The information provided here is part of Online export import training guide
Triangular Shipment – An introduction.
What is Triangular shipment? Who are the parties involved in a Triangular Shipment? How does triangular trade function? How many parties involved in a triangular trade minimum? How foreign exchange payments are accounted in Triangular business?
There are different dimensions in the term ‘triangular shipment’. Here I am explaining about one of them.
Let me explain Triangular Shipment with an example to make you easily understand.
You are situated in Mumbai, India. You have obtained an order from a buyer called ABC from Yang Min, China. As per your contract with your buyer in China, you need to ship the goods to a party called XYZ New York, USA. Here, the purchase order from final buyer has been obtained by ABC from China and he procures goods from you in India. You will be shipping goods to the port of XYZ at New York. This is one of the examples of ‘triangular shipment’.
I will explain once again to make easier on the above example of Triangular Shipment.
As far as you are concerned, your buyer is ABC and you will receive foreign payment from your buyer ABC in China. All your accountability is with ABC only and you have no connection with XYZ. In turn, ABC will be receiving purchase order from XYZ. ABC receives amount of sale of goods also from XYZ. ‘Certificate of origin of goods under triangular shipment’ is obtained from the final manufacturer of goods, here in this case ‘you’ situated in India.
I have written separate articles about Documentation procedures under Triangular Shipment and Payment procedures under Triangular Shipment. You can have a look in to the same to know more about Triangular Shipment in import export of international business. Read more Documentation for triangular shipment Bill of Lading procedures in triangular shipment What is switch Bill of Lading? Procedures and documentation on Triangular shipments
How to protect parties each other in triangular exports Payment procedures in Triangular exports
Switching documents in triangular Exports and imports
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The above information is a part of Import Export course online
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