A group of Japanese companies has announced a collaborative digitalisation pilot project for Vietnam-bound trade with the first set of trial operations focusing on their receipt of letters of credit (L/Cs).

Mitsubishi Corporation Plastics (MCP) and Mitsubishi Corporation (MC), supported by MUFG Bank and Tokio Marine Nichido Insurance expect to commence the pilot project in March 2021. It will revolve around the TradeWaltz information-sharing platform (DC World News, 14 December).

Document checking

The pilot is expected to commence with the TradeWaltz platform being connected to MCP, MC, MUFG and Tokio Marine, with the first set of trial operations focusing on the receipt of L/Cs.

The pilot project aims to test the platform's ability to check and verify that information on L/C documentation matches shipping documents.

While the TradeWaltz platform can accommodate L/Cs from all countries, the pilot project will focus on transactions with companies in Vietnam, one of Japan's biggest trade partners in the ASEAN region.

Japanese government concerns

This project has been adopted as part of a larger scheme funded by Japan's ministry of economy to help diversify overseas supply chains and to substantially reduce the need for documents to be checked manually.

The process of document checking by trading parties, banks and government offices amongst others has been severely disrupted by the impacts of the coronavirus pandemic.

The ministry is concerned that if the pandemic were to worsen or some other crisis occurs that prevents employees from checking documents, it could slow trade and adversely impact supply chains.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.