StopLoss 1 - C.O.D. & Shipper’s Disbursements
In spite of the growing sophistication of the international banking system, cash on delivery is still a common means of collecting payment for goods. It is most often used for movements by air and for short-haul road services where more traditional means of payment, involving negotiation of documents through the banks, simply take too long.
In asking you to undertake a C.O.D. collection, your customer is implicitly saying that he does not trust his client, but that he is putting his trust in you not to deliver the goods without getting payment in the agreed form. Failing that trust could be very expensive: you could be liable for the full sales price of the goods. While the normal TT Club cover for freight forwarders and non-vessel-operating carriers will indemnify Members for failures to collect C.O.D. payments, you are required to have in place an adequate system of control to try and ensure that such losses do not happen.