Bill of Lading

Importance of Bill of Lading Title: Ocean or Marine Bill of Lading

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents , , , ,
bill of lading title. ocean or marine bill of lading

Issuing banks often require an ocean bill of lading or a marine bill of lading under letters of credit as a transport document.

The question is whether the title of the bill of lading is important or not when checking the documents?

Letter of Credit Examples:

Ocean Bill of Lading Example

  • Full set of clean shipped on board ocean bills of lading drawn or endorsed to the order of issuing bank ltd, Sana’a Yemen showing freight prepaid and marked notify
    a.applicant (giving full name and address).
    b.issuing bank ltd Sana’a Republic of Yemen.

Marine Bill of Lading Example

  • Full set of clean on board marine bill(s) of lading issued or endorsed to the order of Issuing Bank PLC, notify applicant showing freight prepaid and showing full name and address of the shipping company agent or his representative in Bahrain.

Each shipping line has a pre-printed form of bills of lading.

Some shipping lines are using ocean bills of lading and others are using marine bill(s) of lading.

It is highly likely to be working with a shipping company who has a marine bill(s) of lading pre-printed form where credit calls for an ocean bill of lading or vice versa.

According to latest letter of credit rules

“A bill of lading need not be titled “marine bill of lading”, “ocean bill of lading”, “port‐to‐port bill of lading” or words of similar effect even when the credit so names the required document.”

As a result title of the bill of lading is not important when checking the documents under the letter of credit transactions.

What are the Differences Between a Bill of Lading and a Charter Party Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, Charter Party Bill of Lading, Letter of Credit Documents, Logistics ,
What are the Differences Between a Bill of Lading and a Charter Party Bill of Lading?

Under the current letter of credit rules and international standard banking practices, if a letter of credit calls for a marine bill of lading, then banks do not accept a charter party bill of lading in lieu of a marine bill of lading.

On this article I will try to answer the question “Why a charter party bill of lading is not acceptable in place of a marine bill of lading?” by clarifying the main differences between each transport documents.

Differences Between a Charter Party Bill of Lading and Marine Bill of Lading:

Charter Party Clause: Charter party bill of lading contains a clause stating that it is subject to a charter party. Marine bill of lading does not contain such a clause or similar wording.

Signatures:

  • Marine bills of lading can be signed by;
    • the carrier or a named agent for or on behalf of the carrier, or
    • the master or a named agent for or on behalf of the master.
  • Charter party bills of lading can be signed by;
    • the master or a named agent for or on behalf of the master, or
    • the owner or a named agent for or on behalf of the owner, or
    • the charterer or a named agent for or on behalf of the charterer.

Usage:

  • Charter party bills of lading will be used mainly for big bulk shipments such as 20.000 mtons of soybean transportation from a US port to a Chinese port.
  • Marine bills of lading mostly used for containerized cargo that is transported by regular line container vessels.

Examples of Charter Party Clauses:

Below indications could turn a marine bill of lading into a charter party bill of lading. (Source : www.commerzbank.com)

  • “Prepayable freight paid as per charter party dd. …”
  • “Freight payable as per charter party dd. …”
  • “Freight as agreed”
  • “Bill of lading to be used with charter parties”

What is Congenbill Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, Charter Party Bill of Lading, Letter of Credit Documents , ,
congenbill

Congenbill is a type of charter party bill of lading which is widely used in international transportation.

Congenbill 2007 is the latest version of standard charter party bill of lading which is issued and approved by the BIMCO’s Documentary Committee.

BIMCO is a well established international shipping association and its long form is also known as “The Baltic and International Maritime Council”.

Congenbill 2007

  • According to the UCP 600 rules a bill of lading which contains an indication that it is subject to a charter party will be classified as a charter party bill of lading. Congenbill 2007 Bill of Lading indicates on its face “To be used with charter parties”. This makes Congenbill 2007 a charter party bill of lading according to the letter of credit rules.
  • The Congenbill Charter Party Bill of Lading can be used wide range cargo that does not need special handling. Because of this reason it is one of the most popular Charter Party Bill of Lading (CPBL) in use.
  • Sample Congenbill 2007 bill of lading is reachable from this link.

There are other charter party bills of ladings that have been issued by BIMCO. These are specific charter party bills of lading suitable for limited niche charter party operations.

Some examples of specific charter party bills of lading issued by BIMCO:

  • AUSTWHEAT BILL
  • BIMCHEMVOYBILL 2008
  • CEMENTVOYBILL 2006
  • INTANKBILL 78
  • GRAINCONBILL

How to Determine Maturity Date if Letter of Credit States That Tenor of the L/C is 60 Days After Bill of Lading Issue Date?

Ozgur Eker (CDCS) Bill of Exchange, Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents , , ,
How to Determine Maturity Date if Letter of Credit States That Tenor of the L/C is 60 Days After Bill of Lading Issue Date?

Maturity date is a term related to a time draft.

A time draft is a form of payment that is guaranteed by an issuing bank, but is not payable in full until a specified amount of time after it is received and accepted. (1)

The maturity date is a date on which a bill of exchange or deferred payment undertaking under a documentary credit is to be paid by the party assuming the undertaking. (2)

Determining the maturity date is an important concept especially when the letter of credit is available with a time draft.

Example: A letter of credit has been issued by an international bank’s branch in France states that the documentary credit is available by drafts payable at 60 days after bill of lading issue date.

The beneficiary has presented the bill of lading showing:

  • date of issue : 04.August.2014 and
  • shipped on board date :  01.August.2014.

How to determine maturity date if letter of credit states that tenor of the L/C is 60 days after bill of lading issue date?

How to determine the maturity date of the draft based on above information?

First of all we need to understand that whether there are any differences exist between the “bill of lading date” and the “bill of lading issue date”.

When we look at the ISBP 745 we understand that ICC Banking commission used these terms with the same meaning. As a result both “bill of lading date” and “bill of lading issue date” have the same meaning in terms of letter of credit rules.

Secondly we need to answer which date we should be using when determining the maturity date of the draft.

Should we use bill of lading issuance date or shipped on board date?

Once again we need to look at the ISBP 745 for the correct answer. ISBP 745 states that shipped on board date is deemed to be bill of lading date or bill of lading issue date with the following statement:

“When the tenor refers to, for example, 60 days after the bill of lading date, the on board date is deemed to be the bill of lading date even when the on board date is prior to or later than the date of issuance of the bill of lading.”

As a result we need to use shipped on board date when determining the maturity date of the draft even if the letter of credit states that tenor of the L/C is 60 days after bill of lading issue date.

On the above example shipped on board date is 01.August.2014 and tenor is 60 days after bill of lading issuance date.

We should accept shipped on board date as bill of lading issue date and should use it on calculation of the maturity date.

The maturity date is 30.September.2014.

Important Note: You should add 60 days to 01.August.2014. Remember you should exclude 01.August.2014 when counting 60 days.

Sources:

  1. https://www.investopedia.com/terms/t/time-draft.asp
  2. Documentary credits in practice, Reinhard Längerich, Second edition – 2009, Page: 304, Published by: Nordea

Freight Forwarder’s Bill of Lading Not Acceptable

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents, Negotiable FIATA Multimodal Transport Bill of Lading ,
Freight Forwarder’s Bill of Lading Not Acceptable

Some issuing banks add an additional condition to the letters of credit they have issued, indicating that freight forwarder’s bill of lading is not acceptable.

  • Why issuing banks disallow freight forwarder’s bill of lading?
  • What happens if issuing bank forbids presentation of a freight forwarder’s bill of lading under a letter of credit?

If an issuing bank wants to prohibit presentation of a freight forwarder’s bill of lading, can achieve this aim simply by adding a condition under field 47-A Additional Conditions.

Below you can find some example texts, disallowing presentation of freight forwarder’s bill of lading.

Sample Texts from Selected Letters of Credit

  • Forwarder’s bill of lading not acceptable.
  • Transport documents issued by freight forwarder are not acceptable.
  • Goods must be shipped through the nominated liner which will be advised by the applicant in a certified format with applicant’s seal, a copy of the same must be presented for negotiation and the bill of lading, (freight forwarder’s bill of lading is not acceptable) must evidence that the goods have been shipped on the liner specified therein.

Why issuing banks disallow freight forwarder’s bill of lading?

Issuing banks want to secure themselves as much as possible by requesting not a freight forwarder’s bill of lading, but a carrier’s bill of lading.

A carrier’s bill of lading, which is known as master bill of lading, give more security to the issuing banks comparing to freight forwarder’s bill of lading, which is known as house bill of lading.

differences between a freight forwarder's bill of lading and a carrier's bill of lading

What Does the Letter of Credit Rules Tell About Disallowing Freight Forwarder’s Bill of Lading?

UCP 600:

UCP 600 sub-article 14(l) states that

“A transport document may be issued by any party other than a carrier, owner, master or charterer provided that the transport document meets the requirements of articles 19, 20, 21, 22, 23 or 24 of these rules.”

UCP 600 sub-article 20(a) states that

a.A bill of lading, however named, must appear to:
i. indicate the name of the carrier and be signed by:
– the carrier or a named agent for or on behalf of the carrier, or
– the master or a named agent for or on behalf of the master.

ISBP 745:

ISBP 745 states that

“A stipulation in a credit that “Freight Forwarder’s Bills of Lading are not acceptable” or “House Bills of Lading are not acceptable” or words of similar effect has no meaning in the context of the title, format, content or signing of a bill of lading unless the credit provides specific requirements detailing how the bill of lading is to be issued and signed. In the absence of these requirements, such a stipulation is to be disregarded, and the bill of lading presented is to be examined according to the requirements of UCP 600 article 20″.

  • According to latest version of international standard banking practices, “Freight Forwarder’s Bills of Lading are not acceptable” or “House Bills of Lading are not acceptable” stipulations in a letter of credit has no meaning unless banks defines how the bill of lading is to be issued and signed.
  • If no specific requirements have been mentioned in the letter of credit in regards to issuance and signature of the bill of lading, then banks, nominated bank, confirming bank and issuing bank, have to disregard such a stipulation.
Official Opinion R643 / TA669rev – 2005-2008:

If a transport document states “freight forwarder bills of lading are not acceptable” or “house bills of lading not acceptable”, can the freight forwarder or agent sign the bill of lading according to the requirements expressed in sub-article 20 (a) (i)?

Query

ICC Opinion TA 572 – Issue No. 1 (October 2004) describes the situation in which the documentary credit states that “Transport document issued by Freight Forwarder not acceptable”. The conclusion of the Opinion was that ” … the bank would be obliged to accept a bill of lading that was signed ‘as carrier’ irrespective of any knowledge it may have as to the capacity of the issuer” – i.e., even when the transport document was entitled “FBL BIFA Negotiable FIATA Multimodal Transport Bill of Lading”.

a-The above Opinion was given subject to UCP 500, and we ask you kindly to inform us if the same position would apply under UCP 600.

b-Also kindly advise if the conclusion above would be the same had the documentary credit stated that “House bill of lading not acceptable” or similar.

Analysis

One of the reasons behind conditions such as “freight forwarder bills of lading are not acceptable” or “house bills of lading not acceptable” is to require the issuance of a bill of lading by the carrier, albeit that the freight forwarder or agent could sign the bill of lading according to the requirements expressed in sub-article 20 (a) (i). If a freight forwarder or agent signs as carrier, the bill of lading becomes a carrier document.

Conclusion

The same position applies under UCP 600.
If the credit states “house bill of lading not acceptable” or similar, the same position will apply.

What is a Freight Forwarder’s Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, Letter of Credit Documents, Logistics, Negotiable FIATA Multimodal Transport Bill of Lading ,
What is a Freight Forwarder’s Bill of Lading?

A freight forwarder’s bill of lading is a transport document which is issued by a freight forwarder.

It is also known as a house bill of lading.

What Does Freight Forwarder’s Bill of Lading Mean in Export and Import Businesses?

A freight forwarder’s bill of lading (FBL) is a transport document, which is used in sea shipments and multimodal shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What are the Main Features of a Freight Forwarder’s Bill of Lading (FBL)?

  • A freight forwarder’s bill of lading generally issued on a freight forwarder’s bill of lading format. It is also known as house bill of lading (HBL).
  • A freight forwarder’s bill of lading issued and signed by a forwarder without indicating any signing authority either a carrier or as agent of the carrier. In some occasions forwarder companies sign FBLs “as carrier”, especially when their clients require a letter of credit compliant bill of lading.
  • A freight forwarder’s bill of lading (FBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • A freight forwarder’s bill of lading is signed by the forwarder and states the terms and conditions of carriage for the forwarder company’s perspective. FBL does not contain actual carrier’s carriage contract, as a result shipper and consignee stated on the house bill of lading is not a direct participant of the carriage contract indicated on the master bill of lading.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of LadingHouse Bill of Lading
Master Bill of Lading:
Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.		House Bill of Lading:
Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading:
Signed either by the carrier or an agent of the carrier.		House Bill of Lading:
Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading:
Issued on a pre-printed form of an actual carrier's bill of lading.		House Bill of Lading:
Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading:
Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.		House Bill of Lading:
May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading:
States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.		House Bill of Lading:
States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading:
States actual carrier's bill of lading number.		House Bill of Lading:
States forwarder company's bill of lading number.

Forwarder’s bill of lading is also known as house bill of lading.

Is Freight Forwarder’s Bill of Lading Acceptable Under Letters of Credit?

According to the letter of credit rules, unless otherwise indicated in a specific letter of credit, it is possible to present a freight forwarders bill of lading.

But the bill of lading must be issued in accordance with the UCP 600 rules.

As a result if a letter of credit requests a marine bill of lading, it is possible to present a carrier’s bill of lading, forwarder’s bill of lading (house bill of lading in other words) or multi modal bill of lading without any problem, as long as the presented document conforms the respected letter of credit rules.

Important Note: It is not possible to present a charter party bill of lading if a letter of credit requests a marine bill of lading.

Letter of Credit Example with Freight Forwarder’s Bill of Lading Presentation:

Letter of Credit Sample: Field: 46A: Documents Required

  1. Full set of original clean on board ocean bills of lading made out to the order of issuing bank marked freight to be collected and notify applicant indicating this documentary credit number and name, address, telephone no of the carrying vessels agent at the port of discharge.

Option 1: Freight Forwarder’s bill of lading presented which is signed as carrier

Forwarder's bill of lading presented which is signed as carrier

The exporter presented a freight forwarder’s bill of lading, which is signed “as carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as a carrier and signed by the same company as carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Option 2: Freight Forwarder’s bill of lading presented which is signed as agent for the carrier

Option 2 : Forwarder's bill of lading presented which is signed as agent for the carrier.The exporter presented a freight forwarder’s bill of lading, which is signed “as agent for carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as agent for the carrier and signed by the same company as agent on behalf of the carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Important Note: If Freight Forwarder’s Bill of lading is not signed one of the methods explained above, then banks may raise a discrepancy called “Carrier Not Identified or Bill of Lading not Signed as per UCP“.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Ozgur Eker (CDCS) Bill of Lading, Letter of Credit Documents, Logistics , , ,
Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)

Understanding the differences between a master bill of lading and a house bill of lading in export and import transactions.

What Does a Master Bill of Lading Mean in Export and Import Businesses?

A master bill of lading (MBL) is a transport document, which is used in sea shipments, issued and signed by a sea cargo carrier or its agent, generally on a pre-printed carrier’s bill of lading format, evidences the terms and conditions of the carriage of goods between port of loading to port of discharge.

What Are the Main Features of a Master Bill of Lading (MBL)?

  • A master bill of lading generally issued on a pre-printed bill of lading form of an issuer carrier.
  • A master bill of lading issued and signed by a carrier or an agent on behalf of the carrier.
  • A master bill of lading (MBL) is issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • A master bill of lading is signed by the actual carrier and states the terms and conditions of the carriage, as a result consignee may have a better protection in case the goods are damaged or lost in transit.

Figure 1: Master Bill of Lading Sample (Carrier: Maersk Line) Figure 1 : Master Bill of Lading Sample (Carrier : Maersk Line)

What Does a House Bill of Lading Mean in Export and Import Businesses?

A house bill of lading (HBL) is a transport document, which is used in sea shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What Are the Main Features of a House Bill of Lading (HBL)?

  • A house bill of lading generally issued on a freight forwarder’s bill of lading format.
  • A house bill of lading issued and signed by a forwarder without indicating any signing authority either carrier or as agent of the carrier. In some occasions forwarder companies sign HBLs “as carrier”, especially when their clients require a bill of lading compliant to the letter of credit conditions.
  • A house bill of lading (HBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • House bill of lading is signed by the forwarder, and it states the terms and conditions of carriage for the forwarder company’s perspective. A house bill of lading does not contain actual carrier’s carriage contract, as a result the shipper stated on the house bill of lading is not identified in the actual carrier’s contract.

Figure 2: House Bill of Lading Sample

Figure 2 : House Bill of Lading Sample

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of LadingHouse Bill of Lading
Master Bill of Lading:
Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.		House Bill of Lading:
Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading:
Signed either by the carrier or an agent of the carrier.		House Bill of Lading:
Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading:
Issued on a pre-printed form of an actual carrier's bill of lading.		House Bill of Lading:
Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading:
Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.		House Bill of Lading:
May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading:
States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.		House Bill of Lading:
States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading:
States actual carrier's bill of lading number.		House Bill of Lading:
States forwarder company's bill of lading number.

What are the Differences Between Air Waybill and Bill of Lading?

Ozgur Eker (CDCS) Air Waybill, Bill of Lading, Letter of Credit Documents, Logistics ,
Differences Between Air Waybill and Bill of Lading

What Does Bill of Lading Mean in Export and Import Businesses?

Bill of lading (B/L) is a transport document, which is used in port-to-port sea shipments, issued and signed by a carrier or its agent, generally on a pre-printed carrier’s bill of lading format, evidences the terms and conditions of the carriage of goods between port of loading and port of discharge.

What are the Main Features of a Bill of Lading (B/L)?

  • A negotiable bill of lading represents the title of the goods and normally has to be surrendered at the port of discharge to the carrier’s agent to obtain delivery of the goods.
  • A bill of lading is regarded as a negotiable document if issued “to order and black endorsed” or “to order of a (named party)”.
  • A bill of lading issued and signed by a carrier or an agent on behalf of the carrier is called a master bill of lading.
  • A bill of lading issued and signed by a freight forwarder is called a house bill of lading.
  • There are certain differences exist between a master bill of lading and house bill of lading.
  • A bill of lading generally issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • Because a bill of lading is used in port-to-port sea shipments, it can be used in conjunction with all the trade terms defined in Incoterms 2010 rules.

Figure 1 : Bill of Lading Sample

Figure 1 : Bill of Lading Sample

What Does Air Waybill Mean in Export and Import Businesses?

An air waybill (AWB) is a transport document, which is used in air shipments, issued and signed by an airline cargo carrier or its agent, generally on a pre-printed air waybill format, evidences the terms and conditions of the carriage of goods over routes of the airline carrier(s).

What are the Main Features of an Air Waybill (AWB)?

  • An air waybill, contrary to bill of lading, is not a document of title, as a result it is not a negotiable document. The carrier’s agent delivers goods by approving the identity of the consignee without requesting surrender of the original air waybill.
  • An air Waybill is not a negotiable document as a result it cannot be issued “to order and black endorsed” or “to order of an issuing bank”. An air waybill can only be consigned to a “named company”.
  • An air waybill can be issued and signed by a carrier or an agent on behalf of the carrier.
  • Alternatively it can be issued and signed by a freight forwarder. But carrier air waybill and forwarder air waybill have some differences. For more information please read my article “What is the difference between MAWB (Master Air Waybill) and HAWB (House Air Waybill)?“
  • An air waybill generally issued subject to Warsaw Convention, Hague amendment, Montreal Convention, etc.
  • An air waybill should be used in airport-to-airport shipments, as a result it cannot be used in conjunction with the incoterms available only sea shipments such as FAS, FOB, CFR and CIF. For further information please look at “What happens if a letter of credit calls for a wrong Incoterms?“.

Figure 2 : Air Waybill Sample

Figure 1 : Master Air Waybill Sample

What are the Differences Between Air Waybill and Bill of Lading?

Air WaybillBill of Lading
Air Waybill:
Air waybill should be used in air shipments.		Bill of Lading:
Bill of lading should be used in port-to-port sea shipments.
Air Waybill:
Air waybill is not a document of title.		Bill of Lading:
Negotiable bill of lading is a document of title. At least one original bill of lading must be surrender to collect the goods from the carrier.
Air Waybill:
Air Waybill cannot be issued "to order and black endorsed" or "to order of an issuing bank".		Bill of Lading:
Bill of lading can be issued "to order and black endorsed" or "to order of an issuing bank".
Air Waybill:
Air waybill generally issued subject to Warsaw Convention, Hague amendment, Montreal Convention, etc.		Bill of Lading:
Bill of lading generally issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Air Waybill:
Air waybill cannot be used in conjunction with the incoterms available only sea shipments such as FAS, FOB, CFR and CIF.		Bill of Lading:
Bill of lading can be used in conjunction with all of the incoterms available.

L/C Demands a B/L Stating That All Original B/Ls Must be Surrendered

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents ,
Bill of Lading Stating That All Originals Must be Surrendered

A negotiable bill of lading is a bill of lading where the consignee’s name is preceded by the words “to order,” thus allowing the consignee to endorse the bill of lading to another party, thereby transferring title of the relative goods to another party. (1)

The importer has to present at least one original copy of the negotiable bill of lading to the carrier’s agent at the port of discharge in order to receive goods from the carrier.

What happens if letter of credit requests presentation of all original bills of lading to the carrier as follows?

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Question Comes from Heidi, Hayward, California, USA:

Can you please take a look at the following L/C language for the required documents of the B/Ls and confirm this will be manageable with the steamship lines?

  • Full Set of clean on board bills of lading made out to the order of opening bank and marked “freight prepaid” and notify applicant.
  • Bills of Lading to show the name and address and telephone/fax numbers of shipping company/agent representing them at port of destination.
  • B/L to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Please advise.

Thank you,

Answer:

Thanks for your question.

Above letter of credit condition, which can be evaluated as a standard format, used by many banks under field 46-A: Documents Required.

The only part that you should be careful is the following one:

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Apparently the issuing bank would like to say:

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all original bills of lading.

The problem with above condition is that it contradicts surrender clauses of the most, if not all, bills of lading in circulation as can be seen on below image.

surrender clause of a bill of lading
Surrender clause of a typical negotiable bill of lading used in port to port container carriages.

Each original negotiable bills of lading is equally represents the title of goods, as a result when one them surrendered to the carrier, the remaining ones becomes void.

For this reason it is highly recommended either correction or deletion of this clause from the letter of credit.

Sources:

  1. International Trade Procedures: A guide to doing business abroad, Wells Fargo Bank, Page: 70

How to Determine Date of Shipment on a Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents , ,
How to determine date of shipment on a Bill of Lading

Date of shipment is one of the key definitions in a letter of credit transaction. It is used to determine

  • whether shipment made on time or not (in other words a late shipment has been effected or not)
  • whether documents presented within the presentation period or not (in other words a late presentation has been effected or not)
  • maturity date of the time draft
  • maturity date of a deferred payment letter of credit.

Date of shipment on a bill of lading can be determined in two ways.

In the first scenario, we will face a situation where a bill of lading does not contain any dated shipped on board notation.

In the second scenario, we will be having a bill of lading which contains a dated shipped on board notation.

Option 1 => There is no shipped on board notation exists on the bill of lading:

  • The date of issuance of the bill of lading will be deemed to be the date of shipment.

Option 2=> Bill of lading indicates, by stamp or notation, a shipped on board date:

  • Notation date will be deemed to be the date of shipment as specified below: Date of shipped on board notation/stamp => this date will be deemed to be the date of shipment

Example: On the below figure, you can see a shipped on board notation which is located on the bottom of a bill of lading. As there is a dated on board notation exist on the bill of lading, date of shipment will be deemed to be this shipped on board notation date which is 14.May.2018.

Date of shipment on a bill of lading