Connectivity and Credit Challenges
For many years, the automotive logistics industry has faced major challenges across its value chain. Multimodal transport, which has become increasingly common, has made it difficult for carriers to connect and cooperate with each other. Delivery of paper documents for transactions is costly, takes a long time, and critical documents can be lost or damaged. Moreover, each party regards its own data as its proprietary resource and is unwilling to share it. As a result, the lengthy accounts receivable and reconciliation process leaves the carriers, mostly small and medium-sized enterprises, with insufficient access to credit.
First for China’s Automotive Industry
In collaboration with DBS, BAIC CCL developed a blockchain-based auto supply chain service platform called Yun Lian Meng. Leveraging cutting-edge technologies provided by Shanghai Wanxiang Blockchain Inc. (Wanxiang Blockchain), DBS became the first bank to launch such a platform for the automotive industry in China.
Yun Lian Meng enables all the participants along the entire value chain, including car manufacturers, exporters, logistics carriers and car dealerships, to access digitalised data about their order and delivery status in real time. Carriers receive and accept e-shipment orders directly on Yun Lian Meng. End customers such as dealerships can acknowledge the delivery order and log the delivery status once they receive the cars. All information posted on the blockchain platform is protected, accessible only by authorised parties.
Using Application Programming Interface technology, DBS integrated working capital financing on the platform. DBS evaluates and disburses trade financing to participants based on their digital data stored on Yun Lian Meng, thus removing the need for paper-based applications and supporting documents and shortening the credit approval process.
Seamless Auto Supply Chain
Yun Lian Meng successfully integrates logistics, settlement and supply chain finance for complete auto vehicle logistics into one seamless process. Without the need for paper documents that could go missing or get damaged, the participants on BAIC CCL’s supply chain network enjoy greater operational efficiency, cost savings and transparency.
Carriers now have direct access to the bank’s credit facilities, which provides them with lower-cost financing, improves their cash flow and reduces their working capital cycle by more than 90 days.
BAIC CCL, DBS and Wanxiang Blockchain have since further collaborated to roll out Yun Lian Meng across the industry.
