A reader asked me a question about letter of credit and trade finance timelines..
With a letter of credit. What sort of timings are usually connected to when the payment between banks occurs? Does the shipment sail prior to the LC being satisfied?
This is actually is a very good question – and the answer usually is: “it depends..” Kim Sindberg provides below comprehensive response on what it actually depends on and the relevant rules applicable..
Do banks verify if cargo is actually loaded on a ship..??
Shippers who deal with documentary credit know that the term Shipped on Board carries quite a bit of weight and there is often a lot of discussions, disputes, rejections etc from the side of the bank if there is any discrepancy in the shipped on board clause or date or stamp or signature..
So one would naturally assume that the banks verify if the cargo covered in the bill of lading is actually loaded on board the ship or not..
When answering my last post Question regarding cargo under Letter of Credit, I mentioned that part bills could be a solution for two shipments in a same container where part of the cargo is covered by L/C and the other part is not..
However, there are several criteria/requirement in order for the carrier to be able to issue Part Bills of Lading and for the customer to accept Part Bills of Lading for this particular scenario..
We will examine these criteria/requirements in this post..
In my last post, I posed a question on behalf of a reader about the possibility of two cargoes being shipped under one bill of lading where one cargo is covered under Letter of Credit and other cargo is not..
Should the carrier issue two bills of lading..?? Or is mentioning in the same B/L the goods under L/C and goods that aren’t is enough..??
This post is an update where I have discussed the answer to the above question..
True to the nature of its business, the business of shipping and freight is a vast ocean covering many issues and areas which sometimes seems unfathomable..
A Bill of Lading is the most important document in this business and there are always several questions surrounding a bill of lading.. This article deals with one such type of bill of lading – Short form bill of lading..
Shipping your cargo without insurance.. Hmmmmm, not a very smart idea.. Several pitfalls await those who attempt this.. Here’s a question from a reader based on their historical experience.. All comments welcome on this situation..