The process of export business includes many links such as preparing goods, urging documents, checking documents, amending documents, chartering ships, booking cabins, customs declaration, inspection, insurance, loading and settlement of exchange. Among them, the four links of goods (preparation), documents (urging, checking, amending), ships (chartering, booking) and payments (settlement of exchange) are the most important.
1. Preparation of Goods
According to the requirements of quality, packaging, quantity, and delivery time specified in the contract, preparation work for the goods is carried out. During the preparation process, the following points should be noted:
1. Quality of goods: The quality and specifications of the goods should be verified according to the requirements of the contract. Processing and sorting may be required when necessary to ensure that the quality and specifications of the goods match those specified in the contract.
2. Quantity of goods: Ensure that the quantity satisfies the requirements stated in the contract or letter of credit. An appropriate margin should be left during preparation to accommodate possible replacements during shipment and adapt to the cargo hold capacity.
3. Packaging and marking (shipping marks): Carefully check and verify these to ensure they comply with the provisions of the letter of credit. They must meet the requirements for protecting the goods and adapting to transportation needs. If poor or damaged packaging is found, it should be repaired or replaced promptly. Markings should be brushed according to the style specified in the contract.
4. Preparation time: According to the provisions of the letter of credit, combined with the shipping schedule, to facilitate the connection between ship and goods.
2. Confirming the Letter of Credit
In executing contracts where payment is made through a letter of credit, control, management, and use of the letter of credit directly relate to the implementation of China's foreign policies and the safety of receiving payments. Confirming the letter of credit includes three aspects: urging issuance, checking, and amending the letter of credit.
(1) Urging the Issuance of the Letter of Credit
If both parties agree to use a letter of credit in the export contract, the buyer should strictly adhere to the contract’s regulations and issue the letter of credit on time, which is a condition for the seller to fulfill the contract. However, in actual business operations, sometimes overseas importers may delay issuing the letter due to market changes or insufficient funds. In such cases, we should urge the other party to quickly handle the issuance procedures. Especially for large-scale commodity transactions or custom-made goods at the request of the buyer, timely urging should be done based on the preparation status of the goods. When necessary, our overseas institutions or the Bank of China can also assist in urging the issuance.
(2) Checking the Letter of Credit
A letter of credit is a guarantee document of bank credit. However, the bank's credit guarantee is conditional upon the beneficiary submitting documents that conform to the terms of the letter of credit. Therefore, the credibility of the issuing bank and the contents of the letter of credit all relate to the safety of receiving payments. To ensure safe receipt of payment, our foreign trade enterprises carefully check and review the letter of credit received from overseas customers through banks. Verifying and reviewing the letter of credit is a very important task. Doing this well is crucial for implementing China's foreign trade objectives and policies, carrying out the task of goods loading, delivering freight documents as per the contract, and ensuring timely and safe collection of payments.
In general, when reviewing incoming letters of credit, the following aspects should be considered:
1. General Review Points:
- Policy review.
- Review of the issuing bank's creditworthiness.
- Review whether the letter of credit has taken effect, and if there are any reservation or restrictive clauses.
- Review whether the letter of credit is irrevocable. Letters of credit received from abroad that China can accept must be irrevocable.
2. Special Review Points:
- Payment currency
- Letter of credit amount
- Expiry date, submission period, and latest shipment date.
- Transshipment and partial shipments.
- Applicant and beneficiary, powder material truck parameters.
- Payment term
All of the above content must strictly correspond with the letter of credit. In actual business operations, banks and import-export companies jointly bear the responsibility of reviewing the letter of credit. Banks focus on reviewing the political background, creditworthiness, payment obligations, and remittance routes of the issuing bank, while import-export companies concentrate on reviewing the contents of the letter of credit.
(3) Amending the Letter of Credit
In practical business operations, after the exporting company has comprehensively and meticulously reviewed the letter of credit, when issues are discovered, they should be handled differently based on their nature. Sometimes coordination with relevant departments such as banks, transportation, insurance, and inspections is needed before an appropriate decision can be made. Generally speaking, any issues that do not align with China's foreign trade policies, affect the fulfillment of the contract, or jeopardize the safety of receiving payments must require the overseas customer to amend the letter of credit through the issuing bank. Only after receiving confirmation from the bank regarding the amendment of the letter of credit can the goods be shipped. For issues that can be modified or omitted without significant impact, or that can be achieved with reasonable effort, discretion can be exercised. In some cases, no amendments may be made, and the letter of credit provisions can be followed.
In a single letter of credit, it is common to have multiple clauses requiring modification. It is advisable to address all modifications at once to avoid unnecessary procedures and costs, which could negatively affect external relations. Additionally, any received letter of credit amendment notices should be carefully reviewed. If errors or unacceptable modifications are found, the right to refuse acceptance exists. A refusal notice should be sent to the advising bank promptly to avoid affecting the smooth execution of the contract.
To prevent fraud and facilitate the full implementation of the terms specified in the letter of credit, the amendment notice should be transmitted or notified through the original advising bank. If sent directly by the applicant or issuing bank, verification through the original advising bank should be requested. For accepted or acknowledged letter of credit amendments, they should be immediately attached to the original letter of credit and marked with the number of amendments to prevent separation from the original document, which could lead to incomplete terms and affect timely and safe receipt of payment.
3. Arranging Shipment
Arranging the shipment of goods involves numerous working stages, among which consignment, customs declaration, shipment, and sending shipment notifications are particularly important.
Consignment
Arranging the shipment of goods involves numerous working stages, among which consignment, insurance, customs declaration, shipment, and sending shipment notifications are especially important. Currently, in China, for export contracts arranged by us, the external shipment of goods, renting transportation vehicles, and handling specific transport-related matters are usually entrusted to China Foreign Trade Transportation Corporation or other enterprises specializing in foreign trade transportation agency services. Therefore, after the goods and documents are ready, the export enterprise should immediately handle consignment procedures with the foreign transportation institution.
When consigning, in addition to preparing consignment documents, various certificates and documents related to this batch of goods must also be attached, such as delivery orders, commercial invoices, detailed lists of export goods (packing lists), export customs declarations, export foreign exchange receipts, etc. Some goods may also require providing export licenses, quota licenses, customs clearance certificates, and commodity inspection certificates for customs verification and release.
Steps for the export enterprise to handle consignment with the foreign transportation institution are as follows:
(1) Check the ship schedule and fill out the consignment form for export goods.
(2) The shipping company or its agent issues the loading order.
Insurance
When handling insurance procedures, it is generally necessary to fill out a foreign transportation insurance application form, specifying the name of the insured, the name of the goods, the markings, the transportation route, the ship name or mode of transport, the departure date, the voyage, the type of insurance coverage, the insurance amount, the date of insurance application, the claim location, etc. The insurance company will consider accepting the insurance and prepare the insurance documents accordingly.
Customs Declaration
As stipulated by the Customs Law: All goods entering or leaving the country must pass through ports, stations, or international airports equipped with customs offices, and the owner of the goods must declare to the customs. After customs inspection and release, the goods can be extracted or shipped for export. Therefore, only after completing customs procedures can the importer or exporter extract or ship the goods.
Shipment
Before the carrier vessel arrives at the port, the foreign trade enterprise or the foreign transportation institution arranges for the cleared export goods to be stored in designated warehouses within the port area according to the port's stacking plan. After the ship arrives, the port signs the port miscellaneous fee application form for the consignor and handles the extraction and loading of goods. Upon completion of loading, the chief officer of the ship or the second mate issues a receipt based on the actual loading situation. The foreign trade enterprise or the foreign transportation institution can then exchange this receipt with the shipping company or its agent for a marine bill of lading. After the goods are loaded onto the ship, the foreign trade enterprise or the foreign transportation institution prepares the marine bill of lading and submits it to the shipping company or its agent for signature. After verifying that the content of the marine bill of lading matches the content of the receipt, the shipping company or its agent officially issues the bill of lading, noting "shipped" and stamping the date of shipment.
Shipment Notification
After the goods are loaded onto the ship, the foreign trade enterprise should promptly send a "shipment notification" to the overseas buyer so that the latter can prepare for payment, redemption of documents, customs clearance for import, and receiving the goods. The content of the shipment notification usually includes order or contract number, letter of credit number, name of goods, quantity, total value, markings, port of shipment, date of shipment, ship name, and estimated sailing date. In actual business operations, the items should be appropriately listed in the message based on the requirements of the letter of credit and the client's practices.
4. Document Preparation and Settlement of Exchange
After the goods are shipped, the export enterprise should immediately prepare various documents according to the provisions of the letter of credit and submit them along with necessary evidence to the designated bank for requesting payment, acceptance, or negotiation procedures. After receiving the payment, the enterprise should settle the exchange with the bank.
There are three methods of settlement for exports in China: settlement after collection, advance payment, and regular settlement.
Document Preparation
For export documents, they must meet the requirements of "accuracy, completeness, timeliness, conciseness, and neatness." Commonly used export documents include:
1. Draft
2. Commercial Invoice
3. Transport Documents
4. Insurance Documents
5. Packing List
6. Certificate of Origin
7. Inspection Certificate
8. Customs Invoice
9. Other Certificates
Common ones include:
(1) Mailing Certificate
(2) Proof of Mailing Sample
(3) Copy of Shipment Notice
(4) Postal Receipt
(5) Relevant transport certificates, such as ship registration or voyage certificates, ship age certificates, ship grade certificates, etc., which the beneficiary should obtain from the shipping company or its agent.
Document Submission and Settlement of Exchange
Submission refers to the exporter (the beneficiary of the letter of credit) submitting documents that comply with the terms of the letter of credit to the designated bank before the expiration date and within the submission deadline. After confirming the documents are correct, the bank settles the export proceeds according to the payment conditions specified in the letter of credit.
After receiving the documents, the negotiating bank should immediately review them according to the provisions of the letter of credit and inform the beneficiary of the review results within no more than seven banking days from the date of receipt of the documents. If the review is successful, the bank should immediately send the documents to the issuing bank of the letter of credit or another designated paying bank for reimbursement and settle the proceeds according to the agreed method with the exporter. In our export business, settlement means that the bank purchases the received foreign currency at the bank's buying rate on the day's RMB market exchange rate, converts it into RMB, and pays it to the exporter. In our export business, negotiation letters of credit are used relatively frequently. There are mainly three methods of settlement for such letters of credit: "settlement after collection," "regular settlement," and "purchase settlement."
"Settlement after Collection": Also known as "collect first, settle later," this method involves the negotiating bank receiving the documents submitted by the beneficiary, reviewing them to confirm compliance with the terms of the letter of credit, and then sending the documents to the foreign paying bank for reimbursement. After the paying bank transfers the foreign currency to the negotiating bank, the latter settles the proceeds at the day's foreign exchange rate and pays them in RMB to the beneficiary.
"Regular Settlement": After receiving the documents submitted by the beneficiary and reviewing them successfully, the negotiating bank sends the documents to the foreign bank for reimbursement and settles the foreign currency proceeds into RMB and credits the beneficiary's account or delivers the proceeds within a specified period starting from the date of submission.
"Purchase Settlement": Also known as export discounting or negotiation, this method involves the negotiating bank purchasing the draft and/or documents submitted by the beneficiary after reviewing them to confirm compliance with the terms of the letter of credit. The bank deducts the cost from the negotiation date to the estimated date of receiving the payment and converts the net amount into RMB at the day's RMB market exchange rate and pays it to the beneficiary of the letter of credit.
Riveting Process for Chassis
1. Rivet Inspection and Selection
1) Rivet Looseness Check: Use the hammer tapping method and visual inspection to check all rivets on the chassis. If a loose sound is heard when lightly tapping the rivet with a hammer, mark it for re-riveting.
2) Removal of Old Rivets: When removing old rivets, to prevent deformation of the rivet hole, do not use chisels to remove the head of the rivet; instead, use the drilling method. Select a drill bit slightly smaller than the diameter of the rivet rod. Drill through the semi-circular head of the rivet (after using a center punch to make a pilot hole) until reaching the cylindrical part of the rivet rod. Insert a specialized punch into the hole and then hammer it to remove the old rivet. Avoid using gas cutting as it may damage the surface of the chassis and affect the quality of the riveting. In some difficult-to-drill areas, gas cutting can be allowed but care must be taken to avoid burning the plane of the chassis.
3) Rivet Replacement: If the rivet hole deforms excessively due to rivet looseness, use a slightly larger drill bit to enlarge the rivet hole or use a reamer to make it round, then replace it with a larger-diameter rivet.
4) Rivet Selection: To ensure riveting quality, select appropriate rivets. The length of the rivet = thickness of the riveted part + riveting length (1.3~1.6 times the diameter of the rivet). The rivet hole should be about 1mm larger than the diameter of the rivet.
2. Riveting Method
1) During riveting, if the two contact surfaces become uneven and small cracks appear after disassembling and reassembling the chassis, use a special screw rod fixture (or tighten with bolts) to press the two contact surfaces together flatly and align the holes of the two contact surfaces without allowing misalignment.
2) Place the rivet in the furnace and heat it to 800~1000°C. Select different support frames depending on the riveting position. The support frame should have a semi-circular concave mold. Quickly insert the heated rivet into the rivet hole so that the head of the rivet fits snugly against the concave mold of the support frame. Prepare a special semi-circular concave cover mold, place it over the rivet rod, and apply force vertically with a large hammer until the sound of the hammer changes. Stop hammering and use a cross-symmetric method to rivet one by one (for a certain riveting area). Preferably, use a pneumatic rivet gun to hold the cover mold for riveting, reducing labor intensity and ensuring riveting quality.
3) If no dedicated heating furnace is available, electric heating can be used, improving heating speed and facilitating riveting. As shown in Figure 2-117, the rivet is instantly heated red through a strong current via a transformer setup. The heating power supply is essentially an AC transformer, controlled by switching the primary coil on and off. Typically, it is a self-made dedicated power supply with a power of 20kVA. The primary voltage is 380V, wound with 19mm wire for 114 turns; the secondary voltage is 6V, wound with two pieces of 3mm thick, 130mm wide copper plates for 2 turns. The core is made of 0.5mm thick silicon steel sheets, each core column consisting of 240 sheets. Two flexible wires (seven strands of 50mm² battery wires connected in parallel) are drawn from the secondary end for heating the rivets. When in use, insert the rivet into the rivet hole of the chassis first. Secure a flexible wire about 1.5m long with a bolt on the chassis, and weld a 200mm long copper block to the end of another flexible wire about 2m long, directly pressing it against the heated rivet. Connect the circuit, and the rivet will turn red in about 10 seconds, allowing immediate riveting. If the first attempt fails, the rivet can be reheated and re-riveted, offering simple operation, high efficiency, low cost, and reliable riveting quality compared to furnace heating.
4) If electric heating equipment is unavailable and individual rivets need to be riveted temporarily, oxygen-acetylene flame can be used to heat the rivet.
5) Dedicated heating furnaces are suitable for situations where a large number of rivets need to be riveted.
3. Post-Riveting Inspection
1) After the rivet cools down, gently tap the head of the rivet with a hand hammer. There should be no loose sound.
2) The semi-circular shape of the rivet head should be smooth, and the diameter of the area where the rivet head adheres should be no less than three times the diameter of the rivet rod. A 0.25mm feeler gauge should not be able to fit in.
3) If the rivet is skewed or improperly riveted, it should be re-riveted.
4) Cracks in the head of the cooled rivet cannot be welded with electric welding and must be re-riveted.
5) Due to structural reasons of the chassis, near edges or corners, a few rivet heads may have gaps greater than 0.25mm but not exceeding 0.50mm with the mating surface.
6) The diameter of the rivet head should be more than 1.5 times the diameter of the rivet rod during hot riveting; after cooling, it should be more than 1.4 times the diameter of the rivet rod. When the length of the rivet is more than 3.5 times the diameter of the rivet rod, the diameter of the rivet head after riveting should be more than 1.3 times the diameter of the rivet rod.
The above content is jointly released by the Official Website of Sanitation Garbage Trucks (http://www.clwlu.com/)|www_clwlu_com and Professional Garbage Truck Manufacturers (http://www.clwwcw.com/)|www_clwwcw_com. For more exciting content: Garbage Truck Parameters. Even in summer, antifreeze is still necessary, often preventing potential dangers.
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