When you draw up an international contract, very often you adopt as terms of payment the Documetary Letter of Credit. We would like to give you some suggestions in order to avoid troubles and loss of money. First of all when you receive L/C fom your bank, you should check very carefully this document, as you have to follow up all requests.
Following just few suggestions:
- The L/C should always be irrevocable and confirmed by your bank;
- The goods value shown on L/C should be o the same amount of the order you received;
- You should be sure that all documents required can be absolutely supplied;
- Please check with Logimar the date of vessel’s departure in order to load the goods within the time previewed by L/C (the date of shipment is the date of receipt on board of an ocean vessel – not the date of loading at at your factory!).
- You should check that the terms of delivery and the means of transport are the same you agreed with your customer.
Upon receipt of L/C if you can not met some requests, please ask your customer to amend the credit accordingly.
If your L/C expires before the time you can ship the cargo, you should ask your client to extend the L/C validity time.
It is important to supply to your bank all and well done documents, infact for each discrepancies between L/C and documents you will loose money.
Usually the L/C are issued in accordance with the “international chamber of commerce Pubblication nr. 500”. You should ask copy of it to your local Chamber of Commerce, it will be of great help!
Logimar can grant you a good and specialized assistance, we can solve all your doubts, so do not hesitate to contact us! Logimar can help you to guarantee your payments!
SUGGESTIONS FOR CONSIGNEE
For shippers The L/C is a safe form of payment, as it always guarantee the payment of supply. Unfortunately the consignee is not really protected, infact the cargo shipped can not be checked, neither by the forwarders, neither by shipping lines, and it should happen that the importer will receive goods of bad quality.
So if you have to buy some materials abroad try to chose good and reliable suppliers, and please check carefully cargo quality upon receipt.
If you have any doubt about your suppliers, please contact Logimar, and we will try to check their reliability.
The Bill of Loading, the document issued for sea shipments, declares and describes the cargo shipped as confirmed by the supplier. So the forwarder completely has to trust in what the shipper delcares.
The contract of carriage (the Bill of Lading) covers responsabilities of carriers but usually these liabilities are much lower than real cargo value.
In order to avoid damages, follow up these few rules:
First of all if your contact is based on “Incoterm 2000” you should read carefully the part or risks, try to issue an insurance policy for the door to door domicile, or at least for the part of transport under your liability.
When you issue an insurance policy / certificate, it is important to specify:
- Number, weight and type of packaging shipped
- Detailled cargo description (specifying particular dangers such as rusty, exposives or fragile cargo);
- Kind of transport effected (by truck, by air, by sea, by train)
- You should declare necessary transhipments or warehousing
- Please specify the special conditions, as per L/C requests
Please remember that the all risks insurance does not cover every risk, but only the risk specified in your policcy.
You can contact Logimar for more and detailled clarifications.