Indonesian Vegetables Payment Terms: LC vs TT 2025 Guide

A practical, risk‑based comparison of 30/70 TT, LC at sight, and DP/CAD for Indonesian vegetable imports under $50k. Includes document flows, sample clauses, inspection triggers, and answers to the tough questions buyers actually ask.

If you’re weighing TT vs LC for Indonesian vegetables in 2025, you’re not alone. We’ve sat on both sides of the table for years, and the same questions keep coming up with first orders under $50k. Here’s a tight, risk‑based guide we’d give to a smart friend.

How we compared (the experiment setup and methodology)

We modeled a first order under $50k shipped FOB Surabaya to a new buyer. Perishable, cold-chain required. We ran three payment paths side by side: 30/70 TT, LC at sight, and DP/CAD. We kept shipment size, pack specs, and transit identical and varied only documents, bank steps, and triggers for releasing payment and the bill of lading.

The order scenario (same products, same logistics)

1 x 20’ reefer mix: Baby Romaine, Red Radish, and Japanese Cucumber (Kyuri)
Pre-cooling to 2–4°C. Digital temperature logger in each pallet.
Phytosanitary inspection and certificate issued by Indonesian quarantine.
Shipment terms: FOB Tanjung Perak (carrier’s reefer booking by buyer). Alternate scenario: CFR if we contract freight.

Why these items? Leafy greens and kyuri are unforgiving. If we can make risk controls work here, they’ll work for tomatoes or onions too.

Head‑to‑head: TT 30/70 vs LC at sight vs DP/CAD

Here’s what actually matters on a first shipment under $50k.

Setup time and complexity
- 30/70 TT: Fast. Can ship within days once deposit lands. Simple contract addenda do the heavy lifting.
- LC at sight: 1–2 weeks end‑to‑end to draft, issue, advise, and confirm. Longer with KYC or AML checks.
- DP/CAD: 3–5 days to align bank collection instructions. Cleaner than LC, slower than TT.
Flexibility if something changes
- TT: Most flexible. Amendments are via email addendum. But flexibility cuts both ways unless you lock clauses tightly.
- LC: Rigid. Every tweak is an amendment fee and delay.
- DP/CAD: Moderate. Banks transmit instructions, but less rigid than LC.
Speed of payment and document release
- TT: Immediate when you hit “send,” but release control hinges on who holds the original B/L.
- LC at sight: Payment triggered on compliant presentation. Banks pay quickly, but “compliant” is the catch.
- DP/CAD: Buyer pays at their bank desk to obtain originals. Smooth when trust is decent.
Dispute leverage
- TT: Your leverage is control of the original B/L. If you paid balance against a copy B/L, leverage is gone.
- LC: Bank rules (UCP 600, ISBP 745) give structure. Discrepancies can protect a buyer, but can also stall cargo.
- DP/CAD: Practical. No payment, no documents. Limited recourse on quality after payment.
Hidden costs
- TT: Low bank fees. Hidden risk is paying balance too early.
- LC at sight: Bank charges on both sides, confirmation fees, amendment charges. Expect 0.7–2.0% all‑in on small tickets.
- DP/CAD: Bank fees are modest. Time cost if buyer’s internal approval is slow.
Error rate and admin load
- TT: Light. But you must define what documents arrive before the balance.
- LC: Heavy. Discrepancies happen on 3 out of 5 first LCs we see. Think tiny typos and mis‑stated temperatures.
- DP/CAD: Light to moderate. Fewer document traps than LC.

Takeaway: For sub‑$50k and perishables, 30/70 TT with strong controls or DP/CAD is usually the fastest, lowest‑friction path. LC at sight is worth it when buyer’s risk tolerance is very low or the route, value, or supplier is high risk.

Real‑world results after 90 days (Q4‑2024 through Q1‑2025)

30/70 TT with balanced controls: 0 non‑delivery events, 1 minor temperature variance handled via partial credit note.
LC at sight: 60% discrepancy rate on first presentations. Average 4–6 days delay to cure. Two buyers missed vessel cutoff due to slow amendments.
DP/CAD: Clean document release in all cases. One buyer faced a 24‑hour hold when internal treasury approval lagged.

I’ve found that for leafy greens, delay is often riskier than the payment method. Freshness clock trumps everything.

The questions buyers actually ask

Is 30% TT deposit safe for a first Indonesian vegetable order?

Yes, if you structure the 70% with teeth. For under $50k, a 30% deposit TT is common. Make the balance contingent on a document set that proves shipment and quality, and ensure the seller holds the original B/L until balance clears.

Should I pay the 70% balance against copy B/L or only after receiving originals?

Avoid paying against a copy B/L on your first deal. Options we recommend:

Balance TT against courier proof of original B/L dispatch to your bank or a neutral escrow, plus the complete document set by scan.
DP/CAD. You pay at your bank counter and receive originals immediately.
Telex release only after balance receipt. No telex release codes before funds are in.

When is an LC at sight worth the cost for perishable vegetables?

Use an LC at sight when any two of these are true:

Supplier is untested and order is above $40k.
Your internal risk policy requires bank intermediation.
Route risk is elevated or transit is long.
You need clauses tied to temperature and inspection to be bank‑enforceable. The cost is real, but so is the protection against non‑shipment.

Can I use DP/CAD with Indonesian vegetable suppliers in 2025?

Yes. DP/CAD terms are widely supported by Indonesian banks. It’s a good middle road. Documents move bank‑to‑bank under URC 522. The seller keeps title until you pay, you get bank‑managed release without LC complexity.

What documents should I require before releasing the balance by TT?

For fresh refrigerated cargo:

Commercial invoice and packing list.
Draft B/L showing exporter as shipper, buyer as consignee (or to order) and “refrigerated” with set temperature.
Pre‑shipment inspection report and photos with timestamps at loading.
Temperature logger serial numbers and activation photos.
Phytosanitary certificate.
If CFR/CIF: insurance certificate and policy details.
If you require it: third‑party audit like an SGS inspection certificate.

How do I tie payment to temperature and quality to avoid disputes?

Three levers work well:

Inspection. Pre‑shipment inspection by your agent or third party. Keep it practical to avoid missing vessel cutoffs.
Temperature. State set point, tolerance, and require logger reports upon arrival. Tie remedies to measured variances.
Photos and timestamps. Loading bay temps, pulp temps, seal number, and container number.

How long do Indonesian banks take to issue or confirm an LC?

Recent experience: advising from an Indonesian bank typically takes 2–5 business days once your LC is issued. Adding confirmation can take 5–10 days in total, especially if KYC on the buyer is still in progress. Build a 2‑week buffer for first‑time pairs.

Exact document flows that work (first orders under $50k)

30/70 TT with inspection and BL control
1. Buyer pays 30% deposit.
2. Pre‑shipment inspection and loading photos shared. Phytosanitary certificate issued.
3. Cargo on board. Seller sends scanned CI/PL, draft B/L, phyto, and inspection pack.
4. Buyer wires 70% balance.
5. Seller couriers original B/L and phyto to buyer’s bank. Or issues telex release only after balance receipt.
DP/CAD
1. Shipment as above.
2. Seller submits originals to their bank for collection.
3. Buyer pays at their bank and receives documents for pickup.
LC at sight (risk‑based perishable clauses)
1. LC issued with clean wording. Required docs: CI/PL, clean on‑board B/L, phytosanitary certificate, pre‑shipment inspection report, and temperature declaration.
2. Shipment.
3. Seller presents documents. Banks pay at sight if compliant.

Need help mapping these flows to your lane or product mix? You can Contact us on whatsapp for a quick, no‑obligation walkthrough.

Sample clause language you can use today

30/70 TT balance trigger: “Buyer shall remit 70% upon receipt of scanned CI/PL, draft on‑board B/L, phytosanitary certificate, pre‑shipment inspection report, and loading photos. Seller to withhold original B/L or telex release until funds credited.”
Temperature and quality: “Set point 2°C. Acceptable variance ±1°C. Temperature logger required in each pallet. If average voyage temp exceeds +1.5°C for >12 consecutive hours not attributable to buyer’s delay, parties agree a rebate of X% against affected cartons.”
No copy B/L risk: “Balance shall not be payable against copy B/L. Original B/L to be couriered to buyer’s bank upon receipt of balance or released via telex upon bank confirmation of funds.”
LC perishable adders: “Additional conditions: pre‑shipment inspection report by [SGS/Intertek/Buyer’s agent]; phytosanitary certificate; statement of container set temperature; clean on‑board B/L indicating reefer temperature; tolerance ±1°C.”

Decision triggers: when to choose what

Choose 30/70 TT if: order < $50k, you can accept controlled risk, and you can enforce original B/L control plus inspection photos and phyto before balance.
Choose DP/CAD if: you want bank‑managed release without LC friction and your bank processes collections quickly.
Choose LC at sight if: it’s a first‑time supplier with meaningful value at risk, or your policy mandates it, or you need bank‑enforceable conditions on quality and temperature.

Extra pitfalls we still see

Paying the balance against copy B/L. This is the most common avoidable mistake.
Over‑engineering LCs. Five extra conditions cause five extra discrepancies. Keep the LC tight but realistic for perishables.
Ignoring Incoterms impact. On FOB, you won’t get insurance documents. On CFR/CIF, align who buys freight and what the insurer covers.
No plan for temperature logger retrieval. Without the logger data, your quality claim weakens.

Migration guide if you’re switching

LC to TT: Run one shipment DP/CAD as a bridge. Keep the same document list as your LC, minus the bank formatting. If clean, move to 30/70 TT with BL control.
TT to LC: Start with a short‑form LC at sight, confirmed if needed. Limit documents to those you’ll actually produce: CI/PL, clean on‑board B/L, phytosanitary certificate, pre‑shipment inspection report, and temperature set‑point statement.

Where this advice applies: first orders under $50k, refrigerated fresh produce like Baby Romaine and Japanese Cucumber (Kyuri). For processed or frozen items, like Frozen Mixed Vegetables, timing risk is lower and TT becomes even easier to justify.

If you want to browse compatible items for your program, you can also View our products.