Shipping Guarantees [Last Updated by: shahriar on 2012-01-01]
A Shipping Guarantee is an indemnity that the bank executes jointly and severally with its customer in favour of a shipping company, enabling the importer to obtain goods without the actual title documents (e.g. bills of lading). This is used when the goods arrive prior to the actual title documents, and the buyer wish to obtain the goods so as to avoid demurrage charges or losses due to deterioration of goods (esp. Perishables). Settlement occurs upon receipt and processing of the documents. Release of the Guarantee occurs after the surrender of the original bills of lading to the Steamship Company.