IO loaded ships don't sail from ports until they've received...

IO loaded ships don't sail from ports until they've received money from Chinese buyers or their remitting bankers.

Very little seaborne IO is sold on contracts. Most is purchased at the port of destination at daily spot prices. The supplier only knows the value once it is sold.

That is partly why the small miners are shutting down - they have no contracts or forward sales.

IO companies also farm out shipping to third-party most of the time,

Vale haven't received the memo yet. They own their own ships, That is why they can ship IO much further for half the cost

What's the guarantee that they won't declare bankruptcy after they've got your goods.

The money paid into an escrow account. Once the IO is delivered the payment is handed over by the bank. It's a standard business practice.