Citibank Announces the First Live Bolero Transaction
Citibank Global Cash and Trade, part of Citigroup, the largest financial services group in the world, announced the completion of the first live electronic trade transaction using the Bolero.Net system, an internet-based international trade service. The transaction was also the first full supply chain trade transaction, with more than five participating companies. The Bolero transaction covered ‘purchase order-to-payment’ on a real shipment of women’s knitwear under letter of credit terms. Federated Merchandising Group, a division of Federated Department Stores, Inc., was the buyer in the transaction. Mercantile, the logistics provider; APL, the carrier; and Peninsula Knitters, the supplier (all of Hong Kong), participated in the transaction to ensure full supply chain involvement. IMRglobal Tokyo provided the Bolero front-end software and technical support during the effort. The transaction was sensitive to the complexities of paper-based trade in deploying the electronic Bolero environment. The project required the participants to complete more than thirty process steps over a three-week period to execute this live ‘paperless’ trade transaction. This successful exercise further illustrated the need for supply chain integration and simplification using e-commerce applications. The Bolero process began with purchase order and letter of credit initiation between the importer, (Federated), the exporter (Peninsula Knitters) and Citibank which was both the issuing and advising bank for the letter of credit transaction. This preparation of the export documents for shipment to the U.S., conforming to the terms of the letter of credit, was a major portion of the effort. The export and transport document sets involved Peninsula, (for the export documents and invoice), APL (for the bill of lading) and Mercantile (for coordination of the shipping process and the forwarder’s cargo receipt). The full set of export documents was presented to Citibank electronically by Peninsula for negotiation of the letter of credit. Citibank made the payment to Peninsula based on this presentation and a payment pre-advice from Federated authorizing payment to Peninsula for the shipment.