T/T vs letter of credit for a first charcoal container
By Mohamad Sinno, Charcoal Expert · Last updated
The short answer
A staged telegraphic transfer is reasonable for a first container on conditions, and it is not reasonable without them. The conditions are three, and they have to hold together: the account you are paying is a company account whose name is the seller's registered name and you checked that yourself in a public register; the balance falls due against a document that only exists after shipment rather than against a calendar date; and something checkable happens before that balance moves. A T/T carries no formal buyer protection of its own — the forwarder guides say so plainly — so all of the protection is in where the stages sit.
This is industry practice, not legal or financial advice, and we recommend no instrument. A supplier arguing for a payment method is arguing for the method that suits the supplier.
What a first container is actually worth
The instrument question turns almost entirely on ticket size, so the ticket is worth deriving rather than assuming. Our published tiers run 18.5–20 t in a 20 ft container at 1,650–1,900 USD per tonne, so a full first order on a FOB Tanjung Priok basis comes to roughly USD 30,500–38,000. That figure is computed from the published grid and the measured payload of a 20 ft container, it carries the grid's own stamp — September 2026, reviewed monthly — and it is illustrative rather than a quotation. There is no smaller first commitment to compare it against: 1 × FCL (20 ft or 40 ft), with minimum 2 tonnes per shape, size and packaging variant.
Where the published thresholds sit — and where they stop
Three independent companies publish a threshold for when a letter of credit is worth its cost. They agree on the direction and differ on the number, and the difference is the finding rather than a nuisance to be averaged away.
| Source | What it is, and when | What it publishes |
|---|---|---|
| importivity.com | trade-finance publisher published 4 June 2026, modified 2 September 2026 |
Below about 25,000 USD the flat fees make an LC disproportionate, and a 30/70 wire split against an inspection report usually wins. The same page puts the point where an LC starts to make clear economic sense at 50,000–75,000 USD and above. |
| plainfreight.com | freight forwarder published 1 July 2026 |
LCs are standard for large orders, typically 50,000 USD and above, with 500 to 1,500 USD or more in fees on each side. T/T 30/70 is the most common structure and offers no formal buyer protection on its own. |
| unionsourcechina.com | sourcing agent modified stamp 24 June 2026 |
LC charges of 0.5–1.5 % of invoice value against T/T wire fees of 20–50 USD; use an LC for new manufacturers or orders above 50,000 USD. A wire clears in 2–5 business days. |
So the band runs from about 25,000 USD, below which one source calls an LC disproportionate, to 50,000 USD, where all three say LCs become standard. A first charcoal container lands between them. That is the honest answer to the question this page asks: the conventions do not settle an order of this size, and anyone telling you they do is rounding somebody else's number.
Two things are worth knowing about those figures before leaning on them. They are published by companies in general goods sourcing — apparel, packaging, consumer products — not in charcoal, and none of them is pricing a dangerous good with a weathering hold and a carrier acceptance gate. And an LC pays against conforming documents, not conforming goods: a discrepancy is any mismatch between the documents and the credit's terms, which means the instrument protects a buyer from non-shipment far better than it protects them from the wrong material arriving.
Structuring stages against production milestones
Whatever the instrument, the useful question is what each payment is evidence of. Stages tied to calendar dates pay out whether or not the thing they were meant to pay for happened; stages tied to events leave a document behind.
Ours has two triggers. 50% T/T deposit against the proforma invoice — which is what puts a production slot and a weathering hold in motion — and then the balance against the B/L copy. A bill of lading copy exists only once the goods are on a vessel, so the second payment is due against evidence the container shipped rather than against a promise that it will.
Between those two triggers sit the things worth inspecting. A COA is issued for every production batch, and it is the certificate whose batch number is printed on your cartons. A vanning survey — an independent check of how the container was stuffed, with photographs as its output — is supplied on request; the Code does not require one and carriers commonly ask for one anyway. Neither of those is an instrument, and both do more than an instrument does about the risk that actually materialises, which is not usually theft.
And the rule that survives every structure: payments only to the company account, whose name is the legal entity name. Ours is PT Coco Reina Global Charcoal, published in full with the bank and SWIFT on the contact page. Bank details never change mid-transaction; an email announcing that they have is fraud, and the check that catches it is a video call rather than a reply.
If it goes wrong anyway
An instrument decides who holds the money while a dispute runs; it does not decide the dispute. That is what the contract terms do — a specification exhibit, a binding reference sample, a named test with a criterion, and a window. Ours is stated: within 7 days of receipt; after that the goods are deemed accepted, with replacement or credit on the next order as the remedy. The terms worth writing down are on contracts and payment for container orders, and the document where most avoidable losses first become visible is taken apart on reading a proforma invoice.
Questions
Is a staged telegraphic transfer safe for a first order?
Not by itself — a T/T carries no formal buyer protection, which the forwarder guides state plainly. It becomes reasonable when three conditions hold together: the beneficiary name equals the registered company name you verified in a public register, the balance is due against a document that only exists after shipment rather than against a date, and something checkable happens before that balance moves. Any one of those alone is not enough, and a supplier who resists all three has told you something.
Why would an LC not be the obvious answer?
Because a letter of credit pays on conforming documents rather than on conforming goods, and because its cost does not scale down. The published figures run to roughly 0.5–1.5 % of invoice value, or a flat 500–1,500 USD on each side, against wire fees of about 20–50 USD — all of them third-party figures from sourcing and forwarding sources dated 2026. On a first container that is real money spent on a document check rather than on an inspection of what is in the box.
What should the payment stages be tied to?
To events that leave evidence, not to calendar dates. On our side the deposit sits against the proforma invoice and the balance against the bill of lading copy, with the batch certificate of analysis and, on request, a vanning survey available before that balance moves. A stage tied to a date pays out whether or not the thing it was meant to pay for happened.
Does the order size change the answer?
It is the main thing that does, and the published thresholds are a band rather than a line: about 25,000 USD as the floor below which one source calls an LC disproportionate, and 50,000 USD and above as where that source and two others say LCs become standard. A first 20 ft container of coconut shell charcoal, derived from our own published tier grid and the measured payload of that container, sits between those two numbers.
Asking for the paperwork
We will send a proforma invoice and the sales contract before anything is agreed, so you can read the terms rather than take a description of them: email export@coconutcharcoal.org, or WhatsApp +62 821 3924 038 with the shape, size, packaging and destination.