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The challenge
This Fortune 200 technology exporter — F2TE — is a U.S.-based global manufacturer of communications technology, exporting hundreds of millions of dollars of product by air, primarily from Singapore. Trade documentation and finance responsibilities reside in the U.S.; logistics operations are on the ground in Singapore. Export letters of credit are used often, for credit protection and prompt, consistent payment.
Here's what makes this story unusual: they were already good. They'd optimized their process and outsourced their letter of credit documentation. They were paid in 20 days on average, with discrepancies under 10% of presentations.
But the process still leaned on manual data entry and couriered paper. And F2TE challenged their primary trade bank to do better — with significant growth coming in Asia, much of it best financed by improving Days Sales Outstanding (DSO).
That meant driving discrepancies to zero and eliminating courier delays and costs entirely. It also meant the U.S. trade finance team needed total visibility into alerts, KPIs and transaction status.
The Solution
F2TE needed a partner with real breadth of trade finance experience, technology that could eliminate discrepancies and courier delays, and existing relationships with the key banks in their group.
We provided Tech-Enabled Trade Services, powered by TradeSharp™.
New letters of credit and amendments are reviewed and uploaded by our experts the moment they're issued, then parsed automatically into data that drives alerts and discrepancy-free documents. On shipment, all information and documents are sent from Asia to our Los Angeles office.
By 8:00am the next morning in LA, our experts have completed the document set and invited F2TE's U.S. examining bank into TradeSharp™. By 9:30am, bank staff have examined the original UCP 600 set. On confirming compliance, the bank adds its cover letter and pushes the originals through TradeSharp™ to its office in China. Next morning, they're printed there and sent across town to the issuing bank.
Original UCP 600 documents now routinely arrive in paper at issuing bank counters one day after shipment, and are routinely paid in five days.
The Impact
F2TE dramatically accelerated payment on hundreds of millions of dollars of shipments, while reducing risk and increasing visibility across their entire LC portfolio.
DSO fell year on year rather than in a single jump — 20 days before Trade Technologies, 12 in year one, 7 in year two, 5 in year three.
Discrepancies went to zero. Not reduced — zero, across roughly 800 presentations a year.
↓75%
Reduction in DSO
550%
ROI
5 days
Average DSO by year three, down from 20
0
Discrepancies on ~800 presentations per year
- Original UCP 600 documents at issuing bank counters one day after shipment
- Routinely paid in five days from shipment
- Average DSO reduced from 20 days to 5 across three years
- Zero discrepancies on approximately 800 presentations per year
- Total visibility into alerts, KPIs and transaction status for the U.S. team
- A DSO position capable of financing significant growth in Asia
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