I have a question relating to the documentation required when sending goods to a client by road with an LC. Normally for sea transport to receive goods I had to pay the supplier before the bank would release the documents and then in turn I could take the goods from the port. In the case of road transport where the destination is the consignees warehouse how do I ensure that the goods are paid for before they have posession of them?
Does the CMR act as the B/L in this case? As a supplier I send the relevant documentation to the clients bank so they can pay the value and recieve the goods. Should this be done before the goods leave my premises? If so how will I obtain a CMR to send to the clients bank as it wouldnt be signed by the transport company as they havent as yet taken charge of the goods.
Thanks in advance
1) The CMR is no document of
1) The CMR is no document of title and not representing the goods. Buyers would get the goods right away, irrespective of docs being taken up or paid or not.
2) Before shipment you have no docs. Without docs you cannot claim payment under the credit.
3) What could you do?
- The goods could be destined to the bank rather than to the applicant. This could and also should then be foreseen under the credit.
- Some forwarders allow for a storage of the goods until you signal them that payment has been received / docs taken up or the like. Only then would they deliver the goods.
- A payment guarantee instead of a credit would also work fine.
-Each long journey starts with a small step-
Best regards
Frammi
thank you
thank you
CMR shipments
The answer to your query is predicated on the INCOTERM that governs the sale. If you are the supplier and you are selling on an EX-WORKS basis (this means that the buyer is responsible for collecting the goods from you and he ships to his own facility) then you should structure the transaction so that the buyer pays at the time of collection - you don't need an LC for this, just don't release the goods before you receive his payment.
If you are selling FCA (it used to be FOT or "Free on Truck" before INCOTERMS 2000) then ensure that the L/C provides for a delivery note indicating that the goods have been delivered to the buyers shipper. An L/C should only contain a requirement for a Bill of Lading or AWB if the INCOTERM commences with a C or D.
CMR Shipments
Thanks for your replies - The incoterm is CPT - carriage paid to the clients warehouse - If the client (and its likely) requests credit days would the best option be a stand-by LC? that would expire 60days from the invoice date?
CMR or better Truck Waybill
Hi friend, being located in Italy, it is quite normal to receive or to open l/c calling for a road transport document (under CMR rules). Many customers are used to send copy of said document to the advising bank, asking for compliance with credit terms, before delivering the goods. If the bank says yes, the customers will deliver the goods to the driver against the truck waybill CMR-Remember that the most of data to be inserted in the CMR , are care of seller:
Ths happens when the consignee is the buyer, that will get the goods directly, being said CMR not a document of title.
Some l/c s, observed in the past, called for said document, but the consignee stipulated in the credit, was not the buyer, but a forwarder in import country, ready to deliver the goods under a specific authorization by the issuing bank., with full acceptance of documents in transit.
It was really impossible to insert the issuing bank as consignee, (thinks to the whole supply discharged in front of the branch or the H.O. of issuing bank).
When goods are forwarded by road, CMR could be a solution but parties have to manage it to satisfy buyer and seller.
Ciao
CMR
thanks for the reply - when you say "Many customers are used to send copy of said document to the advising bank, asking for compliance with credit terms" what compliance are you referring to?
compliance with l/c Terms
Hi friend,
The behavior of my customers is to send by fax CMR or AWB copy asking if all is correct to the advising bank, the latter examines the document as per the indicated l/C. If all is in order the beneficiary allows the shipment, if something is discrepant the carrier/forwarder will amend the document of transport to satisfy credit terms. Naturally if it impossible, it will be choice of beneficiary to send and to risk the goods. Moreover sometimes the other documents result discrepant and need to be modified.
Frankly speaking for the advising/presenting bank, not nominated, is a big risk as other banks will determine if documents are discrepant or not.
That's all
Ciao
thank you
thank you