Trading Resources
Plain-language guides to the mechanics behind a deal: the shipping terms we use, how payment actually moves, and what to watch for from brokers who aren't us.
Incoterms Explained
Most of our deals go out under one of three shipping terms: FOB, CIF, or CFR. Each one decides who pays for getting the goods from origin to destination, and at what point the risk shifts from seller to buyer. Here's what each actually means, in plain terms.
Free on Board
The seller's responsibility ends once the goods are loaded, or handed over at the agreed point for cargo moving by rail. From there, the buyer owns the shipment and arranges freight, insurance, and customs at destination.
Cost, Insurance and Freight
Risk still transfers at loading, same as FOB. The seller additionally pays the ocean freight and buys a minimum level of cargo insurance to the destination port. The buyer still carries the risk in transit, but doesn't have to arrange the freight or insurance directly.
Cost and Freight
A middle ground. The seller pays the ocean freight to the destination port, same as CIF, but isn't obligated to buy insurance. That's on the buyer to arrange if they want the coverage. Risk transfers at loading, same as the other two.
A note on landlocked origins: some of what we source, including fertilizer out of Kazakhstan, moves by rail rather than by sea. In those cases, "loading" refers to the agreed rail handoff point rather than a port. Whichever term applies to a given deal is confirmed upfront and set out in the offer. If anything about it isn't clear, ask before signing, that's what the term is there to protect.
How a Cash Against Documents (CAD) Deal Works
Cash Against Documents is the minimum standard every deal we facilitate runs on. Many of our suppliers work under a Letter of Credit as well, which adds a bank's payment commitment on top, but CAD is the floor either way: no money moves until the goods have been inspected, loaded, and the shipping documents are in hand. Here's exactly how that plays out.
What CAD Actually Means
Cash Against Documents, also called a documentary collection, runs through two banks: the seller's bank and the buyer's bank. The seller's bank forwards the shipping documents to the buyer's bank, which presents them to the buyer and collects payment on the seller's behalf. What protects both sides is the sequence: the buyer can't get the documents needed to claim the goods without paying for them, and the seller can't get paid until the goods pass inspection, are loaded, and the documents are submitted to the bank. This is the baseline we operate from on every deal, regardless of what other payment structure sits on top of it.
Where Letters of Credit Fit In
Most of our suppliers actually work under a Letter of Credit rather than CAD alone. Under an L/C, the buyer's bank commits in advance to pay once documents that comply with the letter's terms are presented, and checks those documents itself before releasing payment. When an L/C is in place, it's the issuing bank's payment commitment standing behind the deal rather than the buyer's own funds, but the underlying sequence doesn't change: goods are inspected and loaded first, documents are drawn up, and payment, whether it's the buyer's or the bank's, only moves against those documents. Cash Against Documents is the floor we operate from on every deal we facilitate. An L/C sits on top of that floor when a supplier requires one, it doesn't replace it.
Typical Documents Involved
Bill of Lading: Issued by the shipping line once the cargo is loaded, this is the actual title to the goods. Whoever holds it can claim the cargo at destination, which is what makes CAD work at all.
Commercial Invoice: Sets out what's being sold, the price, and the terms of the deal, the number the buyer is actually paying against.
Packing List: An itemized breakdown of what's in the shipment, used to confirm what arrives matches what was ordered.
Certificate of Origin: Confirms where the goods came from, needed for customs clearance and, in some cases, preferential duty treatment.
Inspection Certificate: Issued by an independent inspection company, confirms the goods meet the agreed specification before loading. This is the one document in the set a bank could never provide, since it's the only one that actually speaks to the condition of the goods rather than the paperwork around them.
The Handoff Points, In Order
Goods are inspected and loaded. An independent inspector checks the cargo against spec before it goes on the vessel or rail car. Once the goods pass, the inspection certificate is issued, and the Bill of Lading follows once loading is complete.
Seller sends the documents to their own bank. The full set, invoice, packing list, certificate of origin, inspection certificate, and Bill of Lading, goes to the seller's bank along with instructions to collect payment.
The seller's bank forwards the documents to the buyer's bank. The buyer's bank receives the full set and the instructions, but doesn't check them beyond confirming everything on the list has actually arrived.
Buyer's bank notifies the buyer. The buyer is told the documents have arrived and that payment is now due.
Buyer pays the bank. This is the actual moment "cash against documents" happens. Payment is required before the documents are released, not after.
Documents are released to the buyer. Once payment is confirmed, the buyer receives the full set, including the Bill of Lading.
Funds move to the seller, and the buyer claims the goods. The buyer's bank forwards payment to the seller's bank, which credits the seller, while the buyer or their agent uses the Bill of Lading to collect the cargo at destination.
At no point does the buyer need to pay until the bank confirms it has received the documents, and the buyer doesn't receive the documents until they've paid. That sequencing is the minimum standard behind every deal we facilitate.
Protecting Yourself Against Fake Buyers and Suppliers
Commodity trading attracts a specific kind of scam, and if you've been approached by traders before, you've probably already seen versions of it. None of this requires becoming an expert in trade finance. It just takes knowing the handful of patterns that show up again and again.
Advance Fees
Advance fees are the single biggest tell. A legitimate seller gets paid when the goods are loaded and documented, not before. If anyone asks for a performance bond, a processing fee, an activation fee, or any payment before goods move or before a real, verifiable contract exists, stop there. This is the most common pattern in trade fraud, and dressing it up in more official language doesn't make it any less one.
Unverifiable Companies
A real trading company has a business registration you can look up, a physical address that isn't just a mailbox, and a history you can check with people who aren't the ones introducing you. A slick one-page website and a WhatsApp number isn't proof of anything either way, it just means the verification hasn't happened yet, and it should before anything moves forward.
Daisy Chains
An offer often passes through more hands than it should before it reaches you. A daisy chain is what happens when a string of brokers forward the same offer to each other, each one adding a markup, without any of them actually having a direct line to the seller or the buyer. By the time it reaches you, no one in the chain can answer basic questions about the goods, the logistics, or the paperwork, because none of them are actually close enough to the deal to know. If someone can't tell you where the offer originated, how many people have handled it before you, or put you in direct contact with the party they claim to represent, you're probably looking at a daisy chain rather than a real deal. Everything we offer comes from either a direct supplier relationship or a mandate we hold ourselves, not a forwarded email we can't trace back.
Pressure to Skip Verification Steps
Real deals can move quickly, but they don't require skipping inspection, skipping verification of the other party's bank, or signing something before you've had a chance to read it properly. An offer that expires today or an allocation that will go to someone else is a tactic to get you to act before you've checked anything, not a genuine market constraint.
Fake Bank Instruments
Some of the more elaborate scams involve fabricated letters of credit, forged bank guarantees, or claims that a bank will lease or activate a financial instrument for a fee. Real banks don't issue guarantees for people who aren't their clients, and they don't lease instruments to third parties. If a deal depends on a bank product that sounds unusual, call the bank directly using a number you looked up yourself, not one given to you by the other party, and ask.
Confidentiality That Only Runs One Way
It's normal early in a deal for a broker to protect both sides' identities with a signed non-circumvention and non-disclosure agreement, often shortened to an NCNDA. That's standard practice, and something we do too. What's not normal is being asked to sign away your rights, pay a fee, or commit to exclusivity before you've had a real conversation about what's actually being offered.
How Our Process Protects Against This
Every deal we facilitate runs on a Cash Against Documents basis, so no payment happens before the goods are inspected and loaded. Payments move bank-to-bank between real institutions, never through a personal account or a third-party agent. No advance fees are ever requested, from either side. And if something in a deal looks like one of the patterns above, we'd rather answer the question directly than lose the trust it takes to actually close one.