Impex

CargoSmart completes proof-of-concept with eTradeConnect to demonstrate value in cross-network collaboration for trade finance

CargoSmart, a leading shipment management technology solution provider, announced the successful completion of a proofof-concept with eTradeConnect, a multi-bank blockchain consortium in Hong Kong facilitated by the Hong Kong Monetary Authority (HKMA).

Published

6 days ago

November 6, 2019

CargoSmart Limited

CargoSmart completes proof-of-concept with eTradeConnect to demonstrate value in cross-network collaboration for trade finance

The engagement explored ways to improve global trade through enhanced collaboration among shippers, banks, terminal operators, and ocean carriers, with applications to be further developed once the Global Shipping Business Network (GSBN) is formed.

CargoSmart and eTradeConnect have successfully completed the proof-ofconcept facilitated by PwC, with banks and ocean carriers including Bank of China (Hong Kong) Limited, The Bank of East Asia Limited, HSBC, Standard Chartered Bank (Hong Kong) Limited, COSCO Shipping Lines, and OOCL respectively.

The proof-of-concept was designed to validate the hypothesis that linking supply chain data with trade finance transactions can provide enhanced transparency, traceability, and efficiency for member banks and their trade finance customers.

Under current practice, in order to apply for financing services, companies are required to provide banks with shipping documents for validation, which takes significant time.

The proof-of-concept connects two blockchain networks to exchange information under a strong data governance model. With the consent of its customers, banks in the eTradeConnect network would be allowed to access relevant historical records provided by ocean carriers and terminals.

Banks would be able to shorten the customer validation process, with a better understanding of customers’ backgrounds and with real-time, credible shipment event data. The proposed solution intends to accelerate the document validation and trade finance process.

In addition, eTradeConnect member banks will be able to leverage trusted data to streamline their trade finance approval operations, improve their risk management, and enhance their abilities to extend credit to small and medium enterprises (SMEs). It will become easier for borrowers to meet their funding needs and to seize more business opportunities.

Mr. Andy Tung, Co-Chief Executive Officer of OOCL, said “Finding ways to improve the level of efficiency in how the shipping industry exchanges information and documents has always been a monumental challenge. The success in this proof-of-concept is a very positive direction forward to not only tackle this challenge head on, but to take it a step further by broadening the scope of stakeholders such as financial institutions to be a part of this open and transparent digital ecosystem. We certainly look forward to seeing more of these kinds of forward thinking technologies and collaborations being implemented for the collective good of all stakeholders.”

Digital transformation has swept across many industries in recent years, often in digital silos and mostly without cross-industry outreach. “The exchange of trusted and immutable data enabled by blockchain gives rise to a seamless and secured linkage across the global trade and financial sectors. The convergence of both worlds will unleash enormous opportunities for global trade and give impetus to international economic growth,” said Mr. Lionel Louie, chief commercial officer of CargoSmart.

“The proof-of-concept with eTradeConnect has demonstrated the power of trusted networks. CargoSmart will continue to bridge the shipping industry with other sectors for supply chain excellence to create value for all stakeholders.”

As the proposed counterpart of eTradeConnect, the GSBN will be a not-for-profit organization once it is formed after all applicable regulatory and antitrust approvals have been obtained.

The GSBN will work with authorities to comply with all applicable regulations concerning information handling and data privacy, and develop standards in this new area of business-to-business data exchange. Upon official formation, the organization will operate a data exchange platform for supply chain participants around the world.

The platform is expected to follow strong data governance while data contributors retain control of their data. The platform will also be transparent and fair to encourage participation by all stakeholders.

Mr. Eric Ip, Group Managing Director, Hutchison Ports, said, “The successful completion of a proof-of-concept with eTradeConnect marks a positive beginning of a collaboration between carriers, terminals and banks to explore new products and value propositions for trade finance. We are excited about the potential benefits this can bring to the supply chain. Once GSBN is established, we are confident future members will benefit from its strong data governance and trusted transactions will help simplify trade for end customers.”

The proposed connection between the GSBN, once formed, and eTradeConnect, facilitated by HKMA, is an important step towards unlocking the value of the digitalization of trade finance. It is hoped that the proposed connection will pave the way with forward thinking financial regulators in Asia with a similar approach towards Fintech.

Ms. Teng Linhui, General Manager of Transaction Banking Department of Bank of China (Hong Kong) said, “BOCHK has always been committed to enhancing its financial service capabilities by using innovative technologies, and promoting its cooperation with business partners to digitalise the trade ecosystem. We are pleased to cooperate with CargoSmart and banking peers to foster the development of trade finance infrastructure in Hong Kong. Seamless logistics is a key element of the trade process. We believe that linking eTradeConnect with a shipping network not only helps verify trade transactions and reduce financing risk, but also improves customer satisfaction by streamlining the process. Going forward, we will continue to participate in optimisation projects of eTradeConnect, and provide high quality, convenient and efficient services for our customers.”

Ms. Jeanny Ip, Head of Global Trade and Receivables Finance, Hong Kong and Macau, HSBC, said, “HSBC is committed to transforming and digitising trade to make it faster, safer and more efficient. As one of the co-funding banks supporting the eTradeConnect platform, we are delighted to participate in the proof-of-concept which will help build a global trade ecosystem and further simplify trading processes for our clients. Based on the feedback we obtained from previous eTradeConnect pilot transactions, HSBC sees the need and demand for a single platform where clients can facilitate cross-border trade. Clients are telling us that they want a more comprehensive customer journey, one that removes duplication. This is a win-win for all participants of international trade.”

“As a leading global trade bank, Standard Chartered is highly dedicated to the digitisation of trade, in order to enhance the client experience as well as the efficiency and transparency of global trade. With the success of the proof-of-concept that represents a truly digitalised process, banks and clients are no longer restricted by physical or electronic documents, rather shipment data are treated as individual data points that can be exchanged within client’s ecosystem, reimagining client experience while improving banks’ operation and credit processes,” said Mr. Biswajyoti Upadhyay, Head of Transaction Banking, Hong Kong, Standard Chartered Bank (Hong Kong) Limited.

Mr. James Chang, PwC China Consulting Leader, said, “The digital economy is blooming and the trade ecosystem is an essential part of the transformation. We are excited to be part of this crossindustry collaboration, which is an example that demonstrates our commitment to innovation, technology and creating value by facilitating industry collaboration.”

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Impex

Retail imports to see final tariff-driven surge of the year

Imports at the nation’s major retail container ports are expected to see their final surge of the year this month ahead of new tariffs set to take effect in December, according to the Global Port Tracker report released by the National Retail Federation and Hackett Associates.

Published

22 hours ago

November 11, 2019

National Retail Federation – USA

Retail imports to see final tariff-driven surge of the year. Image: Pexels

“Retailers are highly competitive, but the ability to compete has been challenging this year because of the uncertainty of the trade war and continued tariff escalation,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Retailers are encouraged by reports that China and the United States have agreed to remove at least some of the existing tariffs once a ‘phase one’ deal is signed. We are eager to see concrete evidence that the trade war is coming to an end with a final deal that removes all tariffs.”

President Trump announced tentative agreement on a partial trade deal with China last month, but officials are still working on the details and have not announced a date or location for the measure to be signed. An October tariff increase was canceled and news reports this week indicate that some tariffs could be removed, but there has been no word on a new round of tariffs on consumer goods currently scheduled to take effect December 15.

NRF will host a news conference next week in Washington where officials from the Port of Los Angeles and other groups will discuss the impact of the trade war.

“Industry planning is in a state of confusion with the on-again, off-again tariff increases and the widening of trade disputes,” Hackett Associates Founder Ben Hackett said. “Where is all of this leading us? As long as consumer spending remains relatively stable, economic growth – despite being weaker – will keep the country on track for the next year.”

U.S. ports covered by Global Port Tracker handled 1.87 million Twenty-Foot Equivalent Units in September, the latest month for which after-the-fact numbers are available. That was up 0.2 percent year-over-year but was down 4.7 percent from August, when imports saw their second-highest level on record – 1.97 million TEU – ahead of tariffs that took effect September 1. A TEU is one 20-foot-long cargo container or its equivalent.

October was estimated at 1.93 million, down 5.2 percent from last year’s record 2 million TEU. November is forecast at 1.96 million TEU, up 8.3 percent year-over-year and tying last December and this July for the third-highest number of containers in a single month. But imports are expected to fall to 1.78 million TEU in December, down 9.2 percent from near-record numbers last year ahead of scheduled tariffs that were later postponed. The expected drop from November will come as December’s tariffs take effect, but the month historically sees a falloff in imports because most holiday merchandise has already arrived by that point.

The first half of 2019 totaled 10.5 million TEU, up 2.1 percent over the first half of 2018, and 2019 is expected to see a new annual record of 22 million TEU. That would be up 1 percent from last year’s previous record of 21.8 million TEU.

January 2020 is forecast at 1.85 million TEU, down 2.3 percent from January 2019. February – traditionally the slowest month of the year because of Lunar New Year factory shutdowns in Asia – is forecast at 1.59 million TEU, down 2.1 percent from a year ago. March is forecast at 1.76 million TEU, up an unusually high 9.1 percent because of fluctuations in the Lunar New Year calendar.

Impex

Shipping Lines encouraged to bring ease to doing business n Ghana’s Ports

Ghana went down by four places to 118 in the latest World Bank ease of doing business ranking.

Published

4 days ago

November 8, 2019

Ghana Ports & Harbours Authority

Shipping Lines encouraged to bring ease to doing business n Ghana’s Ports. Image: Pixabay

Ghana went down by four places to 118 in the latest World Bank ease of doing business ranking. The country dropped from 114 in 2019 to 118 in 2020 for the World Bank flagship publication on the ease of doing business among 190 economies.

In efforts to access easy and cost effective ways of doing business at Ghana’s Ports, Eye on Port this week engaged experts from major stakeholder agencies in the port trade to access the role of the shipping lines and their impact on cost efficiency and ease of doing business.

Speaking on Eye on Port live interactive panel discussion, Adam Imoru Ayarna, Executive Member of the Ship Owners and Agents Association of Ghana said the shipping lines play significant roles in the maritime trade by transporting goods from different countries into Ghana but bemoaned the poor time consciousness of the Ghanaian trader and other port facilities.

“What I have seen in Ghana is we are not mindful of our time and that is the beginning of all failures. Over the period there have been chops and changes in the industry which does not really help,” he submitted.

Varied exchange rates

Fred Asiedu Dartey, Head of Freights and Logistics at the Ghana Shipper’s Authority and Eddy Akrong, Executive Member of the Ghana Institute of Freight Forwarders, on their turn complained that shipping lines have assumed the autonomy to peg their own exchange rates making it expensive for importers to clear their cargoes and adding to the increasing cost of doing business.

“What we found out is that even though the Bank of Ghana has given a certain exchange rate for which government revenue and other charges are been used to apply, the Shipping Lines apply varied rates,” Fred Asiedu Dartey revealed.

Off Weekends?

The two whose outfits represent the importing public also lamented that shipping lines are failing to work on weekends even though efforts have been put in place to ensure that Ghana’s Port operates 24 hours and 7 days yet the Shipping Lines charge demurrage which includes weekends.

“Thankfully now we have a port that operates 24/7 and you will find out that Shipping Lines operate 8am to 5pm from Mondays to Fridays so if there are things to be done over the weekend the Shipping Lines offices are closed.

However, if the particular consignment had gone on demurrage then the demurrage continues to count including the weekends,” Asiedu Dartey added.

Adam Imoru Aryana, however, responded that the Shipping Lines as private businesses would have to make a business analysis to find out whether it makes commercial sense to open its offices on weekends.

“This is private business so if we have to change anything we have to look at the dictates of the business and see whether it makes commercial sense because serving our customers is also very critical,” he stated.

He revealed that during a pilot programme in 2014/2015 by customs to operate 24/7 Shipping Lines opened on weekends but had a poor patronage.

Adam Imoru Aryana suggested that before looking at the issue of working on weekends other players in the clearance chain should prioritise working on time so that there will not be need for weekend overtime.

“Let us look at the whole chain. What are we doing from 8 am to 11 am? If we can close that gap, there will be no need to work during weekends.”

Decoupling from customs

Eddy Akrong criticised the current system where Shipping Lines only release cargo after customs compliance has been done and called for decoupling of the two activities.

“When we do a declaration and we pay duties it goes through customs compliance. Until customs compliance is done the Shipping Lines will not release your goods. Why should that be so? I have a contract with the Shipping Line to carry my goods to Ghana so once I come to Ghana and have my bill of lading and I walk to them, they should give me a release. It should not be tied to customs compliance,” he articulated.

Late refunds

Fred Asiedu Dartey again called on Shipping Lines to make their container deposit refund system transparent and swift to reduce the cost of trading and ease of doing business.

“You will need to make a deposit before carrying the container out of the port but when the container has been returned the refund mechanism is not straightforward. A lot of the times when you have to pay the deposit you pay it upfront, but when refund has to be made it takes one week or two weeks. That is money locked in there,” he complained.

His assertion was corroborated by the Ghana Institute of Freight Forwarders.

But Ayarna admitted to an administration challenge that does not make it possible for Shipping Lines to give out refunds instantly.

“If it is going beyond one week then it is a challenge. It is an administrative challenge that needs to be looked at,” he said.

Avoid demurrage

He emphasized that Shipping Lines are not interested in demurrage but quick turnaround time for their vessels so importers should not entertain accruing demurrage and abide by the terms in their contractual agreements to clear their goods within the stipulated time frame.

“People say Shipping Lines are earning demurrage but that is not what we are in the business for,” he stressed.

Fred Asiedu Dartey said the Ghana Shippers’ Authority has been educating importers to avoid the payment of demurrage as the cost involved in the payment of demurrage are so high.

He revealed that Ghanaians paid in excess of USD 96 million in 2016 alone but there have been improvements recently. He revealed that a workable relationship is in place between the Ghana Shippers Authority and the Ship Owners and Agents Association of Ghana, to improve the current difficulties.

“We may not be clothed with the powers as of now to attempt to crack the whip, however, all of the issues of commercial interest that border the shipper who is the ultimate bearer of the burden are the issues we bring to the attention of the shipping lines,” he disclosed.

Container Shipping Lines

Announcing direct-from-shipper loads, enabling carriers to access 10x more spot freight

Convoy has launched direct-from-shipper loads nationwide, a new capability that provides carriers access to 10x the amount of spot freight from America’s largest shippers.

Published

6 days ago

November 6, 2019

CONVOY

Announcing direct-from-shipper loads, enabling carriers to access 10x more spot freight. Image: CONVOY

Convoy has launched direct-from-shipper loads nationwide, a new capability that provides carriers access to 10x the amount of spot freight from America’s largest shippers.

One of the biggest problems that carriers face is having to call and work with many different brokers to find the best next load to haul. It is very time consuming and often results in waste in the form of empty miles as carriers aren’t always matched to the load that is most ideal for their truck.

This happens because brokers have traditionally acted as filters between shippers and carriers. A broker will bid on some of the spot loads that they think they can make a profit on and then win a subset of that, often amounting to 10% or less of the total. Carriers, in turn, only see that small subset of loads when working with that broker.

It doesn’t have to be this way. Because Convoy was built from the ground up as a digital freight network, we enable carriers to bypass these filters. With this launch, our automated systems make every spot shipment available right alongside traditional loads in the Convoy app. This ensures carriers can efficiently find loads to keep their trucks full and shippers’ spot loads are hauled to their destination.

Image: CONVOY/ Announcing direct-from-shipper loads, enabling carriers to access 10x more spot freight

ENSURING COVERAGE AND QUALITY FOR SHIPPERS

Participating shippers are assured of high-quality coverage for their spot freight even in difficult situations like natural disasters or short notice. For example, when Hurricane Dorian struck in August, direct-from-shipper loads accounted for 75% of the spot shipments delivered in Florida through the Convoy network. Additionally, loads are always hauled by high-quality and compliant carriers in the Convoy network who are 15% safer than the industry average.

HOW IT WORKS: ACCESSING MORE LOAD OPTIONS WITH NO PHONE CALLS

For the first time, carriers can see and bid on all the spot loads from shippers within a single app. Because these loads are coming directly from the shippers, they show up as bid only in the Convoy app. Carriers are in control throughout this process, as they can bid on individual loads or use our automated bidding to set a price for those that match their preferences. Participation requires no additional work and there are no calls or negotiations to handle. Direct-from-shipper maintains the simplicity that carriers have in securing work with Convoy today but with substantially increased reach.