This was Happened  When  A regular Long term sales-contract and continuous order been held on.

 example:  A Sole agent or Distributor importing from B manufacturer. The payment is in L/C.

 A is doing export to many different countries and do "Switch B/L" for every delivery/shipment.

The customers of A are so many,  Buying Order are coming more then 10 orders/month.

 

 It will be very in efficient if A has to apply L/C for B upon every each order from each clients ?

 So  A  apply/open  a big amount of L/C  that is big enough to cover their order in 1 year order.

 with a term of "Partial Shipment are allowed".

 In this way B no need to ask some new L/C for every P/O that B may get by week to weeks.

 So, the same L/C will be used for every order by B until the value/nominal of the L/C is over limit.

 





 

Quoting from [Oneuni]:


This was Happened  When  A regular Long term sales-contract and continuous order been held on.


 example:  A Sole agent or Distributor importing from B manufacturer. The payment is in L/C.


 A is doing export to many different countries and do "Switch B/L" for every delivery/shipment.


The customers of A are so many,  Buying Order are coming more then 10 orders/month.


 


 It will be very in efficient if A has to apply L/C for B upon every each order from each clients ?


 So  A  apply/open  a big amount of L/C  that is big enough to cover their order in 1 year order.


 with a term of "Partial Shipment are allowed".


 In this way B no need to ask some new L/C for every P/O that B may get by week to weeks.


 So, the same L/C will be used for every order by B until the value/nominal of the L/C is over limit.


 






 

Actually I now understand what your saying.  But, in business banking this would best be supported by the revolving L/C know to all International trading banks.

Ranger

Quoting from [Ranger]:

Actually I now understand what your saying.  But, in business banking this would best be supported by the revolving L/C know to all International trading banks. Ranger

      Thanks Mr Ranger,

      Do this REVOLVE L/C, after get the expiry date could be extended  and added(re-fill) the

      fund , as in  Bulk L/C,  the Buyer just instruct the issuing bank to refunding/increase the     

      amount of  credit and to the same L/C number  w/o  re-issue another new l/c one.


      The competent of  using the bulk l/c are also existing in a sort of Drop shipping Supply.

      e.g.:  An Authorized Dealer Sole Agent  cut down their cost of  distribution by doing drop

      ship deliver,  they do not do re-export / re-shipment,  just ask the manufacturer/producer to

      ship directly from the origin port of producer to Buyer/End User.

      They do not need to arrange back to back l/c or transferable l/c for each order to the factory.

      neither not the Tran shipment. 

     They just need to apply the Switch b/l  and the blank endorsement  in it.

      regards,

     

     

Quoting from [Oneuni]:

Quoting from [Ranger]:


Actually I now understand what your saying.  But, in business banking this would best be supported by the revolving L/C know to all International trading banks. Ranger

      Thanks Mr Ranger,


      Do this REVOLVE L/C, after get the expiry date could be extended  and added(re-fill) the


      fund , as in  Bulk L/C,  the Buyer just instruct the issuing bank to refunding/increase the     


      amount of  credit and to the same L/C number  w/o  re-issue another new l/c one. 



       regards, 


       

As suggested by Ranger, a revolving LC would better suit the transaction than a 'bulk LC'. It would also cost less. The 'revolving' of the LC can be structured in various ways to suit the parties. For example, the value of the LC can be reinstated once the earlier consignemnt is paid. Or, the shipment can be limited to a particular value for a given period (say every month); so that the same amount is again available next month. In a revolving LC one of the issues is that the description and terms of the goods shipped should remain the same for every shipment.

to Mr Catalyst,


Thanks for the explanation, 

I can see why it is be named  revolving ... to revolve  ...as  a revolver ...

again and again  ...in  such a same terms & condition...


regards,

Quoting from [Oneuni]:


to Mr Catalyst,



Thanks for the explanation, 


I can see why it is be named  revolving ... to revolve  ...as  a revolver ...


again and again  ...in  such a same terms & condition...



regards,

With the same result....very effective if the aim is right!

Quoting from [Catalyst]:

Quoting from [Oneuni]:


to Mr Catalyst,


Thanks for the explanation, 


I can see why it is be named  revolving ... to revolve  ...as  a revolver ...


again and again  ...in  such a same terms & condition...


regards,

With the same result....very effective if the aim is right!

      Mr Catalyst & Mr Ranger,

      When the  Purchasing Order are good for  more then 100 items (mix items) with vary of

      size and design, although the contract - order  is for a regular yearly period one,

      the results are,  each stuffing contents of each Packing List & Invoice would be not in

      the same amount ( volume & Value),  although nowadays it can be programmed for the

      loading/stuffing plan into a 3D  container-space. However some time the production line

      output of certain Items (size of products) also be the factor of  making this variable.

      In this case, we were applying the partial shipment allowed and  open a master L/C that

      we  called it  BULK L/C. 

      When I was in  Float Glass Industry, as the export staff, we were in the Int'l Bids for

      Supply/export Gl (building) to Korea for  "Olympic-game". It was 1,000 containers

      x 20 FT  that should be accomplish (prosecuted) with in 6 months. (aprox 170 TEUS/mth)

      and the sizes of the glass are from the thicknesses of 3mm up to 20 mm, with the size

      of  more than  57 sizes ..also in  few colors ( Clear, Grey, Dark Grey, Bronze, Blue etc )

      and  imagine how the documents and the L/C transaction are ? 

      So, to operate it with more efficiency,  we were agreed to use  Bulk-L/C that been back to

      backed  by Mitsui- bank at SIN and  our  Negotiator was  Bank Of Tokyo.- Jakarta. 

      these L/C are long term expiry date ones for  partial shipment allowed.

      We did not use revolving L/C because of those reason above. 

      " Each container would not in the same size, volume and amount."

      so the Bill of Exchange, Invoice & Packing List  would not be the same.

      regards,

     

         

      .

     

     

 

  hope that above explanation would be sufficient

Quoting from [Oneuni]:


  hope that above explanation would be sufficient

       Gentlemen,

       Can we close this chapter to end it up ? thank You