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Maersk Trade Finance, Winner, Judges’ Choice

Photo of Benjamin Hadfield, Vipul Sardana, Shoby Jose and Mayur Chawda, Maersk Trade Finance.

This solution harnesses all of Maersk Group’s transport and logistics entities to strengthen its ability to be present across its customers’ value chain. The solution is all about enabling global trade, bringing together the flow of goods and money for its customers using a simple digital interface.

Photo of Benjamin Hadfield, Vipul Sardana, Shoby Jose and Mayur Chawda, Maersk Trade Finance.

Vipul Sardana

CEO, Maersk Group Financing Solutions

Maersk Trade Finance is part of A.P. Moller – Maersk A/S, headquartered in Copenhagen, which is an integrated transport and logistics company with multiple brands.

Revolutionising the world of trade finance

The challenge

In an era marked by instant gratification through interfaces enabling immediate procurement of services, the world of global trade remains paper-heavy and procedure-intensive, characterised by disconnected processes. According to the World Trade Organisation, access to trade finance is the second biggest hurdle to the growth of global trade, right after infrastructure. Global trade involving the flow of goods and money is very complex with multiple intermediaries, information asymmetry, limited or no transparency, high risk and paper intensive processes all woven in a complex web of regulations, customs and currencies across geographies. The Organisation of Economic Co-operation and Development (OECD) estimates that 15% of the overall value of traded goods around the world is comprised of hidden costs, much of it a result of the manual processes underlying most transactions. What is more, companies must constantly choose between security and simplicity. They also struggle with collaterals, documentation and an endless wait to secure their working capital requirements, all of which limit the potential of global trade.

The solution

The ability to secure working capital alongside a logistics solution is imperative for global trade, so with this solution Maersk brings to its customers the first ever single window for container logistics and trade finance.

In addition to Maersk’s ongoing efforts to simplify and digitise the container shipping process and industry, the brand has reinforced its commitment to enable global trade by further assisting exporters and importers around the world with a working capital solution that is unique, digital and simplified.

Maersk is venturing into trade finance to simplify the process for its customers and to be present across the value chain and serve them. The customers expect more from the company and delivering a trade finance experience digitally is one area where Maersk can create significant value for their businesses.

What uniquely positions Maersk Trade Finance is that the company is involved in most of the documentation, carries the cargo on a Maersk vessel and knows the buyer and the seller. This significantly changes the play around risk mitigation and simplifies a lot when it comes to credit assessments and credit worthiness.

Best practice and innovation

Maersk has created a simple, end-to-end digital solution, removing the paper trail from traditional financing options, providing easy access to capital to customers when they need it most, in partnership with a world-class logistics company. The removal of physical documentation saves hidden costs including bank charges, postage costs and other administration costs.

Besides providing cost savings and ease of doing business, it fosters a unique ability to leverage Maersk’s strong global network.

Key benefits

The service provides Maersk’s customers with:

  • Direct savings through faster and timely access to capital.

  • 20% additional working capital during shipments, compared to documentation backed financing, as Maersk finances based on the custody of the goods.

  • Indirect savings delivered through simple finance processes – simple, zero-paper, digital trade finance product and processes (simple credit evaluation, KYC, contracting, disbursement).

  • A solution to the collateral trap for the export financing product (as the only collateral needed in this solution is the cargo on a Maersk ship).

  • Ability to manage buyer risk.

  • A solution to deleverage the balance sheet.

  • A reliable transportation and logistics partner.