Startup Cargodian Develops Digital Alternative to Letters of Credit

The German startup Cargodian has developed a digital platform for secure trade processing in global supply chains, where payment flows occur in a new bank-independent process. The solution offers a 50 percent cheaper and up to 80 percent faster alternative to traditional letters of credit. In the first step, Cargodian is offering this service for exports and imports between the EU and Malaysia. More countries will follow.

(Rohrdorf) Cargodian is a new and innovative digital solution for secure and efficient global trade. The solution primarily targets all small and medium-sized enterprises (SMEs) that need to import or export goods while covering payment and credit risks. “We are committed to democratizing trade and payment processing and eliminating barriers to the global orientation of SMEs,” explains Klaus Burkart, co-founder and Chief Operating Officer of Cargodian GmbH.

The unique platform simplifies letter of credit processes at halved costs and minimized risks, while credit lines can be better managed. Additionally, Cargodian enables trade in the desired currency, thereby avoiding currency risks. Another advantage is the enormous time savings, which can be up to 80 percent compared to a conventional analog letter of credit.

“Cargodian meets all the requirements to be a game changer for the trade finance industry, and we are pleased that the beginning is being made in Malaysia,” emphasizes Daniel Bernbeck, Managing Director of the Malaysian-German Chamber of Commerce and Industry (AHK Malaysia). Cargodian makes it “so much easier to conduct business with Europe”.

Money and Goods Flow According to Defined Process

At Cargodian, the flow of money and goods follows a precisely defined and fast process. Guaranteed trade payments are automated and triggered based on events. The platform acts as an intermediary, thereby representing the interests of both buyers and sellers.

Exporters deliver the goods only after the buyer has made a deposit to Cargodian. Once the exporter has forwarded the shipping document (bill of lading) to the platform, the deposit is transferred to the seller. Just before the goods reach the destination port, the buyer transfers the remaining amount to Cargodian. The buyer can only take possession of the goods once they can prove the remaining payment to Cargodian. Once the buyer has confirmed receipt of the goods in the agreed quantity and quality, Cargodian makes the remaining payment to the seller.

Innovative Online B2B Platform

The innovative Cargodian online platform is a unique B2B platform that acts as an independent intermediary for buyers and sellers. With the help of the platform, SMEs can avoid costly and cumbersome measures such as bank letters of credit. The primary goal of the platform is to make global B2B trade more accessible to more SMEs. Cargodian is fully digital and easy to use. The solution is transparent, cost- and time-saving, flexible, and extremely secure thanks to blockchain technology. Cargodian uses DLT Hyperledger Fabric Technology to ensure a tamper-proof security level for the exchange of trade data and documents.

About Cargodian GmbH

Cargodian GmbH is a German company based in Rohrdorf near Rosenheim, founded in 2021 by Peter Selmayr and Klaus Burkart. With its fully self-developed digital platform, the startup primarily facilitates global trade processing for small and medium-sized enterprises (SMEs). Conventional time- and cost-intensive bank letters of credit are replaced by highly secure, simple, and fast processes. Cargodian takes on the role of the independent intermediary.

Photos: © Cargodian