If a forwarder is unaware that the shipper intends to collect funds via a documentary draft collection or letter of credit, what may happen?

The situation is critical because if a forwarder is unaware that the shipper is relying on a documentary draft collection or letter of credit for payment, the entire process may be compromised. Under these payment methods, the transfer of goods is contingent upon specific financial conditions being met, such as the buyer's approval of shipping documents. If the forwarder does not know this, they may proceed with the shipment without the proper documentation or payment assurance, resulting in the potential for the shipper to not get paid.

The forwarder plays a significant role in the transportation and logistics process, and their lack of awareness can lead to logistical decisions that do not align with the shipper's payment intentions. It is essential for the forwarder to be informed of these payment terms to safeguard the shipper's interests. Thus, the outcome may result in non-payment for the goods shipped, as the payment mechanism was not properly activated due to the lack of alignment between the forwarder’s actions and the shipper’s intentions.