Triangular shipment

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.Triangular Shipment (2)


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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Have you satisfied with this article about Triangular Shipment? Comment below your thoughts and discuss about Triangular Shipment in export and import trade.


Other details on how to import export  


Documentation for triangular shipment

Bill of Lading procedures in triangular shipment What is switch Bill of Lading?

How to protect parties each other in triangular exports

Difference between Purchase Order and Commercial Invoice

Difference between IHC and THC

Excise and Customs - Click here to read complete notification under Budget 2014

How to get Export Orders?

How to settle dispute in Exports and Imports?

Click here to know India Trade Classification(ITC)

Click here to know HS code of other product/commodity

Pre shipment bank finance to suppliers for exports through other agencies

Types of export containers
Measurement of export containers
Exim Policy of India 2015-2020
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation


Terms of Payment in Export and Import

Terms Used in Marine Insurance

 The difference between FCA and CIP terms

The formalities to sell / auction unclaimed or un-cleared goods

The legal strength of Bill of Exchange in International Trade. What is Bill of Exchange in International Trade.

The role of bill of exchange in import export business

The role of CBEC - Central Board of Excise and Customs in India.


 The role of Export Inspection Agency in Pre-shipment Inspection & Quality Control

The role of Reserve Bank of India

The Role of the International Chamber of Commerce (ICC)

The term FCL. What is FCL means

The term LCL. What does LCL mean?

 Tips to exporters on Documentation

How does a Running bond work?

 How does Bill of Lading work in DP payment terms?

How does Bill of Lading work in Sight LC

How does CENVAT Credit work?

 How does CFR term of delivery work in Export Import business

How does comprehensive policy of ECGC work for exporters?

 Top 137 Airline names and their websites worldwide

Toxic Substances control Act (TSCA) certification

Transferability of Bill of Lading

Transhipment - A redefinition

Travelers to India under import duty exemption, Frequently Asked Questions Part 2

Triangular export

 Triangular shipment

Types of Insurance Documents.

 How to make DA mode of payment safe

How to make delay in delivery of Shipment?

 How to minimize import cargo clearance time? An open logic proposal to WTO

How to obtain a duplicate BL, if original bill of lading lost.

How to obtain GSP - Certificate of Origin?

How to obtain Phyto sanitary certificate. What is phytosanitary certification


Hari nair: Hi I have customer who is doing triangular shipments.He is based in Mumbai and importing from Switzerland to Dubai.Everyhting is fine and we issue switch B/Ls for him but he is requsting us to issue a COO from malasia.Is this possible?? as per my shipping knowledge COO can be issued only from the manufaturing country.Here in this case from Switzerland. Do we have any other option to tackle this issue Awaiting yours. Hari Nair.

Kumar, Mumbai: Hi one of our customer need to do triangular shipment, he is situated in Germany and need to do the shipment to Africa, he is sourcing from India he had 10 to 20 suppliers from India, his intention is to do this triangular shipment as buyer console to his consignee in Africa. But for cost reduction he need to avoid switch BL's as it attracts cost's. Is there any way to avoid switch BL and to do triangular shipment by hiding the ultimate supplier and ultimate buyer

Gulmira: I buy material from India and want my customer doesn t see manufacturer details. Can we make Switch Certificate of Origin? If yes what are the rules?

Md.Anwarul Islam: Hi!I have a situation where one country(main buyer) wants to buy and deliver to a 2nd country ( final receiving country).From 3rd country(main communicator between main buyer and main manufacturer/supplier) wishes to do the business,who will procure(import) the goods from 4th country(main supplier) and request for shipment(export the goods to the 2nd country as mentioned earlier).Do this type of business can work,how the B/L will be issued.Here 3rd country will act as an importer(import goods from 4th country) but the goods will not enter in his own country and get the B/L from the exporter and make payment to them.Again 3rd country will send a 2(two) sets of B/L, one to the main buyer(1st country) for payments and for final receiving country(2nd country) to take the delivery of the goods.Finally 3(three) sets of B/L will be required here.In this event main buyer will make payments 1st(after getting of B/L) and the main manufacturer/supplier will get payment within 45 days after actual date of shipment.

aresh: i would like to know can a Indian certificate of origin can be issued. for a cargo which i have bought from ABC CHINA and i am selling the cargo XYZ USA. cargo will not touch Indian port & will travel directly from China to USA.

Usha Chandran : I work in a department which deals with Import & Export Clearance. And your information regarding the import & Export on the website had helped me a lot in my Job, Thanks to you. I have a clarification on Importing of Maps. we have one of the Customer who had imported Maps and wants to clear the shipment. he is an individual. Please advice how to proceed with this. Do we need to get a No Objection from any Department. Please guide me.

Amit Sharma: Dear sir, Can we do the triangular shipment via air mode, if yes then pleas suggest HAWB can be switch in air mode,

Harsh Jain : I have a query , the answer of which I was unable to find. online. Q . Around 2% of my shipment has some defects for which the buyer is asking for a credit note or replacement.I'm willing to accommodate this request.Please guide me on the steps to be taken from my end for the same i.e documentation, customs, bank etc.

Rameez Raja: My name is Rameez Raja and I have been in a bit of a fix and was doing some research and happened to read your articles. I understand that you are a very learned man with great knowledge and may be You can give me a piece of advice So my situation is like this. I am based out of India, Delhi and have registered export company also but along with this I have started trading goods from China and shipping to Malaysia, Singapore. So the goods will be manufactured in China and shipped directly to the party. Ofcourse I am the vendor and the POs from the buyer are all issued in my company name. The problem and the big question is goods exported from China need FormE/Certificate of origin. Now can shipper details in Form E different from BL because I plan to make a switch BL.


SD EXPORTS IMPORTS : Dear Team, I got an order at Maldives, but the goods are at China. China party ready to supply to Maldives, But Maldives buyer made purchase order on my Indian company name. Guide me at the earliest sir.

SUSHIL SINGAL: I saw that all the discussions are with regards to sea shipments . In sea shipments , you switch B/L but my situation is with regards to air shipment . I do not want to let my buyer knows who is actual seller and actual seller should not know who is final buyer . How we can do this in case of Air shipment , how we can manage COO and all the other documents . Please advise

Leonardo: is triangle shipment still possible in vietnam ? we are 100% FDI foreign company in vietnam and the bank told us we can't do traignle shipment anymore thank you

noyel john: Hi i like to know more details in triangular trading.I am planning to buy shipment from company A in taiwan and need it to ship it to a Company B in Srilanka. I am form kerala,I need to send the payment from here to taiwan company A and i will receive the payment from Company B in Srilanka. Also i need to register IEC,GST etc.. all registration related to this.Can i get your contact details for getting more information on this.

ahmed: I am an Egyptian entrepreneur living in OMAN. I benefited a lot from reading your articles on your website and I would really like to thank you for your efforts. I recently read your article about triangle trade. Your explanation for switch B/L procedure was very clear. However, I need some clarity on the procedures used in triangle trade for other documents like certificate of origin & health certificate. How can we hide the identity of the real shipper & the real buyer to avoid knowing each other in those documents?

pratik: Recently we have received an order to sell some solar lights in Middle East. We already have a tie up with a manufacturer in China and want to directly ship the solar lights manufactured in China to Middle East. Can you please guide us as to how we can complete the above transaction. Wanted to know following things about above transaction: 1. Can we look at Switch Bale / Bill to mask my original manufacturer in China with our Final Customer in Middle East. 2. Also since the goods will be manufactured in China and Sold in Middle East - Do we still need to pay GST + Custom Duty on this product or we can simply pay tax on Sale Price - Buy Price of the Product. Can you please advise on how we can carry out the above transaction.

ravinder: We are a trading company based out of Hyderabad. we import industrila goods and sell in India to industrial plants. Some times we also import from Europe and export to other country like Saudiarabia. According to original plant we have to lift one consignment from Germany to India and then to Saudi, but due to urgency from customer, we have to choose any other quick way to save time. Is it possible to lift the materials from Germany and send to Saudi directly with our Invoice and other documents. pls clarify sir.

tharun: It was a pleasure reading through your online articles about handling documentations for a triangular export. We have entered in to a triangular export as the middle man and are uncertain about how to handle the requirement of COO and chambered invoice. - We (TASHE) get order from ABC in Saudi Arabia, and have passed the order to XYZ in China. - XYZ will manufacture the goods and will ship them directly to ABC in Saudi Arabia - XYZ will make a documents like CI, PL, BL, COO keeping them as exporter and Tashe as consignee and will send to us. - Once we receive the same, we will make new CI, PL and switch BL keeping Tashe as exporter and our customer ABC as consignee. - However we are not sure about the procedure for COO and chambered invoice. Can we get the COO also switched in India and get our invoice chambered in order to protect the terms and conditions between us and our supplier ABC in China. We want to clearly mention in our invoice that the goods are manufactured in China and COO to be made accordingly.

shadab: Eg: I am in India Mr. Z & I got export order of machine from Mr. X in England. I have a distributor Mr. Y in England, he will purchase the machine from America and supply it to Mr. X in England. Can this transaction be done by Mr. Z from india?

neelesh: As I am beginner I am seeking your esteemed advice for import export. Sir, I would like to buy products from China and export it to USA directly from China. I have proprietorship firm in Ahmedabad with GST no. What procedure to follow to make above mentioned trade and what documents/ permissions required from government of India.

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