Do not go to the kitchen without a cook book.

Do not read a cook book without going to the kitchen

Purely reading books is not enough. Bankers must go into the kitchen to find out the changing trade practices and try to interpret the theories in the books from the market practices. Otherwise the knowledge from the books is not reflecting what the market is practicing. Scholars often live in an ivory tower and write what they think are the best practices. Carriers have to consider costs, profits, stock market performances and market competitions and hence sometimes cannot follow the best practices. So what is the happy medium? One must find it in the marketplace, not in the books. That is why I tell participants to my workshops on transport, cargo insurance and trade conventions that they need to come back after 3 years. That is also the reasons for IFSA USA and IFS UK to require those passing the CDCS exam to be re-examined after 3 years to make sure that they continue to update themselves and go to the marketplace or seminars to find out the changing market practices.


Some bankers who do not wish to armour themselves with theses L/C related knowledge by claiming that they are only bankers and need not know these subjects according to UCP. They simply determine everything from the banker's perspectives. This is mission impossible. How could a banker determine whether the data content in a bill of lading or cargo insurance document is a discrepancy or not without knowing the trade practices and basic knowledge about the maritime transport and the cargo insurance, not to mention the more sophisticated charter party? This is similar to letting a kid to play with a pistol. A Chinese words of wisdom says very well: "Don't let a kid play with a knife". I am now dealing with a L/C dispute where the packing list pinpoints the name of loading berth on top of naming the port of loading in a petrochemicals transaction. This is a more specific and value added statement and is in line with (a) the L/C terms that states "safe berth/port of Dongguan, China" and (b) the provisions in the charter party. Yet the banker determines that this as a discrepancy. An angel is labelled as a devil!