Manufacturer wins lucrative Nigerian contract
12th June 2017
Market challenges of ‘one-off project cargo’ to Nigeria for ‘first time’ exporter.
Nigeria offers UK businesses many export opportunities across multiple sectors
Nigeria also poses some daunting challenges from non-transparent economic decision making, especially in government procurement to clearance of goods at ports. Reports indicate that corruption and congestion remain major issues at ports which can be slow, cumbersome, and highly bureaucratic.
If you had a demanding customer in Nigeria, what would you do to ensure you get paid'
The customer in Nigeria was very specific in their demands for shipment dates. Given the notorious challenges when dealing with Nigeria port authorities, this was an obvious concern for the client. Payment wouldn’t be effected until the goods were delivered, so understanding how this process could be facilitated was the key to completing the order.
A ‘Letter of Credit’ serves as a guarantee for payments made to a specified person under specified conditions.
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade.
Spatial Global provided the exporter with a total overview of the LoC process
This included advice on bank expiry and presentation dates to tie in with actual vessel departure dates. This was due to the very specific window being requested by the consignee which conflicted with the content of the LoC. Spatial Global’s primary intention was to protect the shippers exposure to potential late presentation and none payment due to the consignees requests.
The customer was educated through the process and has gained confidence for future business
Spatial Global provided peace of mind and assurance that our export shipment and subsequent payment was being handled correctly, safely and professionally. Plus the container arrived on time and complied with country and shipper requirements. They ensured we didn’t experience delayed payment from our lack of understanding of the ‘Letter of Credit’ mechanism and the demands made by the client which were outside of these terms. Spatial Global saved us a lot of time and pain in dealing with something that we had no experience in. The bank presentation was clean and we were paid promptly in line with the ‘Letter of Credit’ aiding cash flow and showing ourselves to be competent at international trade.