General

In international trade, it is very important and fundamental to master the commonly used payment methods for foreign trade in sea transportation. Today, Xiao Zhijun will introduce the commonly used payment methods for foreign trade in international sea transportation to everyone. Let's take a look together.

1. T/T: The payment method of spot wire transfer, also known as wire transfer foreign trade payment method, refers to the remitter of the remitting bank instructing another country's agent bank (remitting bank) to pay a certain amount through telex or telex, which is a method of remittance to the designated recipient. Simply put, it is a foreign trade payment method that pays through bank transfer. The advantage of this method is that it is fast and allows sellers to receive remittances as soon as possible, with high security. However, it also has certain drawbacks, such as high mobility between SWIFTs.

2. L/C: The letter of credit payment method belongs to bank credit and is a very safe foreign trade payment method, but the handling fees charged by the bank are also relatively high. On the premise that both parties are not aware of the other party's situation at the first time, they will use a bank as an intermediary. As long as the shipper presents the corresponding documents on the letter of credit, the bank will verify the accuracy and transfer the pre stored payment from the consignee to the bank and sender.

The above situation is for immediate payment, and there is also a forward payment situation where the bank receives the corresponding documents and hands them over to the consignee, but the consignee must make the full payment within the specified time limit. This payment method requires the issuing bank to have good credit, the document clerk to carefully review the documents, and the company's business, storage and transportation, document and other departments to coordinate and avoid discrepancies in the documents.

3. D/P: refers to Cash on delivery. Generally speaking, after shipment, the shipper will hand over the documents to the bank according to regulations, and the bank will remind the customer that the documents have arrived. The bank will only pay the money to the bank and hand over the documents to the consignee. But this situation is quite dangerous for the shipper. The goods have arrived at the other party's territory, but due to reasons such as the recipient's own fund flow, they may not be able to retrieve the bill of lading from the bank. Therefore, when using D/P as the payment method, a 30% advance payment needs to be sought.

4. D/A: Refers to documents that are not accepted. Generally, it refers to the consignee promising the bank to pay the full amount of the goods within the specified time, and the bank will act as the guarantor. After the shipper delivers the documents to the bank, the bank can transfer the documents to the consignee and promise to pay the full amount of the goods within the specified time. However, this payment method is the same as D/P, as long as the consignee is unable to make the payment due to their own reasons, the shipper will bear huge risks.

5. O/A: refers to the shipper delivering all goods and documents to the consignee first, and the consignee pays in full within the agreed time. For example, O/A30 represents payment within 30 days from the date of delivery. This foreign trade payment method completely depends on the credit of both the buyer and the seller, and the risk is high.