Contracts and payment for container orders: T/T, LC and the terms that matter
By Mohamad Sinno, Charcoal Expert · Last updated
Ask AI for an importer brief:
A first container is usually paid before it is received and often before it is made, which is the whole problem in one sentence. This page separates two things most pages on the subject blend: what the trade conventionally does, which is other people's practice and is cited as such, and what we ourselves do, which is a fact about this company. We recommend no payment instrument. A supplier arguing for a payment method is arguing for the method that suits the supplier.
This is industry practice, not legal or financial advice. The most useful source in the search results for this subject ends on the same disclaimer, and it is worth borrowing rather than out-claiming.
How charcoal deals are actually paid
The convention across the trade-finance and sourcing guides that rank for this question is a staged telegraphic transfer: 30 % before production and 70 % before shipment, described as the most common structure for container imports, with no formal buyer protection of its own — the protection comes from a pre-shipment inspection and from paying a company account rather than an individual (plainfreight.com, freight forwarder, 1 July 2026). Open-account terms, where the buyer pays after delivery, the same source calls rare for new buyers.
Ours is not that structure, and the difference is worth being explicit about. We work on a 50% T/T deposit against the proforma invoice, then the balance against the B/L copy. That is a heavier deposit than the convention and an earlier balance trigger: the bill of lading copy exists only once the goods are on a vessel, so the second payment is due against evidence that the container shipped rather than against a promise that it will. A buyer who prefers the 30/70 shape should say so at quotation stage; what matters more than the split is what each trigger is evidence of.
The one rule underneath all of this is not about instruments at all. Payments only to the company account, whose name is the legal entity name — ours is PT Coco Reina Global Charcoal, and it matches our registered name character for character on the contact page where the full details are published. Every source in this subject names a mismatch between the seller, the invoice issuer and the account holder as the single most reliable fraud signal there is, and it is the one check that costs a buyer nothing.
The payment-method matrix
Read the cost column as other people's arithmetic. Every figure in it is published by a named source in a named industry on a named date, and the sources do not agree with each other — which is the useful part, and the reason this table gives bands rather than lines.
| Method | What it costs, per the sources | What it actually protects | Where the sources put it |
|---|---|---|---|
| Staged T/T | Wire fees of about 20–50 USD each, per the sourcing agent below; a currency margin of roughly 1–3 % is named by a second source as the cost buyers miss. | Nothing by itself. What protects a buyer is where the stages sit: money that has not moved yet is the only leverage a contract really has. | The structure all three sources describe as the norm for first orders below the LC band. |
| Letter of credit | Bank charges of roughly 0.5–1.5 % of invoice value, or a flat 500–1,500 USD each side, depending on which source you read. | A bank checks documents against terms before releasing funds — and pays on conforming documents, not on conforming goods. A discrepancy is any mismatch between the two. | One source calls an LC disproportionate below about 25,000 USD; the same source and two others put the point where LCs become standard at 50,000 USD and up. |
| Open account | No instrument cost. The exposure is the whole invoice. | The buyer entirely, and the supplier not at all — which is why it is offered to established accounts and not to first orders. | Described by the forwarder source as rare for new buyers. |
The figures above come from three independent companies — a trade-finance publisher, a freight forwarder and a sourcing agent — each carrying its own registered identity and none reproducing another's text (importivity.com, 4 June 2026, modified 2 September 2026; plainfreight.com, 1 July 2026; unionsourcechina.com, modified stamp 24 June 2026). Two further sources add a currency margin of roughly 1–3 % as the wire cost buyers overlook (ihomechinabuy.com, sourcing agent, 3 July 2026) and a worked comparison at a 20,000 USD ticket (sdfltd.com, supplier, undated).
Where a first charcoal container actually falls. On our September 2026 tiers and the measured payloads of a 20 ft container, a full first order is roughly USD 30,500–38,000 on a FOB Tanjung Priok basis — derived from the published grid rather than quoted, and it moves with it. That lands above the point one source calls disproportionate for an LC and below the point all three call the LC's natural home. The honest reading is that the conventions do not settle this size of order, which is exactly why the T/T versus letter of credit question at a first container's ticket is worth its own page.
Contract terms that earn their ink
A contract is not made safer by length. Five terms change what actually happens when something goes wrong, and each of them works because it points at something measurable.
| Term | What it has to name | Why it earns its ink |
|---|---|---|
| A specification exhibit | Shape, size, the packing count for that size, and a dimensional tolerance — ours is ±0.3 mm per side per side — plus the certificate parameters with the method printed beside each value. | Without it a rejection argument is about adjectives, and the party with the goods wins an argument about adjectives. |
| A binding reference sample | The approved sample named by batch and date, sealed on both sides. On the buyer’s request, the factory signs a retained-sample agreement making the approved sample the production reference for the order. | It converts "matches the sample" from a memory into an object two parties can measure. |
| A named test with a criterion | For us the drop test is the one written down: the piece is heated until glowing red, held five minutes after heating, then dropped five times from 1.2 m onto a hard tiled surface. It must not break. | A test with a stated pass criterion settles a dispute. A test without one produces two results and no answer. |
| Inspection before the balance | The batch COA, and a vanning survey if you want one — supplied on request. The Code does not require a survey; carriers commonly ask for one anyway. | An inspection scheduled after the final payment has no leverage attached to it and is a formality. |
| A window and a remedy | Within 7 days of receipt; after that the goods are deemed accepted. Replacement or credit on the next order; Compensation beyond that is settled by agreement in a later shipment, not in cash. | A clause naming no window inherits whatever the governing law supplies, which is rarely what either side pictured. |
The clause that carries the second row, taken apart line by line with what each line is doing, is on the golden sample clause. The terms are not recorded on our side: the buyer proposes the form — there is no house template waiting for you, which is deliberate.
What is on our side of the paper
These are facts about how this company trades, not advice about how yours should:
- Two triggers, not one. 50% T/T deposit against the proforma invoice, then the balance against the B/L copy. No single moment carries the whole exposure.
- A sample and its certificate before an order exists. Free, 1–10 kg, dispatched within 2 working days, paid by the recipient. A batch COA accompanies every sample. How to score one: the scorecard method.
- A COA is issued for every production batch. Each COA states its own validity — 90 days from issue on current certificates. The certificates and their methods are on the certificate of analysis page.
- An order floor, stated. 1 × FCL (20 ft or 40 ft) — and minimum 2 tonnes per shape, size and packaging variant inside it. There is no half-container route to a smaller first commitment, and saying otherwise would be selling something we cannot ship.
- A window and a remedy in writing. Within 7 days of receipt; after that the goods are deemed accepted. Replacement or credit on the next order. Raise it through WhatsApp or the export desk email.
- A price with a basis and a date. FOB Tanjung Priok, USD per tonne, September 2026, reviewed monthly — on the pricing page. A quotation with no basis and no date is not a price, it is a number.
Before the wire leaves
The proforma invoice is the document where almost every avoidable loss becomes visible, and it is visible field by field rather than as a general impression. The nine signals worth knowing, each mapped to the field it lives in, are on reading a proforma invoice: nine red flags before you wire, which also shows our own PI field by field so you have something to compare against.
If a supplier fails those checks rather than merely looking untidy, the patterns and their earliest tells are on charcoal supplier scams, and the registry lookups anyone can run are on how to verify an Indonesian charcoal factory.
Payment Q&A
Is a 50 % deposit normal, or is the market at 30 %?
The convention the trade-finance and forwarder guides describe is 30 % before production and 70 % before shipment. Ours is heavier at the front and earlier at the back: half against the proforma invoice, the balance against the bill of lading copy. What matters more than the split is what each trigger is evidence of — a B/L copy exists only once the goods are on a vessel, so the second payment is due against proof the container shipped rather than against a promise that it will.
Do you accept a letter of credit?
It is a question for the proforma stage rather than a policy on a web page, and the honest framing is that the instrument matters less than where the payment stages sit. What the published conventions agree on is a direction rather than a number: one source calls an LC disproportionate below about 25,000 USD, and it and two others put the point where LCs become standard at 50,000 USD and above. A first container falls between those two figures, so the conventions do not settle it.
What stops the money going to the wrong account?
One rule, and it costs nothing to apply: payments only to the company account, whose name is the legal entity name. Ours is published on the contact page with the bank, the SWIFT code and the account number, and the account name matches our registered name character for character. Any email announcing new bank details mid-transaction is fraud — verify by video call with the export desk before paying, never by replying to the email.
What happens if the container is wrong when it arrives?
Quality and quantity claims are raised within 7 days of receipt; after that the goods are deemed accepted. The remedy is replacement or credit on the next order, and compensation beyond that is settled by agreement in a later shipment rather than in cash. Document against the printed batch code on the cartons rather than against a general impression, because that code identifies the batch whose file holds the laboratory certificate and the factory results.
Seeing the paperwork first
Our proforma invoice and sales contract are ordinary documents and we will send them before anything is agreed: email export@coconutcharcoal.org, or WhatsApp +62 821 3924 038 with the shape, size, packaging and destination. Nothing on this page is a quotation — a binding figure comes on a PI, against EXW Factory, FOB Tanjung Priok and CFR. Contract and staged payment are the last two of the five moves in the shisha charcoal buyer's guide, and the three before them are the ones that can rule a supplier out before anything is signed.