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The Customer

Syngenta is a Switzerland-based agro-tech company whose business and employees have helped millions of farmers in more than 100 countries to grow safe and nutritious food, while taking care of the planet.
Syngenta helps farmers face the challenges of global warming, soil protection and improvement, as well as enhancing biodiversity. They also act and respond to society’s views on food and agricultural technology.
With their main products being seeds and crop protection solutions, the client’s top-line is over USD 28 billion.
Since most crop and soil protection solutions include pesticides, insecticides, and fertilizers and other chemical products; safety, speed, and ease (respectively) in shipping, is of the essence.

The Challenge

Syngenta imports cargo to Bangladesh from multiple countries. When importing to Bangladesh, they need a Letter of Credit to finance the transaction and comply with the local Bangladesh regulations.

The paper-based procedure until now would be as follows:

  1. The set of paper documents, which includes the Original Bill of Lading (OBL or BL), would be moved from the client’s operational base in Singapore to their bank in Singapore (HSBC)
  2. The bank in Singapore scrutinized the documents to ensure compliance with the letter of credit requirements and there were no discrepancies. After a successful review, the document set would be couriered to the importer’s bank in Bangladesh
  3. The Bank in Bangladesh would scrutinize the documents and on successful completion, share the documents with the importer
  4. Finally, the importer would ‘surrender’ the BL by physically passing it to the carrier to secure the release of the cargo. ). The BL helps secure the release of cargo (without it, the cargo isn't released).
  5. If the scrutiny done by either of the banks identified an error, the discrepant documents would be sent back to Syngenta’s Singapore base and they would spend time revising and then resending the documents.

The entire process, described above, was long and cumbersome. It would generally take around 20 – 25 days. If the set of documents, which includes the BL, was delayed, the importer would be unable to surrender the BL to the carrier on time. The importer sometimes face additional costs related to containers not being picked up from the port and returned on time – detention and demurrage, and potentially have inventory management issues or even loss of sales.

This was especially true of cargo coming from nearby locations with a short transit time (for e.g., India) or during times when there were any errors in the documents or BL, resulting in revisions when the shipment was still on water.

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The TradeLens Solution for Syngenta’s Intra-Asia Operations, via Sealand

Since the client had been working with Sealand as a part of the Maersk Group for a long time, we were aware of and had discussed this documentation-related pain point. We shared TradeLens as a potential solution to digitize their trade and finance-related documentation.

TradeLens is a standard, industry-supported, end-to-end digital solution that provides shippers, cargo owners and freight-forwarders a streamlined and secure process that enables the issue, transfer and surrender of original bills of lading in electronic formats. By digitising the entire process, it eliminates the burden of paper documents. In addition to electronic OBLs or eBLs, TradeLens also allows for digital collaboration with multiple parties including the sharing of trade documents.

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With TradeLens, the client was able to digitize the journey of the documents –

  1. Issuance of the eBL
  2. Uploading of trade documents
  3. Sharing the eBL and trade documents, from Syngenta, to the bank in Singapore
  4. Sharing the eBL and trade documents, from the bank in Singapore, to the bank in Bangladesh
  5. Sharing the eBL and trade documents with the importer
  6. Surrender of the eBL by the importer to the carrier

The impact of using this solution were several-fold:

The time taken to send across the documents from one end of the supply chain to the other was reduced drastically.  By reducing the time taken to send, verify and process documents, TradeLens helped release the cargo to the importer according to schedule. The importer was able eliminate the risks of Demurrage & Detention due to delayed documentation. So, cargo was safe, and travelled through, without the problems of delays due to documentation issues. When there were documents that needed to be rectified, the TradeLens solution allowed for changes to be made in minutes, not days.

TradeLens isn’t just a documentation solution-- it’s a blockchain-based solution built to digitize every process weighed down by physical paper. By connecting multiple carriers, and major banks, Trade Finance transactions can move faster and smoother, while being greener than the traditional paper process.

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The Results

Paperless documentation made the execution of the transaction easy, painless, and quick .
Overall, the entire documentation process was shortened by an estimated 10 to 14 days. 
In general, the three main benefits mentioned by the client from using TradeLens were:

Cost savings:
Being on time with documentation reduced the risks of inventory spikes or delayed revenue recognition because of delayed cargo.

Time savings:
Speed to customer is a key value in this client’s business. By using the TradeLens eBL they were able to ensure a secure process that eliminated document delays and allowed them to provide their customer with the product faster.

Amount of effort required:
The Digitization and synchronisation of both banking and shipping document flows via TradeLens helped the client eliminate the administrative time required to maintain, send, and rectify paper documents. 

Via TradeLens, Sealand had the opportunity to realize immediate benefits for Syngenta.
According to Sanjay Tandon, HSBC’s Regional Head of Product Management, Global Trade and Receivables Finance for Asia Pacific, 

Trade between proximate markets is often encumbered by paperwork, leading to delays and higher costs. Removing paper from the process not only increases the efficiency and velocity of trade, but also enhances the appeal of the letter of credit as a trade finance solution by minimizing documentary complexity. Creating interoperability and standardization between blockchain platforms will be crucial in getting more stakeholders on board to digitize global trade.

Syngenta was able to digitize the presentation of documents under Letter of Credit issued by HSBC, view the Bill of Lading from Sealand as soon as it was published (and receive it as an eBL). Apart from this, they were also able to use the entire post-shipment portfolio of documents for destination release seamlessly and securely. All thanks to an underlying cutting-edge blockchain technology and infrastructure that connects the client’s supply chain ecosystem, including its banking partners.

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