Meet Roy Broadhead – Undisputed Master of the Art of Getting Paid
8 September 2024
In international business, it is increasingly rare to meet someone who has dedicated their whole working life to mastering just one thing, but Roy Broadhead (pictured below) has done exactly that.
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Roy began as a junior clerk in an export shipping department in Bradford - his employer was a leading textile manufacturer at the time, employing more than 600 people in spinning and weaving. He soon found himself drawn to the details of export paperwork and, specifically, how companies get paid. This brought him into contact with the “Letter of Credit”, an international payment method which might look a bit old-fashioned in today’s world of fancy fintech solutions, where money can be sent anywhere by the touch of a few buttons on the phone in your pocket, but which continues to be the gold-standard in terms of security, in the ever-changing global trade arena.
As West Yorkshire’s textile industry declined, fabric manufacturers went through major restructuring, and, having worked his way up to the responsibility of Export Shipping Manager, Roy was saddened to hear that he was being made redundant. However, the company soon realised that they couldn’t do without his expertise, and he was re-engaged on a freelance basis to handle their export documentation and letters of credit arrangements. At the same time, other exporting companies approached him for similar help, and Roy found himself managing letters of credit for multiple businesses in different fields.
Unsurprisingly, Roy had already developed connections with Chamber International by that time. He had referred exporters to CI when they needed certificates of origin, for instance. But things took a new course when CI’s long-time director Tim Bailey phoned Roy one day to refer a business to him – the light bulb producer Sylvania, whose factory was in Shipley, and which had become part of the Osram electrical empire. “The businesses of exporting had been transferred to them, but they had no idea what to do with all the paperwork thrust upon them”, Roy recalls. “I explained that if they didn’t get it right, they would have boxes of light bulbs piled up in customs accruing storage costs. So, they asked, ‘Can you help?’ – and I did!”.
In 2012, Roy accepted an invitation to join Chamber International formally, and this has led to him regularly arranging letter of credit payments for engineering companies, including a large diesel generator manufacturer. Others he has assisted include: a company with a £3 million order for railway sleeper pins; an order from California for more than 20 shipping containers of poultry processing equipment; even one with a £4 million order from Saudi Arabia for top-rope climbing adventure equipment.
“They are all interesting in their own different ways”, he says. “Some countries have long lists of requirements for letter of credit. Getting paid by customers in Bangladesh will need you to prove the use of Bangladesh-approved shipping vessels, Bangladesh-approved crates, and that’s just the start of it”.
Getting paid by documentary letter of credit involves sending certain proof documents relating to the order, to the customers bank for approval – if those documents are not accepted by the bank as correct and fulfilling the requirements of the letter of credit in every way, then payment will not be released. That’s why UK businesses seek out Roy and ask him to do “pre-presentation checks” on those documents, to ensure they are correct in all details before they get sent to the bank. Then, if the letter of credit is “irrevocable”, payment will be released, whether the customer likes it or not. “To get an order worth £40,000, companies soon find it’s worth a few hundred to make sure they understand and can meet the LoC requirements, and get paid”, he says.
When managed well, letters of credit provide a guarantee of payment, including staged payments. They also enable governments to track capital outflows – which is why countries such as Egypt and Pakistan have mandated the use of letters of credit for all import purchases, except those of low value.
These are the reasons why it looks like letters of credit will be with us for a good many years to come, even though the landscape of international trade has changed in many ways since Roy started his career. With so few real masters around, we can all be glad he shows no sign of hanging up his hat just yet.
Contact Chamber International today for expert assistance on Letters of Credit and for more information on our fully managed low-cost service. We help you get it right first time, and maximise your profits when trading internationally.
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