Foreign trade always has risks, and no matter how cautious we are, we cannot guarantee 100% safety. However, as long as we have a thorough understanding of various settlement methods, especially the principles and operations of letters of credit, we can minimize the risks. In particular, foreign trade is a document transaction, and preparing a set of clean and correct documents is more than half of the success.
Among the whole set of documents, the most important is the proof of property rights – bill of lading. Especially because the bill of lading is issued by a third party – shipping company or freight forwarding company, we cannot directly control it, so it is far more expensive and risky than other documents. As an industry that is closely related to foreign trade, ocean shipping is no less complex than foreign trade, and is also full of various industry terms and has great flexibility in operation. In the entire foreign trade transaction structure, there is a period of time when the goods are in the hands of freight companies. Therefore, a deep understanding of ocean freight and a tacit cooperation with freight companies can greatly resolve the risks of foreign trade.
Shipping companies and freight companies that undertake ocean transportation mean much more to us than just “transportation”. They can let us control the overall situation, but they can also make us lose both money and goods. They can be as close as brothers, but they can also hate us to the core. Foreign trade and freight are a pair of happy enemies.