In January 2020, Pole Star and TradeIX partnered up to enable the streamlining of maritime transactional processes and the securing of sensitive data. The partnership provides a fully automated vessel sanctions screening solution to the network’s member banks, their corporate clients, and the extended trade ecosystem, allowing organisations to increase the capacity and velocity of their transactions, whilst facilitating rapid decision-making in trade finance.
We sat down with Simon Ring, Global Head of Financial Markets Compliance at Pole Star, and Jeff Handler, Global Head of Special Projects & Network Adoption Strategy at Marco Polo to discuss what this partnership hopes to achieve in the current turbulent global market.
Jeff, tell us a bit about TiX and the work you do.
TradeIX is the core platform and application developer for the Marco Polo Network, which provides banks and corporates with easy to use, digital tools that make managing trade finance programs simpler and more cost effective. I oversee our Global Special Projects team, where we focus on identifying specific use cases where our propositions can provide additional value and benefits over the options available today.
Simon, could you tell us about Pole Star’s regulatory technology solution, PurpleTRAC?
In light of the current regulatory landscape, the ability to verify the location of a vessel and screen its ownership and management is crucial. PurpleTRAC allows users to configure their own unique compliance criteria, ensuring clear results in seconds and a compliance audit trail. Our unique hybrid-tracking solution incorporates AIS & Inmarsat data to provide the most robust and accurate geolocation data.
Which issues faced by the shipping industry do you aim to solve?
The shipping industry runs on razor thin profit margins, creating an environment where sound working capital management is essential for businesses to survive and thrive. At the same time, there is a huge lack of trade finance and working capital programs tailored to meet the industry’s needs, leaving even the world’s strongest performing companies without readily available, easy to manage financing options.
How has COVID 19 impacted the industry?
90% of world trade travels by sea, however since the beginning of the pandemic, shipping and port activity have constricted. As stated by the International Chamber of Shipping, “in this time of global crisis, it is more important than ever to keep supply chains open and maritime trade and transport moving.” Moreover, the shift to working from home has ground many banks’ documentary trade to a halt, which at a time when access to capital is more important than ever, underscores the need for digitally native programs that allow banks and their clients to operate in a paperless world.
Are there any joint solutions in the pipeline to address these challenges?
Three of the joint propositions available now which we feel will be of great benefit to the shipping industry include:
Marine (Bunker) Fuel Financing: Bunker fuel purchases constitute the largest operating expense for any ship owner/operator, with few financing options that work well for both buyers and suppliers. Our solution allows buyers and suppliers to access new working capital programs tailored to the unique transaction requirements, providing buyers with the ability to extend payment terms, and suppliers with early payments from buyers’ banks.
Port Services Disbursement Account Financing: Companies must pay for port agencies weeks in advance of service delivery so that these agencies can cover the costs of 3rd party providers needed to deliver their services. By leveraging the PC solution, ship owners can finance DAs with extended payment terms while ensuring that port agencies are paid prior to supplier invoice collection.
Canal Transit Toll Fee Financing: Similar to port services, companies are also required to pre-fund expensive canal transits weeks in advance of service delivery, which creates a glaring working capital challenge. Our joint solution offers a way to finance these transactions and avoid pre-funding through a specialised program that is fully compliant with the business and system requirements of all parties involved.
So, what comes next?
The shipping industry is, and will remain, a critical component of the global economy. The importance of sound financial performance, as well as cost savings, risk mitigation, and efficiency gains associated with digitisation, are now at the forefront. We are continuing to work with key stakeholders across the industry, and have a number of exciting global initiatives that we look forward to announcing shortly.
Where can you find out more about the above?