Rail Transport Document

What Does Full Set of Bills of Lading Mean?

Ozgur Eker (CDCS) Air Waybill, Bill of Lading, Charter Party Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents, Rail Transport Document, Road Transport Document, Sea Waybill ,
What does full set of bill of lading mean?

Under an ordinary letter of credit, the issuing bank demands a full set of clean shipped on board ocean bills of lading from the beneficiary.

But what is a full set of bill of lading according to the letter of credit rules? How does a beneficiary make sure that he presents a full set of bills of lading?

Most of the transport documents, that is subject to international transportation, issued in more than one originals.

For example, a CMR road consignment note is issued in 3 original copies. The first copy for the exporter, the second to accompany the goods; and the third for retention by the carrier. (1)

Understanding the Reasons Behind the Issuance of Multiple Original Transport Documents:

International transport documents can be classified under two main groups: Negotiable transport documents and non-negotiable transport documents.

 

Multiple Original Transport Documents

Negotiable transport document is a title of goods, such as an original bill of lading, which can be transferred to another party by endorsement.

At least one original negotiable transport document must be surrendered to the carrier by the consignee at the place of destination to collect the goods.

Negotiable transport documents are issued in more than one originals in order to prevent lost of documents.

Non-negotiable transport document is a not a title of property and the consignment is placed at the disposal of the stipulated consignee against a proof of identity without further need to surrendering any original transport document.(2)

Non-negotiable transport documents are issued in more than one originals mainly for operational purposes as some of the original copies of these documents are traveling with the goods.

Full Set of Ocean Bills of Lading Under a Letter of Credit

According to the letter of credit rules, a bill of lading is to indicate the number of originals that have been issued and all of the originals stated on the bill of lading have to be presented by the beneficiary to the issuing bank, unless otherwise indicated in the credit.

For example, container carriers issue bills of lading in a set of 3 original and 3 copies as an established tradition for decades.

The letter of credit rules taking into account only the original bills of lading as a transport document by disregarding the non-negotiable copies.

Example:

  • A letter of credit issued asking for a full set of clean ”shipped on board” negotiable bill of lading showing freight prepaid made out/endorsed to the issuing bank, notifying the issuing bank and the applicant with full address.
  • The bill of lading indicated that it has issued in 3 originals.
  • The beneficiary has presented all of the 3 originals as a full set of bills of lading.

Important Note: The beneficiary could have presented 3 originals and 3 copies of the bills of lading without any problem.

Letter of Credit Rules:

UCP 600 – Article 20 – Bill of Lading
iv- Be the sole original bill of lading or, if issued in more than one original, be the full set as indicated on the bill of lading.

ISBP 2007 – Full set of originals Paragraph 93
As per UCP 600 article 20 transport document must indicate the number of originals that have been issued. Transport documents marked “First Original”, “Second Original”, “Third Original”, “Original”, “Duplicate”, “Triplicate”, etc., or similar expressions are all originals. Bills of lading need not be marked “original” to be acceptable as an original bill of lading. In addition to UCP 600 article 17, the ICC Banking Commission Policy Statement, document 470/871(Rev), titled “The determination of an ‘Original’ document in the context of UCP 500 sub-Article 20(b)” is recommended for further guidance on originals and copies and remains valid under UCP 600. The content of the Policy Statement appears in the Appendix of this publication, for reference purposes. (Please keep in mind that ISBP 2007 has been updated and is not the effective version as of July 2013.)

References:

  1. The CMR Convention, The British International Freight Association (BIFA) Website, Retrieved: 21.06.2018
  2. Shipping and Incoterms, Practice Guide, UNDP Practice Series, Page:50

Rail Transport Document (CIM)

Ozgur Eker (CDCS) Letter of Credit Documents, Rail Transport Document , ,
rail transport document

On this page, I will try to explain you “Rail Transport Document” and its applications in letters of credit transactions.

Banks mention “Rail Transport Document” as “Rail Transport Document “, “Rail Consignment Note”, or “CIM Consignment Note” in letters of credit.

Rail transport document or rail consignment note is a transport document used in rail shipments.

Rail consignment note confirms that the rail carrier has received the goods and that a contract of carriage exists between trader and carrier.

Key details to be provided in the note include: a description of the goods; the number of packages and their weight; the names and addresses of the sender and recipient. (1)

Important Note 1 : Rail transport document is not a document title of goods, which means that rail transport document is a non-negotiable transport document.

As a result, rail carriers will be able to deliver goods to the consignee without obtaining one original copy of rail transport document.

For this reason, exporters and banks (issuing bank and confirming bank) have to be very careful when working with a letter of credit demanding a rail transport document as a transport document, because neither exporters nor banks could secure goods as a collateral.

Important Note 2 : The Intergovernmental Organisation for International Carriage by Rail (OTIF) was set up on 1 May 1985. 48 States are Members of OTIF at the present time (Europe, Asia and North Africa) and one State is an Associate Member (Jordan).

The Intergovernmental Organisation for International Carriage by Rail (OTIF) has developed the uniform systems of law which apply to freight in international through traffic by rail.

These systems of law are known as the Convention concerning International Carriage by Rail (COTIF) of 9 May 1980 (1999 Protocol) .

Appendix B to the Convention concerning International Carriage by Rail (COTIF) of 9 June 1999 is Uniform Rules Concerning the Contract of International Carriage of Goods by Rail (CIM).

Transport document prepared according to the CIM Convention is called CIM Rail Consignment Note.

Uniform Rules Concerning the Contract of International Carriage of Goods by Rail (CIM)

rail transport document sample
Sample CIM Consignment Note

How to Use Rail Transport Document in Letters of Credit Transactions:

Rail Transport Document / Rail Consignment Note is covered under article 24 of UCP 600.

A rail transport document, however named, must appear to:

  1. indicate the name of the carrier and:
    – be signed by the carrier or a named agent for or on behalf of the carrier, or
    – indicate receipt of the goods by signature, stamp or notation by the carrier or a named agent for or on behalf of the carrier.
  2. indicate the date of shipment or the date the goods have been received for shipment, dispatch or carriage at the place stated in the credit. Unless the transport document contains a dated reception stamp, an indication of the date of receipt or a date of shipment, the date of issuance of the transport document will be deemed to be the date of shipment.
  3. indicate the place of shipment and the place of destination stated in the credit.

A rail transport document marked “duplicate” will be accepted as an original.

  • A rail transport document will be accepted as an original whether marked as an original or not.

In the absence of an indication on the transport document as to the number of originals issued, the number presented will be deemed to constitute a full set.

For the purpose of this article, transhipment means unloading from one means of conveyance and reloading to another means of conveyance, within the same mode of transport, during the carriage from the place of shipment, dispatch or carriage to the place of destination stated in the credit. (2)

Special Hints Regarding the Rail Transport Document From ISBP (International Standard Banking Practice):

If a credit requires presentation of a transport document covering movement by road, rail or inland waterway, UCP 600 article 24 is applicable.

References:

  1. How to move goods by rail, Key rail transport documents by Invest Northern Ireland, is the official online channel for business advice and guidance in Northern Ireland.
  2. UCP 600