Frequently Asked Questions

What are the modes of transport in international trade:

The common modes of transportation in the international large-scale machinery trade include sea, land, and air. The specific mode of transportation chosen can be evaluated and compared according to factors such as the size, weight, value, delivery time, origin and destination of the machinery. Sea freight is the main mode of transportation for large machinery, and it is usually the cheapest mode of transportation, but it takes a long time. Land transportation can quickly transport goods to their destination, but long-distance transportation is costly. Air shipping is the fastest mode of transportation, but it is usually the most expensive. The final choice of shipping method depends on the specific needs and circumstances of the buyer and seller.

Logistics capabilities that an international trading company should have:

1. **Reasonable logistics plan**: Evaluate and compare according to the size, weight, value, delivery time, origin, destination and other factors of the goods, and choose the appropriate mode of transportation, such as sea transportation, land transportation, etc., air transportation.
2. Efficient logistics management: including logistics informatization, logistics organization, logistics standardization, logistics specialization, etc., to improve logistics efficiency and reduce logistics costs.
3. **Complete logistics services**: including cargo handling, packaging, insurance, customs declaration, warehousing, distribution and other links to ensure that the goods arrive at the destination safely, quickly and accurately.
4. **Good logistics environment**: including logistics infrastructure, logistics regulations, logistics market, etc., to provide a good logistics environment.
The above are the logistics conditions that foreign trade enterprises must have to ensure efficient, safe and reliable logistics.

What are the payment methods in international trade:

1. **Cash Advance**: This payment method is the safest for the exporter because the payment is received before the transfer of ownership of the goods. However, this is the least attractive option for buyers as it generates unfavorable cash flow.
2. **Letter of Credit**: This payment method is that the buyer’s bank guarantees the seller to pay after presenting the specified documents.
3. Documentary Collection: This payment method involves the use of a bank to facilitate the exchange of shipping and payment documents between the buyer and the seller.
4. Account Opening Terms: This payment method is the most risky for the exporter because the payment is made after the buyer ships the goods and receives the goods.
5. Consignment & Trade Finance: This payment method involves the use of a third-party financial institution to provide payment to the exporter while the goods are in transit².
The choice of payment method depends on the specific needs and circumstances of the buyer and seller. Before making a decision, it’s important to consider the risks and benefits of each payment method.

Things to note in international trade:

1. **Sign the contract**: Before the transaction, the two parties should sign a contract to clarify the details of the transaction, price, delivery time, payment method and other details to avoid disputes².
2. **Verify the other party’s information**: Before making a transaction, you should verify the other party’s identity, credit history, business status and other information, and avoid trading with illegal merchants³.
3. **Choose the right payment method**: Choose a safe and reliable payment method, such as letter of credit, collection, letter of guarantee, etc., to ensure the safety of funds⁴.
4. **Insurance**: You can purchase cargo transportation insurance, credit insurance, etc. before the transaction to reduce the transaction risk⁵.
5. **Timely communication**: In the process of trading, timely communication to solve problems to avoid disputes caused by misunderstandings.