Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the B’s.
Break bulk Cargo
Break bulk cargo consists of goods that are shipped and not containerized, such as vehicles and large machinery.
Binding Ruling
A binding ruling is a written decision by CBP in response to a written request for a ruling by an importer or other party pertaining to classification, valuation or marking of merchandise.
Back-To-Back Letter of Credit
A back-to-back credit is created when an exporter holding an irrevocable Letter of Credit persuades the buyer's bank (the advising bank) to open a second credit in favor of the merchandise supplier. The two credits finance the same shipment and are identical in all respects, except that the supplier becomes the Beneficiary of the back-to-back credit. Also, the amount of the second credit is less than the original export credit to make up for the import agent's commission. Banks are reluctant to issue these letters of credit because of the increased risk with multiple parties.
Break bulk Cargo
Break bulk cargo consists of goods that are shipped and not containerized, such as vehicles and large machinery.
Binding Ruling
A binding ruling is a written decision by CBP in response to a written request for a ruling by an importer or other party pertaining to classification, valuation or marking of merchandise.
Back-To-Back Letter of Credit
A back-to-back credit is created when an exporter holding an irrevocable Letter of Credit persuades the buyer's bank (the advising bank) to open a second credit in favor of the merchandise supplier. The two credits finance the same shipment and are identical in all respects, except that the supplier becomes the Beneficiary of the back-to-back credit. Also, the amount of the second credit is less than the original export credit to make up for the import agent's commission. Banks are reluctant to issue these letters of credit because of the increased risk with multiple parties.
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