DBS has announced the completion of Singapore’s first live bunker delivery financing pilot transaction, which was done by way of an electronic bunker delivery note (BDN).
The transaction was completed by DBS in partnership with marine fuels supplier TFG Marine and maritime players Ocean Network Express (ONE) and Ascenz, with support from the Maritime and Port Authority of Singapore (MPA).
TFG Marine is a joint venture entity of commodity trading company Trafigura Group and ship owning companies Frontline and Golden Ocean Group.
ONE and Ascenz provided the underlying technology to digitalise the BDN in the pilot transaction.
The digital BDN bypasses the need to deliver a physical BDN to shore before a trade finance application can be submitted - a process that can typically take a few days to a week. According to DBS, the digitalised process will enable future clients to obtain financing for their underlying trade in under two hours.
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In addition, the digital BDN is expected to mitigate against the risk of fraud in the bunker industry, as counterparties are now able to ascertain trade data at source. This is done by leveraging the Mass Flow Meter (MFM) system for bunkering electronically.
“The digitalisation of bunker delivery notes is one of many pivotal steps necessary to transition Singapore’s bunkering sector into the digital era and to ensure our port and shipping industry is future-ready,” says Sriram Muthukrishnan, group head of trade product management at DBS.
Kenneth Lim, assistant chief executive (industry) of MPA, says, “MPA has been accelerating the maritime industry’s digital transformation efforts, and these include digitalisation of the bunkering sector, a vital part of our hub port service offering. The adoption of digital documentations will help stakeholders across the value chain move towards more efficient and transparent operations that are aided by data-driven decision making. We welcome more of such private-public collaborations facilitated by our regulatory sandbox, that will help Singapore remain the world’s leading bunkering port.”
The live pilot transaction comes on the back of a joint agreement signed between DBS and MPA in 2020, to accelerate the digitalisation and innovation of financial services and payments across Singapore’s maritime industry.
The collaborative areas which MPA and DBS have identified include streamlining and enabling payment transactions between the users of maritime services to expedite end-to-end payment life cycles, as well as digitalising supporting documents for financing. MPA and DBS will also facilitate innovation and creation of potential new financial solutions with the startups ecosystem for the maritime sector.
For the next phase of development, there are plans to integrate the use of digital BDNs with the Singapore Trade Data Exchange (SGTraDex) in 2022.
Photo: Bloomberg
