L/C, T/T or escrow: payment terms for a first charcoal order

On a first order, price is the easy conversation. Charcoal payment terms are the conversation that decides whether the shipment happens at all. The supplier wants to be sure of being paid; you want to be sure of receiving the goods that were agreed. No payment method gives both sides everything, so each one shifts the risk in a different direction.

Kora’s product pages list several payment routes: letter of credit at sight, telegraphic transfer (T/T), an escrow platform, and documents against payment for established buyers. This note describes what each means for you and what to examine before choosing one.

Four routes in plain terms

T/T (telegraphic transfer). You send money by bank transfer. The key question is when: before shipping, in part, or after the documents are sent. The earlier you pay, the more you trust the supplier. The later you pay, the more the supplier trusts you. A common middle path is a part payment before production and the balance against copies of the shipping documents, but the split is for you and the supplier to agree. We do not publish a standard split because Kora has not published one.

L/C at sight (letter of credit). Your bank promises to pay the supplier when the supplier presents documents that match the credit’s terms exactly. The supplier is paid on documents, not on goods. For you, the bank’s promise is conditional on the paperwork. For the supplier, it is a payment promise from a bank rather than from you alone.

Escrow platform. A third party holds the funds until agreed conditions are met, such as confirmed delivery. Terms, fees and what counts as a condition depend on the platform. Ask which platform Kora would use and what evidence releases the funds.

D/P (documents against payment). The supplier sends the shipping documents through banks and you receive them only when you pay. It suits parties who have traded before, which is why Kora lists it for established buyers. It is not a guarantee of the goods themselves.

What each route protects

• A bank-based credit protects the supplier’s payment and makes the buyer comply with a document list. It does not protect you from a cargo that differs from its papers if the papers are right.
• A transfer after documents protects the supplier less; a transfer before shipment protects you less.
• Escrow protects both only as far as its release conditions are specific and checkable.

State the risk you are most worried about and choose the route that addresses it, rather than the route you know best.

The documents the payment hangs on

With an L/C or D/P, payment depends on documents, so the document list is your real contract. The documents Kora lists are a certificate of analysis, a phytosanitary certificate, a certificate of origin, a packing list and a bill of lading. For each, decide before the credit is opened:

• the exact name and number of originals and copies;
• who issues it and in what language;
• which data must match across documents: consignee, product description, weights, container and seal numbers, port names;
• the latest date by which documents must be presented.

A single mismatch, such as a different spelling of a consignee’s name, can hold up payment. Prepare a draft of each document and agree it before the goods ship.

What to ask the supplier

• Which routes it accepts for a first order, and which only for repeat buyers.
• For T/T, the proposed split and the trigger for each payment.
• For L/C, the terms it wants: confirmation, shipment window and presentation period.
• Which bank details it uses, and how you verify them. Confirm bank details by a channel you already trust, not only by the message that supplied them. Payment fraud often starts with a changed account number.

What to ask your own bank

• Whether it can issue the credit for the amount and goods, and its charges.
• The documents it will insist on, and any restrictions on the goods or the route.
• How long issuing takes, since shipment dates depend on it.

We do not quote charges, limits or timing here. They depend on your bank and your country.

Fit charcoal payment terms into the schedule

Payment terms interact with shipping. A credit that takes two weeks to open delays loading. A balance due on copy documents ties payment to the bill of lading date. Put the payment steps beside the shipping dates in one timeline, and confirm each step has an owner.

Request a quotation with your preferred route

See what Kora prints for lump charcoal on the import page, then tell us the route you prefer in your request through the contact page. Charcoal payment terms are fixed in the quotation, and the first reply comes within two business days.