Believe it or not, but a few of my readers actually complain that sometimes my posts are "too technical." I guess, they forget that, even though I manage to squeeze a ton of cultural references here, this is primarily a business blog and some of the topics will be amusing and/or relevant only to financial professionals, executive managers, and business owners.
Well, even though this may further aggravate the merriment seekers, I cannot pass on the opportunity to share the following 100% true episode that has occurred in one import/export company early last week. It's just so hilarious (at least to me)!
Here is the premise. English has become a common language of international business many years ago. Of course, there are other linguistic possibilities: if transacting parties are both Latin American, they will use Spanish; employees of a company in Shanghai will speak Mandarin to their counterparts in Guangdong region. But I guarantee that communications between, let's say, a Turkish manufacturer and a Dutch banker, or a Latvian banker and a Swiss financial broker, will be conducted in English.
Of course, a Korean supplier has no choice but to employ English to communicate her concerns about a Letter of Credit (LC) provided as a form of payment by an American importer. The document itself is prepared in English for crying out loud. Still, it's a foreign language – some linguistic pitfalls are unavoidable.
Those who work in international trade or read my book CFO Techniques know that LCs are very strict documents treated in a very literal manner by the banks responsible for making sure that a supplier gets paid only if and when it complies with conditions stipulated in the buyer's LC. For example, the shipping documents (most frequently these are Bills of Lading (BLs)) must be prepared in accordance with the importer's requirements.
Now, enter a young and anxious clerk at the Seoul office of the said Korean supplier. She is responsible for putting together all documents to be presented at the bank so that her employer can get paid $2,745,000 for 1500 mt of the product that just sailed away. She knows very well that the papers must be in full compliance with the LC. She is a novice and feels a lot of pressure to do it right. On top of that, it's all in English, and, even though she is pretty good with it, the stress makes her paranoid. Basically, she is a nervous wreck.
One thing in particular bothers her the most. So, she writes the following email to the customer's CFO:
"LC request is 'FREIGHT PAYABLE WITHING 7 DAYS OF SHIPMENT DATE' but the shipping line put on Bill of Lading 'FREIGHT PAYABLE WITHIN 7 DAYS OF SHIPPING DATE'. Please urgently ask the shipping agent to revise the BL."[sic]
The American CFO, who has dealt with the international trade issues for many years, had a good laugh reading it, thought that the girl needs some Xanax, and replied:
"Relax. The difference between the words 'SHIPMENT DATE' and 'SHIPPING DATE' will not be construed as discrepancy by ANY bank as these phrases mean EXACTLY THE SAME."
Hey, it's all good. At least she didn't have to gesture and guess.