Trade Finance Expertise

  Can you tell a Switch B/L from an original B/L? There is no information included on the Switch B/L to indicate that it is not the initial B/L However, the final buyer or consignee can ask the carrier whether the bill of lading has been switched, and the carrier may give this information at their discretion without disclosing any other details. 2. Can you request for a Switch B/L? The Switch B/L can be requested if you are - Original seller/owner of the goods Trading agent or distributor Final buyer of the goods 3. Is there any time limit for issuing Switch B/Ls? The carrier has to issue the Switch bill of Lading once all documents are received and before the shipment arrives at the destination port. 4. Where can a bill of lading be switched? This depends on the carrier's coverage. If the carrier covers all ports, the bill of lading can be switched anywhere, but the carrier/freight forwarder needs to have an office in the country where the Switch B/L is being issued. 5. What can b

  In international shipping, a Bill of Lading (B/L) acts as a receipt and contract between the shipper and the carrier. It contains all the details needed to process the shipment and create accurate invoices. This document is crucial for maintaining transparency and complying with laws of two or more jurisdictions, especially during cross-border trading. But there may be instances where the bill of lading will need to be updated to reflect changes in destination ports and cargo descriptions, or shippers might want to conceal the supplier name from the bill. T o address these scenarios, shippers need a second set of bills. This second bill of lading replaces the original and is referred to the Switch Bill of Lading. W hat is a Switch Bill of Lading A Switch Bill of Lading is a document that substitutes the original B/L issued at the time of shipment. Switch B/L refers to the same shipment as the original, but the information inside the document might change. It has the same function as

W hat is a FOB Incoterm? Under the incoterm Free On Board or Freight on Board, the seller delivers goods onto a vessel nominated by the buyer at the named port. This named port can be the port of origin or the port of destination. 1. Port of origin:  The term FOB origin or FOB shipping point means the buyer is at risk once the seller has dispatched the products from his end. In technical terms, the title and responsibility of the goods are immediately transferred to the buyer after loading goods onto the vessel and signing the bill of lading (BL). 2. Port of destination:  On the other hand, the term FOB destination means the seller is at risk of bearing the loss until the products reach the buyer’s port. The term was originally restricted to goods transported by ship in the US. However, now, the term has broadened and is used for goods transported by land and air too. The FOB incoterms vary from country to country. Thus, the buyer and seller need to make the FOB terms clear in the cont

A Letter of Credit is a payment undertaking usually issued by a bank on behalf of a buyer to favor of seller, covering the amount specified in the credit, payment will be made  once seller  fulfills the credit requirement and present the complying document as per credit terms. LC process flow: The aim of this instrument is to provide assurance to both the parties (buyer and seller) of the fulfilment of each party’s obligations in a commercial trade wherein the seller’s obligation to deliver the goods as agreed with the buyer, and the buyer’s obligation to pay for those goods within the specified timeframe  upon complying presentation.  There are  various types of Letter of Credit include revolving, transferrable, back-to-back, as well as red and green clause letters of credit. An issuer will use its customer’s funds to make the payment, however, it is a bank responsibility to make t he payment if the document  are presented as per  credit terms and applicant  does not have funds in his

There are four method of payment used in trade business in day to day basis. 1.      Advance Payment 2.      Open Account 3.      Documentary Collection 4.      Letter of credit. Advance Payment  Is the least risky product for the seller, a cash advance requires payment to the exporter or seller before the goods or services have been shipped. Cash advances are very common with lower value orders, and help provide exporters (sellers) with the upfront cash needed to ship the goods and no risk of late or no payment. Open accounts An open account is a transaction where the importer pays the exporter 30 – 90+ days after the goods have arrived from the exporter. Documentary collection Documentary collections is different from a Letter of Credit. In the case of collection, the exporter will request payment by presenting its shipping and collection documents to its remitting bank. The remitting bank then forwards these documents to the importer’s bank, which then pays