1. Approved the letter of credit
2. Confirm the quotation and sale with the manufacturer,
3. Inform the date the goods are loaded onto the ship
4. Terms of shipping FOB & CIF
Do you have a confirmed order signed by the authorized representatives of the distributing company? Has your banker approved the letter of credit from the company?
Compare the amount of the letter of credit to the amount quoted for the goods. Confirm the quotation and sale with the manufacturer, and do the same with the freight forwarder and any marine insurance agents you are working with.
Be informed of the date the goods are loaded onto the ship. The factory should have them freighted in time to avoid costly dock storage charges.
Since all conditions of the sale must be met to comply with the terms of the letter of credit, you need all the signed documents.
Once you have all the signed documents, present them to your banker. If all the terms are met, the funds will be released. Since your commission is part of the quoted price of the merchandise, you’ll usually collect your fees from the manufacturer.
TERMS OF SHIPPING
A bill of lading is a receipt for goods shipped. It is signed by the agent of a ship or common carrier and assures the buyer that the goods were unloaded in the same condition as they were accepted. These are the documents you’ll need to produce for your banker to release the letter of credit.
FOB means free on board. The seller delivers the goods to a certain destination with no additional charges. The seller insures and takes the responsibility until that point. The buyer takes the responsibility and pays the charges after that. For example, FOB New York means the seller’s price quotation includes full responsibility and shipping to New York.
CIF means cost, insurance and freight. The seller is responsible for the value and condition of the goods, and pays both insurance and freight charges to a certain point. The buyer is responsible from there.