Question

1. Describe in detail how a Letter of Credit is used in an international transaction.

2. From a handling perspective, what is one advantage of a unit load?

Answer 1

1. A letter of credit is a report from a bank that ensures installment. There are a few kinds of letters of credit, and they can give security when purchasing and selling items or administrations.

Seller protection: If a purchaser neglects to pay a dealer, the bank that gave a letter of credit must compensation the vender as long as the merchant meets the entirety of the necessities in the letter. This gives security when the purchaser and merchant are in various nations.

Buyer protection: Letters of credit can likewise ensure purchasers. In the event that you pay someone to give an item or administration and they neglect to convey, you may have the option to get paid utilizing a backup letter of credit. That installment can be a punishment to the organization that couldn't perform, and it's like a discount. With the cash you get, you can pay another person to give the item or administration required.

For international exchange, the dealer may need to convey the product to a shipyard for fulfilling the necessities of the letter of credit. When the product is conveyed, the dealer gets documentation demonstrating that they made conveyance, and the archives are sent to the bank. Now and again, basically setting the shipment onboard a vessel triggers the installment, and the bank must compensation—regardless of whether something happens to the shipment. On the off chance that a crane falls on the product or the boat sinks, it's not really the vender's concern.

2. Unit loads give an economical means of taking care of, putting away, and shipping by eliminating manual treatment of individual things and minimizing the rate of pilferage

Advantages

• More things can be dealt with simultaneously, consequently diminishing the number of outings required and, conceivably, lessening taking care of costs, stacking and emptying times, and item harm.
• Empowers the utilization of normalized material dealing with equipment