Its all about communication II
Imports have been the mainstay of my business, somewhere down the road the Government of Pakistan suddenly restricted all imports on Open Account Basis, it was a challenge, I had an ongoing order for import of Solar Water Heaters from China with payment to be made as soon as the goods were received on open account basis. I went to my bank to discuss and was told to get the documents delivered by the supplier’s bank under “Documentary Bills for Collection” basis. I had never heard the term.
I immediately emailed my supplier that he will now have to send the documents over under documentary bills for collection basis through their bank. As I had expected, he knew nothing about the term either. Told him to call his bank to check. His bank asked for my banks name, and I told him that it was The Bank of Khyber. The reply was exactly what I didn’t want to hear “the payment term was not available”. With about 11 containers on their way from China to Pakistan and arriving within a week I was in a state of despair. One day detention of the eleven 40 foot containers came to be about $ 1400 /day, yeah that’s right, Per day. Quite frankly, I didn’t really know what to do.
I called my forwarder to check if he had any ideas and he respectfully declined to help. Found out a couple of days later that a few companies in the UAE would have documents sent over through their bank for a charge. The problem was that the value of the shipment was quite big and I couldn’t trust a new company with it. What would have happened in this scenario was that the shipper would have sent the shipping docs to the UAE company who would have replaced the shipper’s invoice with theirs and then would send the docs through their bank on collection basis. The payment would then go to the UAE company and who would then pay off my suppliers. Time was running out and I had to make a decision if I could trust the company with that big of an amount. I couldn’t make up my mind and the containers arrived at Karachi Port. I had a very short window left to make a decision otherwise that container detention bill would have eaten up all my profit.
Frustrated & helpless, I decided to ask my supplier to talk to their bank once again as I was told by my bank that this payment term was used pretty frequently all over the world. Upon my request they called their bank once again who asked them to check if they could send the documents to another bank in Pakistan. What looked like a mountain turned out to be just a molehill. Just a small difference in how my supplier wrote his email saying that the payment option was not available had put me in so much trouble. He could have just written that the Bank of Khyber was not available and I could have given them another bank’s name. The reason I gave them the Bank of Khyber’s name was that I was actively doing business with them those days. I had an account with another bank and gave them Bank Alfalah’s name and was immediately told that that was available. The supplier processed the documents which arrived a couple of days later and I finally managed to get the goods cleared from customs and delivered to client but not before paying a hefty amount in container detention.
