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Multi-technology fully digital cross-border trade is here

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).

The parties involved

The transaction

  1. The trade was executed via end-to-end data flow from:
  2. the sales of goods contract in Chinsay’s (ICP) platform
  3. the letter of credit management in Voltron
  4. the shipping / trade documentation in CargoDocs
  5. Key steps:
  6. Rio Tinto and Cargill collaborated on Chinsay’s ICP to create, issue, approve and digitally sign commodity contracts
  7. Key contract attributes (data) from ICP flowed into Voltron, where Letter of Credit (LC) issuance was completed, involving one single-source LC (data) digitally transmitted across the platforms
  8. Rio Tinto, Cargill, ship agent, shipowner, HSBC and BNP Paribas collaborated via CargoDocs to draft, approve, sign, issue, transfer and electronically present the electronic Bill of Lading (eB/L) plus upload relevant supporting documents, with data flowing from and to Voltron
  9. 100% of documents required under the LC were presented electronically, with one single-source eB/L plus supporting documents digitally transmitted across the platforms

Banks involved carried out all actions via Voltron, due to interfaces and seamless data flow between all platforms; data from ICP and DocEx flowed through to facilitate this.

The corporates commented:

  • 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.”
  • 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.”

CTMfile take: We are inching closer to fully digital cross-border trade from acceptance of key commercial terms through to delivery.

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This item appears in the following sections:
Trade & Counterparty Risk Mitigation
Trade Finance
Trade Transaction & Payment Services

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