What is a letter of credit, how it works and who needs it..
Many of you would have come across the term Letter of Credit (L/C)..
If you are a shipping line, you would have heard this term from various customers asking you to expedite the draft bill of lading for checking by the bank or for the release of the bill of lading to be expedited because the shipment is under L/C..
If you a freight forwarder or agent, you may have been put under pressure by the BCO to get all the documents required by the L/C sent to them in time..
If you are a BCO, you may have been told by your bank that the documents submitted do not match the requirements of the L/C and some of the documentation may need to be redone..
So what exactly is a Letter of Credit, what is the need for a letter of credit, who issues it and how does it work..
8 points to consider before you sign a bill of lading
To the casual onlooker, signing a bill of lading may be a routine, day to day mundane job done by many people across the world.. But the fact is that there are several technicalities to be considered before signing a bill of lading..
It is important to understand that the person signing the bill of lading acknowledges the details recorded on the bill of lading.. Any bill of lading signed with the knowledge of misrepresented facts may be considered to be a fraudulent document and may result in legal consequences for the signatory..
If you are a bill of lading signatory, here are 8 points that you need to consider before signing a bill of lading.. It may be a bit of a long read, but worth it.. 🙂
Causes of Demurrage and Detention
In one my previous articles (which is also the MOST READ article on this site) I explained the Difference between Demurrage and Detention..
After reading this, a few of my readers have asked me to explain the causes of demurrage and detention..
There are several reasons a container(s) can incur demurrage and/or detention or combined demurrage and detention.. Here are some of the major reasons..
Should the Shipped on Board Date and Bill of Lading Date be the same..??
Shipped on Board Date and Bill of Lading date – can these two dates be different..
What are the implications if they are same or different..??
Help, carrier refuses to show commercial information relating to the cargo on the bill of lading
Carrier refuses to show details relating to commercial and sales information of the cargo on the bill of lading.. Are they being pedantic or are they right..??
Who is a notify party in a shipment and what is their role..??
A Notify Party is one of the many parties involved in a shipment reflected in a Bill of Lading, forming an import part of the documentary process..
This article discusses the role of a Notify Party in a shipment and their importance..
Shipped on Board Date stamp – should it be signed..??
Should the Shipped on Board stamp be signed and the implications whether it is signed or not..
Letter of Credit and Trade Finance timelines
House Bill of Lading is dangerous
There is a perception in the industry that the use of a House Bill of Lading is dangerous.. Let us explore that topic here and see if there is any merit in that statement..
Do banks verify if cargo is actually loaded on a ship..??
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..