Singapore’s first digital bunker delivery note success

To make progress in the digitalisation of Singapore’s bunkering sector, DBS, in partnership with Trafigura Group’s joint venture TFG Marine, Ocean Network Express (ONE) and Ascenz1, has successfully completed Singapore’s first live bunker delivery financing pilot transaction. It was done by an electronic bunker delivery note2 (BDN) and the transaction was supported by the Maritime and Port Authority of Singapore (MPA).

With Singapore being the world’s leading bunkering hub in terms of volume, with close to 50 million tonnes of marine fuel sold in 20203, banks rely on physical copies of the bunker delivery note (BDN) and other supporting documents to avail bunker financing to clients. A cumbersome process, this can typically take up to a week as clients have to manually deliver the physical BDN back to shore before a trade finance application can be submitted.

The digitalised process demonstrated that in future, clients will be able to obtain financing for their underlying trade within two hours, enabling them to obtain working capital faster and to better manage their cashflows.

In addition, the new digital BDN mitigates against is the risk of fraud in the bunker industry as in the traditional bunker trade-world, the physical BDN has a higher risk of being manipulated and used for fraudulent activities.

Sriram Muthukrishnan, Group Head of Trade Product Management, DBS, said, “Trust and transparency are the keys to Singapore’s continued leadership in trade and trade finance. 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.

“The objective is to co-create an end-to-end digital workflow that enhances efficiency and transparency for bunker trades, while building trust with banks and shipowners which are fundamental to the long-term growth and development of Singapore’s bunker ecosystem.”