Singapore launches trade data sharing platform to cut supply chain inefficiencies, rebuild trust

OVER 70 participants have signed up to share data on the Singapore Trade Data Exchange (SGTraDex), a digital utility which aims to tackle supply-chain inefficiencies by connecting partners in the local and global supply chains via a common data infrastructure.

Participants include the 3 local banks DBS, OCBC and UOB, as well as PSA, Jurong Port, commodity trader Trafigura, and energy companies ExxonMobil Asia Pacific and Chevron.

The public-private initiative was launched Wednesday (Jun 1) on the sidelines of Asia Tech x Singapore (ATxSG) 2022 by Josephine Teo, Minister for Communications and Information and Minister in-charge of Smart Nation and Cybersecurity.

“Digitalisation has transformed many sectors, but in the global supply-chain and trade sector, its promise has yet to materialise,” said Antoine Cadoux, chief executive officer (CEO) of SGTraDex Services. “The physical exchange of paper remains the norm.

“We believe that the plug-and-play digital infrastructure we have created at SGTraDex will go a long way to make it easy for all participants to share data under an agreed set of rules.”

From 3 initial use cases, SGTraDex is expected to unlock more than S$100 million in value for existing participants by 2026. This is expected to materialise through cost savings from improved efficiency and productivity, optimal use of assets, and faster access to financing.

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SGTraDex Technologies CEO Liau Eng Soon said: “By helping participants shift from a manual and paper system to sharing data through a neutral common data infrastructure, SGTraDex will raise their productivity and efficiency.

“Participants will also have complete autonomy in what data they wish to share with their ecosystem partners, and no one will be forced to share confidential information.”

The 3 initial use cases developed during the pilot stage are to strengthen the financing integrity of trade flows, to enhance end-to-end visibility of container logistics flows, and to digitalise the bunkering industry.

For example, in the container logistics use case, SGTraDex enables the exchange of data between shipping lines, hauliers and port operators to alleviate congestion in ports and various transport nodes through access to timely data.

In the bunkering optimisation use case, the digitalisation will help ecosystem partners such as storage-facility operators, barge operators and financial institutions to mitigate inefficiencies, build trust and strengthen trade in the sector.

SGTraDex said it enables documents to be verified using the TradeTrust framework and distributed ledger technology, which builds trust and resilience in the ecosystem. TradeTrust provides participants with proof of authenticity and origins of the documents exchanged on the SGTraDex infrastructure.

For example, OCBC said it has completed its first documentary exchange transaction on SGTraDex with bunker supplier Equatorial Marine Fuel Management Services (EMF).

Under the transaction, the bank successfully received the purchase contract – one of many documents that customers have to submit to banks for their trade finance needs – signed between EMF and its supplier for the purchase of marine fuel via SGTraDex.

“Improving transparency and productivity is essential for transforming global trade,” said OCBC’s head of global transaction banking Melvyn Low. “The successful document exchange and the ease of use of the platform give us confidence in SGTraDex’s vision of connecting supply-chain ecosystems via a trusted and secure data-sharing infrastructure.”

DBS also announced the completion of its first live transaction on SGTraDex – an electronic bunker delivery note involving bunker player Kenoil Marine Services.

“With the digitalisation of the bunker delivery note, financing and payment for the underlying trade can be completed efficiently and on a near-immediate basis. Furthermore, the risk of fraudulent manipulation is mitigated as banks and fellow industry partners are now able to ascertain the trade data at source,” said Sriram Muthukrishnan, group head of product management of global transaction services at DBS.

“This helps provide greater transparency and comfort regarding the genuineness of trade,” he added. “Access to secure, trusted and real-time data will support the long-term growth of trade and trade finance.”

SGTraDex is also working with partners to pilot 3 new use cases in the coming months. These are on green and sustainable trade financing, reducing demurrage costs, and increasing transparency in supplies and spare parts in the maritime industry.

Plans for SGTraDex were announced in 2021, amid commodity trade finance fraud and corporate scandals in recent years that have rocked confidence in Singapore as one of the world’s biggest commodity trading, financing and bunkering hubs.

These include the high-profile collapse of oil trader Hin Leong Trading, which eventually led to banks cutting their exposure to commodity financing.

UOB, the largest financier of local bunker suppliers, said it aims to bring all its bunker finance clients onto the SGTraDex digital platform by June 2023.

So Lay Hua, head of group transaction banking at UOB, said: “We are pleased to be the financing partner of choice for our local bunker suppliers to drive the digitalisation of their trade fulfilment and financing. This is key to enabling and supporting the development of Singapore as a more process-efficient and deal-transparent bunkering hub.” The bank provides more than 50 per cent of the financing required by local bunker suppliers.

Minister Teo also announced the launch of the Digital Trust Centre (DTC) at ATxSG on Wednesday.

Funded by a S$50 million investment from the Infocomm Media Development Authority (IMDA) and the National Research Foundation (NRF), DTC will lead Singapore’s research and development efforts for trust technologies and support talent development in this space.

Teo highlighted that it is important to invest in trust technologies, given the emergence of new risks as technology evolves.

These trust technologies include, for example, Privacy Enhancing Technologies (PETs), which preserve data privacy while the data is being analysed.

IMDA and the International Centre of Expertise of Montreal for the Advancement of Artificial Intelligence (CEIMIA) on Wednesday signed a Memorandum of Understanding for one of the world’s first cross-border collaborations on PETs.

Under this, solutions will be developed to show how PETs can overcome privacy and compliance challenges for organisations that are building novel applications that leverage cross-organisation and cross-border data.

Another example of trust technologies that DTC will have a hand in furthering is trustworthy artificial intelligence (AI) technologies, which help verify and explain the expected performance of AI systems.

Minister Teo announced Singapore’s intention to work with an even wider group of stakeholders through an international pilot to enhance A.I. Verify, the world’s first AI governance testing framework and toolkit, was launched at the recently concluded World Economic Forum Annual Meeting in Davos.

The international pilot will also seek to co-develop benchmarks and better methods of verifying trustworthy AI, as well as devise more effective ways to explain the factors shaing the behaviour of AI applications to internal stakeholders, business partners and customers.