If a letter of credit indicates that costs additional to freight are not acceptable, a transport document is not to indicate that costs additional to the freight have been or will be incurred.<\/p>\n
If you are working with CIF, CFR, CIP, CPT trade terms under letters of credit you are likely to see a statement under field \u201c47A: Additional Conditions\u201d such as \u201cCosts additional to freight is prohibited.\u201d<\/p>\n
The logic behind these kinds of statements is to fix the freight cost by the issuing banks to the value that was indicated in the credit.<\/p>\n
Normally letter of credit rules allow additional costs which may be shown on the transport documents such as multimodal transport documents or bills of lading.<\/p>\n
However issuing banks frequently disallow charges additional to freight by inserting a statement in the credits on this effect, when the trade term is CFR, CIF, CIP or CPT.<\/p>\n
Remember on FOB, FCA and EXW terms freight is payable at destination, so you should not be having any problem arising from prohibition of costs additional to freight.<\/p>\n
You need to look at the letter of credit text on DAT, DAP and DDP trade terms to determine whether costs additional to freight is prohibited or not.<\/p>\n
Examples:<\/strong> According to the International Standard Banking Practice<\/a> an indication of costs additional to freight can be shown on the transport documents by two ways:<\/p>\n According to the International Standard Banking Practice if a credit indicates that costs additional to freight are not acceptable, a transport document is not to indicate that costs additional to the freight have been or will be incurred.<\/p>\n Related Articles:<\/strong><\/span><\/p>\n If a letter of credit indicates that costs additional to freight are not acceptable, a transport document is not to indicate that costs additional to the freight have been or will be incurred. If you are working with CIF, CFR,<\/p>\n","protected":false},"author":1,"featured_media":5081,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86,209,22,83],"tags":[121,122],"class_list":["post-5073","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bill-of-lading-discrepancies","category-how-to-work-with-a-letter-of-credit","category-basics","category-letter-of-credit-discrepancies","tag-costs-additional-to-freight","tag-costs-additional-to-freight-discrepancy"],"_links":{"self":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts\/5073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/comments?post=5073"}],"version-history":[{"count":0,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts\/5073\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/media\/5081"}],"wp:attachment":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/media?parent=5073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/categories?post=5073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/tags?post=5073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n47A: Additional Conditions:<\/span><\/p>\n\n
Which Costs Can be Regarded as Costs Additional to Freight?<\/strong><\/h4>\n
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What Happens If a Letter of Credit Prohibits Costs Additional to Freight?<\/strong><\/h4>\n
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