Bill of Lading

Unclean Bill of Lading Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , , ,
unclean bill of lading discrepancy

A clean bill of lading is a type of transport document, which bears no clause or notation, which expressly declares a defective condition of the goods and/or the packaging.

Banks can accept only clean transport documents under letters of credit transactions.

Banks do not accept any unclean transport document.

As a result, presentation of an unclean bill of lading would create a discrepancy, in the eyes of the banks.

What makes a bill of lading clean or unclean?

  • An express clause declares a defective condition of the goods makes the bill of lading unclean.
  • An express clause declares a defective condition of the packages of the goods makes the bill of lading unclean.

Please kindly keep in mind that below points do not make a bill of lading unclean.

  • Absence of the word “clean” does not make a bill of lading unclean.
  • Deletion of the word “clean” does not make a bill of lading unclean.

Sample Clauses Which Make a Transport Document Unclean:

  • Packaging is not sufficient for port to port ocean transportation.
  • Goods which improperly stored at the port of loading have been shipped on board partially wet and not in good condition.

Example of an Unclean Bill of Lading Discrepancy:

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:

Letter of Credit Conditions

Field 45A: Description of Goods and or Services: Fruits

Field 46A: Documents Required: Full set of clean on board bill of lading marked freight payable at destination made out to order of Bankinter, SA notify Applicant Company with full address and contact details as indicated in the credit.

Bill of Lading

The beneficiary presented a bill of lading with the following clause: Packaging is not sufficient for the sea journey.

Discrepancy: Unclean bill of lading presented.

Reason for Discrepancy: A bank will only accept a clean transport document. A clean transport document is one bearing no clause or notation expressly declaring a defective condition of the goods or their packaging.

How to Prevent an Unclean Bill of Lading Discrepancy:

  • Do not focus on “Clean” word, that might be stated on the credit. A clean bill of lading need not to indicate “clean on board” notation. “Shipped on board” notation is enough.
  • Make sure that, the shipment is effected in a sound way. The goods are packed well, secured inside the container and there is no leakage out of the container.
  • If you are going to make a bulk shipment, make sure that the goods will not be affected from bad weather.
  • Speak with your logistics provider, in advance of the shipment, and learn all necessary precautions that you need to take, in order to prevent an unclean bill of lading issuance.

Partial Shipment Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , ,
partial shipment discrepancy

The importer and exporter should determine, when signing the sales contract, to allow or prohibit partial shipments.

Partial shipment can be defined as shipping the goods not whole at once, but in more than one smaller shipments.

Partial shipments total may be less than the total contract amount.

The letter of credit rules allow partial shipments and partial drawings. But, in some occasions, issuing banks tend to restrict partial shipments.

In order to understand, whether or not partial shipments are allowed under a documentary credit, you need to look at “Field 43P: Partial Shipments” within the swift message body.

  • Field 43P: Partial Shipments: Allowed means that partial shipments are permitted
  • Field 43P: Partial Shipments: Not Allowed means that partial shipments are not permitted.

If the issuing bank finds out that partial shipments have been effected, although the letter of credit prohibits partial shipments, then the issuing bank will raise a discrepancy, which is known as partial shipments discrepancy.

Sample Partial Shipment Discrepancy on a Bill of Lading under a Letter of Credit:

A letter of credit has been issued in SWIFT format, subject to UCP 600, with the following details:

Letter of Credit Conditions

Field 43P: Partial Shipments: Not Allowed

Field 43T: Transhipment: Not Allowed

Field 45-A: Description of Goods: 24 Pcs of Food Sorting Machinery

Field 46A: Documents Required: Full set of original bill of lading laden on board marked freight collect made out to the order of HSBC Bank, USA notify applicant.

The beneficiary presented two set of documents containing two bills of lading among other documents with the following data:

partial shipment

Discrepancy: Partial Shipment Effected.

Reason for Discrepancy: The beneficiary presented two sets of documents within the same presentation. The issuing bank determined that partial shipment has been effected on contrary to the letter of credit terms, because goods have been dispatched with two different vessels.

How to Prevent a Partial Shipment Discrepancy?

  1. Check the letter of credit before shipment of goods, in order to determine whether or not partial shipment is prohibited.
  2. If partial shipment is allowed, you can make smaller shipments until you reach total letter of credit amount. Be careful with the latest date of shipment.
  3. If partial shipment is not allowed, but your intention to do so; then you must get in touch with your customer to amend the letter.

Gross Weight is Different on Documents Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , ,
gross weight discrepancy

In a letter of credit transaction, the gross weight must show the same value on all presented documents.

As an example, the gross weight on the bill of lading must not conflict with the gross weight stated on the packing list, weight list or any other document.

According to the letter of credit rules, a data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit.

If the issuing bank finds out that the gross weight on bill of lading and packing list do not match, then the issuing bank will raise a discrepancy, which is known as the gross weight is different on the bill of lading than the gross weight stated on the packing list.

Discrepancy Example: Gross Weight is Different on the Bill of Lading Than the Gross Weight Stated on the Packing List under a Letter of Credit:

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:

Letter of Credit Conditions

Field 43P: Partial Shipments: Allowed

Field 43T: Transhipment: Allowed

Field 45-A: Description of Goods: 24,000,00 KGS Textile Dyeing Chemicals

Field 46A: Documents Required:

  • Full set of original bill of lading laden on board marked freight collect made out to the order of Citibank, USA notify applicant.
  • Packing list one original and one copy.
  • Commercial invoice in three originals.

The beneficiary presented a bill of lading and a packing list among other documents with the following data:

Gross weight on bill of lading and packing list are inconsistent
Discrepancy Example: Bill of Lading and Packing List Details

Discrepancy: Gross weight on the bill of lading and packing list is inconsistent.

Reason for Discrepancy: Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit.

Late Shipment Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , ,
late shipment discrepancy

Documentary credits often include a “latest date of shipment”. Latest date of shipment is one of the most important definitions in commercial documentary credits.

As a beneficiary, if you are obligated to make a shipment  under a commercial letter of credit, and need to present a transport document; such as a port-to-port marine bill of lading, then you must complete the shipment before the latest date of shipment stated in the credit.

Which means that, the date of shipment indicated on the bill of lading must not show a date, that is after the latest date of shipment marked in the credit.

If you fail to complete your shipment before the allowed time frame, then you will get a late shipment discrepancy from the issuing bank.

After the issuing bank determines that your presentation is not complying, you can reach to the payment only after applicant accepts the discrepancies

Sample Late Shipment Discrepancy under a Letter Of Credit:

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:

Letter of Credit Conditions

Field 44C: Latest Date of Shipment: 141031

Field 44E: Port of Loading/Airport of Departure: Port of Ningbo, China

Field 44F: Port of Discharge/Airport of Destination: Port of Auckland, New Zealand

Field 46A: Documents Required: Full set of original bill of lading clean on board established to the order of Societe Generale Algerie Spa notify applicant marked freight prepaid.

The beneficiary presented a bill of lading with the following data:

Bill of Lading

Port of Loading: Port of Ningbo, China

Port of Discharge: Port of Auckland, New Zealand

Bill of Lading: The bill of lading is dated 01.November.2014. In addition, it contains an on-board notation as follows: “Shipped on board : 01.November.2014”.

Discrepancy: Marine bill of lading shows a late shipment. Both bill of lading date and on board notation date indicate a late shipment. Date of shipment falls outside the allowed shipment period.

Reason for Discrepancy: If the letter of credit requires a presentation one of the transport documents as indicated in UCP 600, the date of shipment stated on the transport document must not be showing a later date than the latest date of shipment stated in the letter of credit.

shipped on board letter of credit

Bill of lading shows a late shipment as date of shipment is a later date than the latest date of shipment indicated in the letter of credit.

Port of Discharge Different Than Letter of Credit Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , ,
port of discharge discrepancy

A bill of lading is a generic term for a transport document, that covers transport by sea from a port of loading to a port of discharge.

Port of discharge can be defined as a port, where a vessel will unload its cargo, from where the cargo will be dispatched further to their final consignees.

Port of discharge, as stated by the letter of credit, should appear in the port of discharge field within a bill of lading.

If the issuing bank finds out that a port to port shipment ends in a different port of discharge than what is indicated in the letter of credit, then the issuing bank will raise a discrepancy, which is known as port of discharge different than letter of credit discrepancy.

Sample Port of Discharge Different Than Letter of Credit Discrepancy under a Letter of Credit:

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:

Letter of Credit Conditions

Field 44E: Port of Loading/Airport of Departure: Port of Marseille, France

Field 44F: Port of Discharge/Airport of Destination: Port of Incheon, South Korea

Field 46A: Documents Required: Full set of marine bills of lading marked shipped on board issued or endorsed to the order of Kookmin Bank showing freight prepaid, notify applicant and showing the following details: Full applicant name, address as indicated in field 50.

The beneficiary presented a bill of lading with the following data:

Bill of Lading

Port of Loading: Port of Marseille, France

Port of Discharge: Port of Ulsan, South Korea

Discrepancy: Marine bill of lading shows a port of discharge different than what is stated in the letter of credit. Port of discharge should have been Port of Incheon, South Korea, but it was stated as Port of Ulsan, South Korea, which is not as per letter of credit conditions.

Reason for Discrepancy: A bill of lading is to indicate the port of discharge stated in the credit. The named port of discharge, as required by the credit, should appear in the port of discharge field on a bill of lading.

Required Port of Discharge : Port of Incheon

port of discharge incheon

Wrong Port of Discharge : Port of Ulsan, S.Korea

port of discharge ulsan

Port of Loading Different Than Letter of Credit Discrepancy

Ozgur Eker (CDCS) Bill of Lading Discrepancies, Letter of Credit Discrepancies , , , , ,
port of loading discrepancy

A bill of lading is a generic term for a transport document, that covers transport by sea from a port of loading to a port of discharge.

All shipments, that covered under a bill of lading, must be made between the port of loading and port of discharge, which are stated in the letter of credit.

If the issuing bank finds out that the shipment is effected from a different port of loading than what is stated in the letter of credit, then the issuing bank will raise a discrepancy, which is known as port of loading different than letter of credit discrepancy.

Sample Port of Loading Different Than Letter of Credit Discrepancy under a Letter Of Credit:

A letter of credit has been issued in SWIFT format, subject to UCPURR latest version, with the following details:

Letter of Credit Conditions

Field 44E: Port of Loading/Airport of Departure:
Port of Haifa, Israel

Field 44F: Port of Discharge/Airport of Destination:
Port of Toronto, Canada

Field 46A: Documents Required: Full set of marine bills of lading marked shipped on board issued or endorsed to the order of Royal Bank of Canada showing freight payable at destination and notify applicant and showing the following details: Full applicant name, address as indicated in field 50.

The beneficiary has presented the bill of lading with the following data:

Bill of Lading

Port of Loading: Port of Ashdod, Israel

Port of Discharge: Port of Toronto, Canada

Discrepancy: Marine bill of lading shows a port of loading different than what is stated in the letter of credit. Port of loading should have been Port of Haifa, Israel but it was stated as Port of Ashdod, Israel which is not as per letter of credit conditions.

Reason for Discrepancy: A bill of lading is to indicate the port of loading stated in the credit. The named port of loading, as required by the credit, should appear in the port of loading field on a bill of lading.

Required Port of Loading : Port of Haifa, Israel

port of loading discrepancy

Wrong Port of Loading : Port of Ashdod, Israel

port of loading discrepancy