to-end eDocs management for key trade documents such as electronic Bills of Lading and Warehouse Warrants (CargoDocs DocEx) and application/issuance of electronic Certificates of Origin (essCert).

Over 44,000 companies, ranging from 31% of the Fortune Global 100 to innovative SMEs, use essDOCS solutions across 203 countries.

About HSBC Singapore
HSBC Group’s history in Singapore dates back to 1877 when its founding member, The Hongkong and Shanghai Banking Corporation Limited, opened its first branch on the island. A qualifying full bank, HSBC in Singapore offers a comprehensive range of banking and financial services including retail banking and wealth management; commercial, investment and private banking; insurance; forfaiting and trustee services; securities and capital markets services. One of the earliest banks to establish in Singapore, HSBC today is a prominent player in Singapore's financial services sector serving the banking needs of multi-national corporations, home-grown businesses, private banking clients, institutional and retail customers. In May 2016, HSBC locally incorporated its retail banking and wealth management business in Singapore and established, HSBC Bank (Singapore) Limited. Till this day, HSBC's flagship office remains at the original Collyer Quay site where its first branch was set up. HSBC Singapore has a retail network of 13 branches (comprising 10 dedicated HSBC Premier Centre, 2 HSBC Jade Centre and a Premier International Centre) and many locations across the island providing self-service terminals.

About The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding member of the HSBC Group, which serves our customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. The Group serves customers worldwide in 65 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,751bn at 30 June 2019, HSBC is one of the world's largest banking and financial services organisations.

About Rio Tinto
As pioneers in mining and metals, we produce materials essential to human progress. Our long history is filled with firsts. We’ve developed some of the world’s largest and best quality mines and operations, and our people work in around 35 countries across six continents. Aluminium and copper, diamonds, gold and industrial minerals, iron ore, coal and uranium our materials make up the world around us. You will find them in smartphones, planes, cars, hospitals and throughout your home.

About Voltron
Voltron is a blockchain-based open industry platform to create, exchange, approve, and issue Letters of Credit on Corda, R3’s blockchain platform. It is initiated by eight founding member banks, including Bangkok Bank, BNP Paribas, CTBC, HSBC, ING, Natwest, SEB and Standard Chartered, in partnership with Bain, CryptoBLK and R3. Voltron will improve the trade finance process by simplifying letters of credit, delivering shorter settlement times, instant discrepancy resolution and simplified sanctions screening. Voltron is inviting banks, technology partners, and corporates to join the network.