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Sight Letters of Credit indicate that the drafts drawn are due upon presentation of the shipping documents.

rules allow International Trade Finance and your company 7 business days to review the documents for
discrepancies before accepting or rejecting the documents. Upon acceptance, International Trade Finance makes
payment to the Letter of Credit beneficiary according to the instructions on the draft. If the documents are rejected,
International Trade Finance advises the beneficiarys bank of the rejection and waits for instructions on how to
dispose of the documents. The goods cannot be released if the documents are rejected.
Usance Letters of Credit allow a specified number of days from the Bill of Lading date or from the presentation of
the documents, before the draft matures. Again, ICC rules allow International Trade Finance and your company 7
business days to review the documents for discrepancies before accepting or rejecting the documents. Upon
acceptance, International Trade Finance advises the beneficiarys bank of the maturity date and makes payment to
the Letter of Credit beneficiary accordingly. If rejected, International Trade Finance advises the beneficiarys bank of
the rejection and waits for instructions on how to dispose of the documents. The goods cannot be released if the
documents are rejected.
Letters of credit may be either revocable or irrevocable. A revocable letter of credit may be revoked or modified for
any reason, at any time by the issuing bank without notification. A revocable letter of credit cannot be confirmed. If a
correspondent bank is engaged in a transaction that involves a revocable letter of credit, it serves as the advising
Once the documents have been presented and meet the terms and conditions in the letter of credit, and the draft is
honored, the letter of credit cannot be revoked. The revocable letter of credit is not a commonly used instrument. It is
generally used to provide guidelines for shipment. If a letter of credit is revocable it would be referenced on its face.
The irrevocable letter of credit may not be revoked or amended without the agreement of the issuing bank, the
confirming bank, and the beneficiary. An irrevocable letter of credit from the issuing bank insures the beneficiary that
if the required documents are presented and the terms and conditions are complied with, payment will be made. If a
letter of credit is irrevocable it is referenced on its face
Understanding revocable and irrevocable leters of credit. Key features and main dffierences between revocable and
Irrevocable letters of credit.
A revocable letter of credit can serve as a limited security payment method to the beneficiries because they are
subject to amenmend or cancellation without their prior knowledge. As a result revocable letters of credit are not used
frequently in international trade.
UCP 500,which is the previous letters of credit rules published by ICC, was indicated that a letter of credit may be
either revocable or irrevocable. UCP 500 assumed that a letter of credit is irrevocable in default of the indication
whether it is revocable or irrevocable. Current letter of credit rules, UCP 600, do not cover revocable letters of credit.
This point is made clear in article 3 of UCP 600 :
A credit is irrevocable even if there is no indication to that effect.
Irrevocable Letter Of Credit : Irrevocable Letter Of Credit (ILOC) is a letter of credit type which can not be
cancelled or amended by the issuing bank without the agreement of the parties of the letter of credit transaction. For
example, issuing bank has no power to modify letter of credit terms if beneficiary does not find them acceptable. In
other words, every amendmend at least requires beneficiary's acceptance in order to be effective. Irrevocable letters
of credit give much more payment security to the beneficiaries than revocable letters of credit because of the reasons
explained above. As a result irrevocable letters of credit are the types of LCs that dominantly seen on the market
Banks will only add their confirmation to the irrevocable letters of credit. A confirming bank is not obligated to add its
confirmation to any amendmend. Also, transferable letters of credit should not be issued in a revocable form.
Letters of credits are transmitted through banks via a secure and authanticated system which is called SWIFT. There
are various swift message types for different situations. For example banks use MT700 ( Message Type 700 ) when
issuing a letter of credit. We will examine SWIFT messages detailly later on. Here we want to explain one section of
MT700 swift message (Issue of a Documentary Credit) which contains the information regarding the type of the
documentary credit.

In order to understand the letter of credit type we need to check Field 40A in a MT700 swift message. This field
contains the necessary information regarding the form of the documentary credit. There are seven possiblities as
seen below.

IRREVOCABLE : The documentary credit is irrevocable.

REVOCABLE: The documentary credit is revocable.
IRREVOCABLE TRANSFERABLE: The documentary credit is irrevocable and transferable.
REVOCABLE TRANSFERABLE: The documentary credit is revocable and transferable.
IRREVOCABLE STANDBY: The standby letter of credit is irrevocable.
REVOCABLE STANDBY: The standby letter of credit is revocable.
IRREVOC TRANS STANDBY: The standby letter of credit is irrevocable and transferable

Consular Invoice
A document, required by some foreign countries, describing a shipment of goods and showing information such as
the consignor, consignee, and value of shipment. Certified by a consular official of the foreign country, it is used by
the country's customs officials to verify the value, quantity, and nature of the shipment.
Customs Invoice
Customs Invoice is also known as commercial invoice which is a bill for the goods from the seller to the buyer.
Commercial invoices are utilized by customs officials to determine the value of the goods in order to assess customs
duties and taxes.
In general there is no standard form for a commercial invoice although they tend to contain many of the following
seller's contact information
buyer's contact information
consignee's contact information (if it is different from the buyers)
invoice date
a unique invoice number
sales terms (usually in incoterm format)
payment terms
currency of sale
full quantities and description of merchandise (Generally this includes unit price and total price. Product descriptions
should be consistent with the buyer's purchase order. Including the Harmonized System commodity codes can be
helpful, especially in countries that are WTO members.)
certification that the invoice is correct (Standard language is "We certify that this invoice is true and correct."
Trust the above clarifies your query.
As such, depending on the type of products to be shipped or the special services needed from them, container units may vary in
dimension, structure, materials, construction etc. various types of shipping containers are being used today to meet requirements of
all kinds of cargo shipping. Some of the most common types of shipping containers in use today are mentioned below.
Dry storage container
The most commonly used shipping containers; they come in various dimensions standardized by ISO. They are used for shipping of
dry materials and come in size of 20ft, 40 ft and 10ft.
Flat rack container
With collapsible sides, these are like simple storage shipping containers where the sides can be folded so as to make a flat rack for
shipping of wide variety of goods.
Open top container
With a convertible top that can be completely removed to make an open top so that materials of any height can be shipped easily.
Tunnel container
Container storage units provided with doors on both ends of the container, they are extremely helpful in quick loading and unloading
of materials.
Open side storage container
These storage units are provided with doors that can change into completely open sides providing a much wider room for loading of

Double doors container
They are kind of storage units that are provided with double doors, making a wider room for loading and unloading of materials.
Construction materials include steel, iron etc in standardized sizes of 20ft and 40ft.
Refrigerated ISO containers
These are temperature regulated shipping containers that always have a carefully controlled low temperature. They are exclusively
used for shipment of perishable substances like fruits and vegetables over long distances.
Insulated or thermal containers
These are the shipping storage containers that come with a regulated temperature control allowing them to maintain a higher
The choice of material is so done to allow them long life without being damaged by constant exposure to high temperature. They are
most suitable for long distance transportation of products.
Container storage units used mostly for transportation of liquid materials, they are used by a huge proportion of entire shipping
industry. They are mostly made of strong steel or other anti corrosive materials providing them with long life and protection to the
10. Cargo storage roll container
A foldable container, this is one of the specialized container units made for purpose of transporting sets or stacks of materials. They
are made of thick and strong wire mesh along with rollers that allows their easy movement. Availability in a range of colored wire
meshes make these shipping container units a little more cheerful.
11. Half height containers
Another kind of shipping containers includes half height containers. Made mostly of steel, these containers are half the height of full
sized containers. Used especially for good like coal, stones etc which need easy loading and unloading.
12. Car carriers
Car carriers are container storage units made especially for shipment of cars over long distances. They come with collapsible sides
that help a car fit snugly inside the containers without the risk of being damaged or moving from the spot.
13. Intermediate bulk shift containers
These are specialized storage shipping containers made solely for the purpose of intermediate shipping of goods. They are
designed to handle large amounts of materials and made for purpose of shipping materials to a destination where they can be
further packed and sent off to final spot.
14. Drums
As the name suggests, circular shipping containers, made from a choice of materials like steel, light weight metals, fiber, hard plastic
etc. they are most suitable for bulk transport of liquid materials. They are smaller in size but due to their shape, may need extra
15. Special purpose containers
Not the ordinary containers, these are the container units, custom made for specialized purposes. Mostly, they are used for high
profile services like shipment of weapons and arson. As such, their construction and material composition depends on the special
purpose they need to cater to. But in most cases, security remains the top priority.
16. Swap bodies
They are a special kind of containers used mostly in Europe. Not made according to the ISO standards, they are not standardized
shipping container units but extremely useful all the same. They are provided with a strong bottom and a convertible top making
them suitable for shipping of many types of products.
Marine transport of the container
4.1 General
Container ships are regular liners integrated into a uniform transport chain of which they are the maritime link. They have to meet
two essential requirements:
- large container capacity to satisfy the market and achieve the lowest possible cost;
- imperative compliance with schedules to obtain the best performance from the transport chain. It was therefore necessary to build
ships with a large container capacity, constant cruising speed and a maximum breadth imposed by the Panama Canal.
4.2 The various types of container ship
- - The cellular container ship: has cells delimited by sliding partitions that can be fixed or dismountable.
- The full container ship: transports only containers.
- The semi-container ship: conventional ship having one or two cellular holds.
- The carrying PC: the rear of the ship is reserved for roll-on roll-off tweendecks, the front for cellular holds.
- The bulk container ship: the holds and the deck can accommodate containers.
- The panamax container ship: breadth less than 32.30 m.
- The open container ship.
- The overpanamax

For ships that do not use the Panama Canal, the breadth increases from 32.30 to approximately 39m. Shipowners however awaited
the end of the 1980s to take this step. The dimensions of these ships are limited today by the length of the berths in container
terminals (300 m) and by the reach of handling gantries in ports EUROPEAN COMMISSION - CUSTOMS 2002
4.3 Cross-section of a container ship
The container holds occupy the space between the bulkhead in front of the engine and the boarding bulkhead. A significant number
of stiffeners and a substantial ballasting capacity justify the use of a double hull. There are numerous powerful mooring winches to
avoid any displacement of the ship during commercial transactions
4.4 Stowing the containers
Containers are stowed longitudinally, the doors facing rearwards or towards the middle of the bay. They can be stowed on deck or in
the hold. The number of 40-foot cells in the hold is limited. 1/2-height containers have places reserved forward, at the end of the
hold. The deck will be reserved in general for the strongest containers or for 20 foot containers (lighter and more speedily handled).
This is where refrigerated containers are also found (owing to the presence of power points and the need for surveillance). The
number of "stacked" containers depends on their strength (between 6 and 9). 4.5 Securing the containers on board
The mechanical stresses to which the container is subjected during the transport by sea are enormous: the container is subjected to
static stresses caused by securing and dynamic stresses caused by the movements of the ship at sea. As the ship has a schedule
to which it must operate, it chooses the shortest (not always the calmest) route and except on safety grounds, there is no question
of reducing speed in bad weather.
4.5.1 In the hold
Containers are held in place, stacked up on top of one another (up to 9 high) in cells consisting of 4 vertical sliding partitions fixed to
the structure of the ship. Intermediate platforms can be inserted at the sixth level so as not to exceed the maximum load on the
lower containers. The sliding partitions are widened at bridge level to facilitate loading.
4.5.2 On deck
Traditional method: Containers are held in place by more or less elaborate securing equipment: on the bridge (and panels):
anchoring shoes designed to accommodate the corner fittings of the containers and loop fittings or securing parts for fixing by
chains or bars which are connected to the upper corner fittings by hooks, "eyes" or horns. Securing is stiffened by "chain stiffeners",
"pawl" stiffeners or by turnbuckles or pneumatic or hydraulic jacks. Containers are secured together by double or single cones,
boltable or not. 4.6 Location of containers on board
The hold and the deck are divided into:
- TIERS, in order to locate precisely each container slot on the bridge or in the
What is the difference between intermodalism and multimodalism?
In: The Difference Between [Edit categories]
The movement of international shipments via container using sequential transportation modes (water, air and land) makes use of
the most efficient cost-effective methods to move goods. An entire new set of terms has developed around this concept of
Intermodal transportation is generally defined as a system of transport whereby two or more modes of transport are used to
transport the same loading unit in an integrated manner. While multimodal is the continuous movement of goods by more then one
means of transport.
An example of intermodal is a common shipping container (20', 40' etc) that is delivered to a shippers dock, loaded with freight
and sealed, the loaded container is released by the shipper to a transportation company and transported by truck, (rail) truck, to a
port where it is loaded on a ship for marine transport, off loaded at the destination port (customs), and moved via truck or rail to the
final destination wherethe container is opened and it is unloaded.
An example of multimodal is: the shipper loads pallets of freight, they are released to a shipping co, and loaded into a truck. the
pallets of freight is delivered to a marine freight dock where it is loaded onto a ship, carried by the ship across the water to the
destination port where it is off loaded to a warehouse or truck (customs) and delivered by truck to the reciever
Intermodal transport
Intermodal transport is a particular type of multimodal transport, wherein the goods are moved in one and the same
loading unit, for example: containers. Intermodal transport uses more than one mode of transport, however, since the
loading unit remains the same, the goods being transported, are themselves not handled each time there is a change of
Development of intermodal transport specifically requires growth of loading units which are usable across multiple

modes. Containers are the most commonly known examples. Lately, more innovative methods are being used.
Roll-on/Roll-off: This mode combines different means of transportation (sea and road), and is used most often with
new automobiles, which are shipped by sea and them simply driven off the vessel to the importers warehouse. Heavy
and over-dimensional cargo is also suitable for Ro-Ro transport.
Lighter Aboard Ship: LASH transport is the combination of deep sea and inland waterway transportation. Barges
operating on inland waterways can be loaded onto a LASH and carried across sea to the destination port.
Subsequently, the unloaded barge can carry cargo further to the hinterland.
It must be noted that LASH vessels are expensive. Furthermore, it is necessary to check on the availability of the
special handling facilities necessary in the ports of origin and destination.
Piggyback / Trailer train: This is a system of unitised multimodal land transportation, a combination of transport by
road and rail. It combines the speed and reliability of rail on long hauls with the door-to-door flexibility of road transport
for collection and delivery. The goods are packed in trailers and hauled by tractors to the railway station. At the station,
the trailers are moved onto railway flat cars and the transport tractors, which stay behind, are then disconnected. At
destination, tractors again haul the trailers to the warehouses of the consignee.
The system has undergone refinements and sophistication by the introduction of the so-called "trailer train" which uses
the same trailer as a vehicle on the road and a rail vehicle on the rail. In other words, the trailer moves on its wheels as
a truck on the road but the wheels can be retracted by an air suspension system and connected to a rail bogie for
movement by rail. At the end of the rail journey, the conversion back to being road vehicle is effected for delivery of the
goods to the customers.
Sea train: This is another innovation in the multimodal transport system involving the use of rail and ocean transport. It
is similar to the Ro-Ro system except that in the place of the Ro-Ro vehicle a rail car is used so that geographically
separated rail systems can be connected by the use of an ocean carrier. Typically these vessels are long and thin and
consist of one main deck running the length of the ship. They are quicker at loading trains than general cargo vessels
since the trains carriages do not need to be detached from one another.

International Chamber of Commerce

International Logistics
When shipping a product overseas as part of a commercial transaction, the exporter must be aware of packing, labeling,
documentation, and insurance requirements.
To ship a product overseas, exporters have at least four options. Many exporters rely on an international freight forwarder to perform
these services. Some companies utilize the services of Shippers Associations. Other companies use express delivery or mail
services. It is also possible for exporters to arrange their own shipping.
You can find out more about shipping at the U.S. Customs and Border Protection web site. Exporters should evaluate each option to
determine which one works best for their unique situation.
Incoterms 2010
The new INCOTERMS 2010 became effective January 1, 2011. Incoterms--which is an abbreviation for International Commercial
terms--is a series of sales terms. They are published by the International Chamber of Commerce (ICC) and are widely used in
commercial transactions. In addition to providing a set of rules for the interpretation of commonly used trade terms, INCOTERMS
2010 accomplish the following:
1. Significantly revises Group D listed in INCOTERMS 2000;
2. Reduces Incoterms from four groups to two groups, allowing trade experts to choose the most suitable rule related to the mode of
transport; and
3. Reduces the absolute number of Incoterms from 13 to 11.
Moreover, INCOTERMS 2010 offers additional guidance which assists users in selecting the most appropriate Incoterm for each
transaction. The revised terms also spell out rules regarding the use of electronic procedures; detail information on security-related
clearances for shipments; and offer advice with respect to domestic trade.
Schedule B and HS Numbers
The Harmonized System (HS) assigns a 6-digit number to each product that is traded internationally. Each country can assign, on
its own, four additional numbers, making the entire number 10 digits. The United States does this with its Schedule B system.
Tariffs and Import Fees
Tariffs or duties are a tax levied by governments on the value of products imported from one country into another. Before you export
to any country, you need to determine what the tariff rate is on your product(s) as well as any import fees for that country.