Danish container shipping group Maersk Line has started offering trade finance to shippers in six US states after successful pilots in Europe and Asia and already has lent US$100m to customers.
Trials in Singapore, India, the Netherlands and Spain are now being followed up by a rollout of the programme to shipping customers in New York, New Jersey, Georgia, Texas, South Carolina, and Florida. Maersk aims to double lending to US$200m within 18 months.
Maersk Trade Finance’s digital platform offers pre- and post-shipping finance and electronic bills of lading for faster release of funds than a paper trail. The programme is open to all Maersk customers who are able to provide three years of audited financial statements, financial institution information, and ‘know your customer’ (KYC) documentation. The company told American Shipper, however, that it is targeting sectors such as manufacturers, refrigerated products, chemicals, apparel and textiles, and appliances.
“As the custodian of goods and the transport company carrying goods, we have access to more information than the banks and that’s what we are building on.” – Maersk global director of trade finance Vipul Sardana
Global director of trade finance Vipul Sardana told GTR, “The driver for us was looking at adjacent businesses and our goal in shipping was to simplify things for our customers. When we talk to customers, most of them say that our efforts are great but unless we are present in all parts of the value chain it doesn’t simplify global trade for them because they still have to go to banks to get financing.”
Simplicity vs security
Sardana said that customers have traditionally had to choose between simplicity and security. “If they don’t know a customer, they tend to go for LCs with banks. If they do then they will go for simplicity and are likely to use the open account option which is less secure,” he said.
“The future of credit in this world will eventually be decided by information in the value chain and not so much by balance sheets and what credit the applicant has achieved in the past. As the custodian of goods and the transport company carrying goods, we have access to more information than the banks and that’s what we are building on.”
Maersk says that its global footprint gives it access to market intelligence in places where its customers and their banks might not have access.