Bulk cargo is paid for twice. A provisional invoice goes out on the Bill of Lading quantity as soon as the cargo is loaded, usually against a letter of credit; a final invoice trues it up once the discharge survey and the assay are agreed. Because the invoices are in dollars and we pay in rupees, the exchange rate on the day of remittance differs from the rate on the Bill of Lading date, and that difference is a real cost.

Provisional against final

The first payment, the true-up, and the quality adjustment applied inside the final invoice.

Exchange difference

What the remittances cost in rupees against what they would have cost at the Bill of Lading rate.

Letter of credit

The bank's undertaking to pay the seller once the shipping documents are presented and found in order.

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