Once shipment of the goods is finished,（) should present all the documents to the negotiating bank

Complaints caused by not delivering according to the time and quantity

In the fall of 2006 ,one of our trading companies concluded a substantial rice business with an old customer in Africa. The terms of delivery are : shipment is to be made in equal monthly lots beginning from December,2006 to June,2007 and payment is to be made by irrevocable letter of credit 60 days after the date of the bill of lading. The customer established the L/C in time and all particulars of the rice, such as the name , specifications , unit price,total price and total quantity are in conformity with the contract. But the terms of shipment only stated " the latest date of shipment is June 30 ,to be shipped in several lots".

The staff in our trading company made the first shipment in December according to the quantity stated in the contract. However in order to export more and eam more foreign exchange earlier, they advanced the time of shipment regardless the shipment terms stipulated in the contract. In January 2007 , our company shipped the quantity of the first quarter once , and in February made the third shipment for the rest quantity that should be delivered in the second quarter, since our staff had not found any specifications "shipment is to be made in equal lots" in the L/C. At the same time our bank negotiated against presentation of the stipulated documents and subsequently asked the opening bank to pay for the goods. The opening bank examined the L/C and confirmed that the L/C had no error in it.

After receiving the shipping advice, the African customer found that the delivered quantity of the rice both in the second lot and third lot were not in accordance with the shipment terms stipulated in the contract, so a claim was filed by the customer against our trading company for default shipment. The amount claimed involved the added fees of chartering warehouse for the delivered goods, the interest and other charges etc. The two parties negotiated the compensation for several times, finally our company accepted the opposing party's opinion and agreed that the purchase price for the last two lots was to be paid four months later, that meant our company would receive the payment a few months later than che original stated time. According to Lhe current price in the international market at that time, our trading company suffered the loss equivalent to 10 percent of the original selling price.

Questions :

(1) What is the relationship between the letter of credit and the transaction contract？

(2) Which proof must the two parties concerned base on when they perform their obligations？

(Translate the case into Chinese and then answer the question)

Helpful hint: It is stipulated in Article 4 of the Uniform Customs and Practice for Documentary Credits that "in credit operations all parties concerned deal in documents and not in goods , service and/or other performance to which the documents may relate" .

The management of logistical (物流的) operation is about movement and storage of materials and finished products. Logistical operations start with the initial shipment of a material or component part from a supplier and are finished when a manufactured or processed product is delivered to a customer.

From the initial purchase of a material or component, the logistical process adds value by moving inventory (移动库存) when and where needed. If all goes well, a material gains value at each step of its transformation into finished inventory. In other words, an individual part has greater value after it is put into a machine. Likewise, the machine has greater value once it is delivered to a buyer.

To support manufacturing, work-in-process inventory must be moved to support final assembly. The cost of each component and its movement becomes part of the value-added process. The final or meaningful value that is added occurs only with final ownership transfer of products to customers when and where specified.

For a large manufacturer, logistical operations may consist of thousands of movements, which finally develop into the delivery of products to an industrial user, retailer, wholesaler, dealer, or other customer. For a large retailer, logistical operations may start with gaining products for resale and may finish with consumer pickup or delivery. For a hospital, logistics starts with purchasing and ends with full support of patient surgery and recovery. The significant point is that regardless of the size and type of enterprise, logistics is essential and requires continuous management attention. For better understanding it is useful to divide logistical operations into three areas: physical distribution, manufacturing support, and procurement(筹措、采购) .

Logistical operations are concerned with______.

A．transfer of materials and finished products

B．manufacturing of materials and finished products

C．inventory of materials and finished products

D．both A and C

A．partial shipment

B．transshipment

C．through shipment

D．total shipment

A.transshipment

B.partial shipment

C.ocean shipment

D.advance shipment