Cash Before Shipment (CBS) is a payment term in international trade that is extremely favorable to the seller. It means the buyer must pay the full amount to the seller's account before the seller arranges shipment, and the seller only fulfills the delivery obligation after confirming receipt of payment. This term is commonly used in small transactions, first-time cooperation with new customers, situations where the buyer's credit status is unclear, or business in high-risk countries/regions, effectively avoiding the seller's risk of non-payment. Precautions when using it include: the seller must specify in the contract the exact bank account and deadline for the funds to arrive, to prevent the buyer from using a remittance receipt as a reason to demand early shipment; also, it should state who bears the bank charges. It is similar to T/T in advance (pre-T/T), but CBS emphasizes the 'before shipment' time point, distinguishing it from 'documents against payment' or 'partial advance payment + balance against copy of B/L'. Compared with O/A (open account) and D/P (documents against payment), CBS ties up more of the buyer's funds and may reduce the buyer's willingness to purchase, so the seller may offer appropriate concessions on price or delivery time to facilitate the transaction.
📝 Examples
1. Since this is our first cooperation and the order amount is small, we require 100% cash before shipment, i.e., after you remit the full payment to our account, we will arrange shipment within 3 working days. (Note: The seller uses CBS for new customers to avoid payment risk and specifies the shipment time.)
2. The payment term for this order is cash before shipment. Please ensure payment is completed 10 days before the shipment date stipulated in the contract; otherwise, it may cause delays in the shipping schedule, and any additional costs incurred shall be borne by the buyer. (Note: The seller emphasizes the payment deadline and consequences of delay, reminding the buyer to pay on time.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner