Letters of Credit: How to Set Delivery Milestones in Steel Contracts

Under LC terms, a bill of lading that misses the presentation window can trap your payment. Write milestones like this.

When steel exports are paid by letter of credit, the disputes are rarely about quality — they're about documents: delivery dates, bill of lading dates and LC expiry that don't line up.

Our experience: split payment and documents by production milestones — 30% deposit; 60% before shipment against a third-party inspection report and packing list; 10% balance against a copy B/L. Both sides keep risk under control.

Three practical points: leave a 2–3 week buffer between the LC shipment date and the production schedule; a B/L dated even one day outside the LC window is a discrepancy, so confirm vessel schedules early; and require controllable documents (like third-party inspection reports) in the LC rather than papers from parties you can't control.

A well-drafted contract protects your margin better than haggling over a point or two.