What is FOB ?
When you buy FOB , the exporter/supplier delivers and place goods on board of a vessel at the port of shipment which is specified in the sales contract or L/C. From the moment, The goods are loaded into the ship the supplier/exporter is not responsible for the risk of damage.

What is C&F?
It stands for cost and freight and it is a pricing term in which the exporter/supplier pays for cost and freight. In another word, the cost of freight is also included in the stated price of the goods.

What is CIF?
It stands for cost, insurance and freight and it is a pricing term in which the exporter payes for the freight And isurance of the goods. In another words, the cost of freight and insurance is also included in the stated price of the goods.

What is X Factory?
Price is only for product. Packing, Carton and all others by you(buyer).

What is Certificate of Origin?
It certifies where the product was made.

Letter of Credit (Confirmed):
It is a written document issued by the bank which states the terms and conditions set and agreed by the buyer and the seller in which the bank makes commitment to make payment to the seller.

What is Unrestricted L/C?
The shipper/exporter can take L/C from advising bank and negotiate with any other bank That he has account with so that he may want to get more bank facilities.

What is Transferable L/C?
Means the exporter can transfer the L/C to another supplier. The second supplier will Arrange the goods according to L/C terms and make shipment.

L/C procedure from start to end:

LC Transaction Diagram

LC is an application issued to the buyer by his bank upon request. The buyer has to fill out the application for LC and send it back to his bank. The issuing bank sends the L/C to the advising bank (sellers bank) by courier, Airmail or telex. The advising bank informs seller (beneficiary) of the LC arrival. After receiving the LC, the seller compares the LC with commercial invoice and makes sure that all the terms and conditions that are mentioned in the L/C can be satisfied. There should not be any discrepancy and if there is he should make amendments. The seller will ship the goods within the shipping period specifies in the LC and prepares all the documents such as invoice, packing list, etc before presenting the documents to his bank. Advising bank checks all the documents against the LC and if they match, the advising bank pays the Seller before sending the documents back to the issuing bank. Then the issuing bank checks all the documents and if every thing is fine, it pays to the advising bank. The issuing bank deduct the same amount from the buyers account and submit the documents to the buyer so that he can claim his goods from shipping company.

Packing List:
The quantity and the type of product is mentioned in the packing list.

Quotation (price list)
It is a price that is offered to the customer

Pro Forma Invoice:
An invoice prepared by an exporter before shipping, mentioning the goods to be sent, their value and other details.