Industries, post-trade workflow automation platform
Commodity trading is transforming and adapting to change, with digitisation being at the heart of it. As digital technologies become more powerful, they will continue to transform the status quo and create new business opportunities.
Digital technologies, such as blockchain, have attracted serious interest from some of the biggest names in commodity trading that have seen their margins decrease over the past couple of decades. By streamlining processes, both trade capture and operations time can be reduced significantly, increasing margins and reducing unwanted errors. Safe and efficient document exchange and communication, along with increased transparency among participants could make fraud much easier to detect, even eliminate it, significantly reducing the risk for liable parties.
Furthermore, a digital ecosystem which involves all participants, such as agents, inspectors, shipping companies and banks, and also connects all phases, from upstream to downstream, has the ability to minimise most of the major issues that are faced by the industry today.
Despite the rapid technological advancements of the last decades, shipping still remains one of the most traditional industries and many of the processes followed are very much outdated.
The majority of shipping transactions still involve a vast amount of paperwork, which need to pass through various parties, most of the time by courier or fax, making the procedure very lengthy, time-consuming and of course, open to errors and fraud. These documents are crucial for the delivery, payment and financing of cargoes, so it is important to create new processes that can secure their authenticity and increase the efficiency. Reducing supply chain barriers to trade could increase GDP by nearly 5% and trade by 15%, simply by improving border administration, transport, communications infrastructure and related services.
Tradeline is a great way to improve these key points significantly. It can be used to track and trace document, as well as insuring their authenticity. These in turn can be easily communicated to port authorities and other relevant parties. Additionally, agents and inspectors can drastically improve their workflow with minimal efforts and better transparency.
It is estimated that almost 90 percent of world trade depends on trade finance. One of the biggest pain points of trade finance transactions is the large volume of paperwork that still consist of much of the information flow, something that increases cost and reduces efficiency, both for banks and their clients. This structure has been in place for hundreds of years, with fairly little change in the process and in the substantial amount of physical paperwork being shuffled back and forth. At each different stage, all the paperwork must be confirmed between various parties, in order to ensure its accuracy and its authenticity.
Blockchain gives the opportunity to streamline this process, and tackle security and interoperability issues between different systems, which have been the main issues against digitisation in the past. With increased transparency between all involved parties, it eliminates the need for multiple copies of the same document stored on databases across various entities, and the need to print and mail these documents across regions and continents. Furthermore, it can speed up the settlement time of transaction (which currently takes days), and ultimately unlock capital that would otherwise be tied up waiting to be transferred between parties.