What is a shipping guarantee process?
Shipping Guarantee (SG) process is an indemnity given by the customer, countersigned by the Bank, to a shipping company or its agent to allow the shipping company to release the goods to the customer (consignee named in the Bill of Lading) without the presentation of the original Bill of Lading. It refers to a written guarantee, issued by the bank which will bear joint liability, and is presented by the importer to the carrier or its agent for picking up the goods in the case of arrival of cargo prior to the shipping documents. Shipping Guarantee is commonly used under L/C with full set of documents of title to goods.
The product can help importers pick up the goods in time to avoid port demurrage.
1. Reduction of capital tied up. Pick up and resell goods in advance with bank credit in order to speed up circulation of capital and reduce capital tied up.
2. Grasp market opportunities. It will assist importers in obtaining documents of title to goods, picking up and reselling goods in case of arrival of goods prior to documents.
3. Less financial expense. Importers can pick up goods in time to avoid demurrage charge.
0.05% of shipping guarantees invoice value, with minimum charge of RMB 500, and collected on quarterly basis.
It is applicable in the case of short shipping voyage and the goods arriving prior to the documents.
1. The business license of enterprises legally approved, registered and annually checked and other valid certifications sufficient to prove the legitimacy and scope of its operation;
2. Loan cards;
3. The account opening permit and a settlement account with Bank;
4. The qualification of import and export operation;
5. The credit line in Bank or deposit margin in full amount.
As goods arriving prior to the documents under L/C or collection (including original bill of lading), the importer submits the shipping guarantee application to Bank. After strict examination, Bank offers the shipping guarantee for the importer. The importer picks up the goods from shipping company (or other carriers) by presenting shipping guarantee issued by Bank. When documents under L/C or collection arriving, the importer shall take documents against payment terms in Bank, and then exchange for the shipping guarantee with the original bill of lading from shipping company (or other carriers) and return it to Bank.
1. The basic premises of issuing shipping guarantee: a. L/C settlement; b. Ocean freight; c. L/C requires presenting full set of shipping documents;
2. Shipping guarantee shall be applied to the issuing bank;
3. You are required to have a credit line or single credit extension approved by Bank which offers the shipping guarantee;
4. You have to undertake to the bank which offers shipping guarantee that the documents shall be honoured or accepted when documents arriving with or without discrepancies;
5. When original bill of lading arrives, you shall exchange the shipping guarantee format with the original bill of lading from shipping company, and then return the documents to the bank for cancellation.