Date of Shipment

Stale Bill of Lading

Ozgur Eker (CDCS) Bill of Lading, Letter of Credit Documents , , , , ,
Stale Bill of Lading

According to the letter of credit rules a presentation consists of a transport document should be presented to the nominated bank within 21 days after the date of shipment, but not later than the expiry date of the letter of credit.

Bill of lading is a transport document covering the carriage of goods by sea.

If a set of documents, which consists of a bill of lading as a transport document, could not be presented to the nominated bank within 21 days after the date of shipment by the beneficiary, then late presentation discrepancy is emerged.

A bill of lading that is not presented within 21 days after shipment is called a Stale Bill of Lading.

In other words, stale bill of lading is a type of bill of lading which is presented to the nominated bank after the presentation period.

Stale Bill of Lading Example:

Let us try to understand the stale bill of lading term with an example.

An exporter in Malaysia signs a sales contract with an US importer for the sale of refined palm oil. The payment term is letter of credit. The importer have issued the letter of credit in favor of the exporter.

Letter of Credit Conditions:

  1. Latest Date of Shipment: 10.March.2019
  2. Expiry Date: 31.March.2019
  3. Presentation Period: 21 days after shipment but withing expiry date

Date of Shipment and Presentation Date:

The exporter completes the production and makes the shipment. Shipped on board date indicated on the bill of lading is 01.March.2019.

The exporter presents the documents to the nominated bank on 25.March.2019.

Conclusion:

The exporter could not complete the presentation within allowed time frame after shipment. Late presentation discrepancy condition has been fulfilled.

The shipping documents and also bill of lading is stale.

Related Articles:

How to Determine Date of Shipment on a Road Transport Document?

Ozgur Eker (CDCS) How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents, Road Transport Document ,
How to determine date of shipment on a Road Transport Document?

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 can be determined in two ways on a Road Transport Document.

  • In the first scenario we will face a situation where road transport document does not contain any date of receipt or a date of shipment notation.
  • In the second scenario we will be having a road transport document which contains a date of receipt or a date of shipment notation.

Option 1 => There is no notation of a date of receipt or a date of shipment on the Road Transport Document:

  • The date of issuance of the road transport document will be deemed to be the date of shipment.

Option 2=> Road transport document indicates, by notation, a date of receipt or a date of shipment:

  • Date of receipt notation/stamp => this date will be deemed to be the date of shipment.
  • Date of shipment notation/stamp => this date will be deemed to be the date of shipment.

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

Ozgur Eker (CDCS) Charter Party 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 Charter Party 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 can be determined in two ways on a Charter Party Bill of Lading.

  • In the first scenario we will face a situation where Charter Party Bill of Lading does not contain any date of shipped on board notation.
  • In the second scenario we will be having a Charter Party Bill of Lading which contains a dated shipped on board notation.

Option 1 => There is no shipped on board notation exists on the Charter Party Bill of Lading:

  • The date of issuance of the Charter Party Bill of Lading will be deemed to be the date of shipment.

Option 2=> Charter Party Bill of Lading indicates, by stamp or notation, a date of shipped on board: 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 Charter Party Bill of Lading.

As there is a dated on board notation exist on the Charter Party Bill of Lading, date of shipment will be deemed to be this shipped on board notation date which is 30.December.2012.

charter party bill of lading date of shipment

How to Determine Date of Shipment on a Sea Waybill?

Ozgur Eker (CDCS) How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents, Sea Waybill ,
How to determine date of shipment on a Non-Negotiable Sea Waybill?

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 can be determined in two ways on a Non-Negotiable Sea Waybill.

  • In the first scenario we will face a situation where Non-Negotiable Sea Waybill does not contain any date of shipped on board notation.
  • In the second scenario we will be having a Non-Negotiable Sea Waybill which contains a dated shipped on board notation.

Option 1 => No shipped on board notation exists on the Non-Negotiable Sea Waybill:

  • The date of issuance of the Non-Negotiable Sea Waybill will be deemed to be the date of shipment.

Option 2=> Non-Negotiable Sea Waybill indicates, by stamp or notation, a date of shipped on board:

  • 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 Non-Negotiable Sea Waybill.

As there is a dated on board notation exists on the Non-Negotiable Sea Waybill, date of shipment will be deemed to be this shipped on board notation date which is 30.December.2012.

date of shipment on sea waybill

How to Determine Date of Shipment on a Multimodal 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 Multimodal 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 can be determined in two ways on a multimodal bill of lading according to the letter of credit rules.

  • In the first scenario we will face a situation where multimodal bill of lading does not contain any date of dispatch, taking in charge or shipped on board notation.
  • In the second scenario we will be having a multimodal bill of lading which contains a date of dispatch, taking in charge or shipped on board notation.

Option 1 => There is no shipped on board or taking in charge notation exists on the multimodal bill of lading:

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

Option 2=> Multimodal bill of lading indicates, by stamp or notation, a date of dispatch, taking in charge or shipped on board: Notation date will be deemed to be the date of shipment as specified below:

  • Date of dispatched notation/stamp => this date will be deemed to be the date of shipment
  • Date of taken in charge notation/stamp => this date will be deemed to be the date of shipment
  • Date of shipped on board notation/stamp => this date will be deemed to be the date of shipment

Important Note: Only applies when the notation is in respect of dispatch, taking in charge or shipped on board at the place or port named in the credit for the commencement of the carriage.

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

How to Determine Date of Shipment on an Air Transport Document?

Ozgur Eker (CDCS) Air Waybill, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents ,
Date of Shipment on an Air Transport Document

An air waybill is a document covering the carriage of goods by plane from one airport to another.

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 can be determined in two ways on an air waybill.

Option 1 => There is no actual date of shipment notation on the air waybill:

  • The date of issuance of the air waybill will be deemed to be the date of shipment.

Option 2=> Air waybill indicates, by notation, the actual date of shipment: Notation date will be deemed to be the date of shipment as specified below:

  • Date of the actual date of shipment notation/stamp => this date will be deemed to be the date of shipment.
How to determine date of shipment on an Air Transport Document?
An air waybill with a separate actual date of shipment notation. The date of shipment on this air waybill is 15.05.2014 as indicated on the notation.

Dates

Ozgur Eker (CDCS) How to Work With a Letter of Credit, Letter of Credit Basics , ,
dates

Whatever your position in an international letter of credit transaction, whether you are an export specialist in a small manufacturing company, an import responsible in a medium size international trade firm or a trade finance expert in one of the first class banks, you should always be very careful with the dates of the documents.

The dates of the documents are one of the major sources of discrepancies. This is not only my claim, but also supported by evidences.

Significant amount of ICC Opinions are issued related to this subject for the last 25 years.

How to Deal with Dates of the Documents When Working with a Letter of Credit?

Make Sure That Each Document is Properly Dated: As a general rule each letter of credit document should be dated. The documents are expected to be dated after the issuance date of the credit, but not later than the presentation date.

Important Note: The letter of credit rules allow presentation of undated documents.

Additionally, documents dated prior to the issuance date of the credit is also acceptable under the letters of credit rules.

However, the issuing banks prevent presentation of such documents via additional conditions such as:

  • All documents including transport documents must be dated but not dated prior to the issuance date of this credit.
  • All required documents date should be later than issue date of this later of credit
  • All documents must be dated and made out in English language

Follow the Instructions Indicated in the Letter of Credit: Some of the letters of credit may contain special conditions regarding the dates of the documents such as:

  • Shipment dated before 16/11/2018 not acceptable (blocking regulatory condition).
  • First shipment is to be effected on or before 50 days from L/C issuance date.

If the letter of credit contains a clause as indicated above, the beneficiaries must act accordingly.

Make Sure That You are Using L/C Terminology Correctly: Some word have special meanings under the letter of credit rules such as:

  • The term “within” when used in connection with a date excludes that date in the calculation of the period.
  • “within 2 days after” indicates a period from the date of the event until 2 days after the event.
  • “not later than 2 days after” does not indicate a period, only a latest date. If an advice must not be dated prior to a specific date, the credit must so state.
  • “at least 2 days before” indicates that something must take place not later than 2 days before an event. There is no limit as to how early it may take place.
    “within 2 days of” indicates a period 2 days prior to the event until 2 days after the event.

Special Suggestions From the International Standard Banking Practice – ISBP 2007

  • Drafts, transport documents and insurance documents must be dated even if a credit does not expressly so require.
  • Documents must not indicate that they were issued after the date they are presented.
  • Any document, including a certificate of analysis, inspection certificate and pre-shipment inspection certificate, may be dated after the date of shipment. However, if a credit requires a document evidencing a pre-shipment event (e.g., pre-shipment inspection certificate), the document must, either by its title or content, indicate that the event (e.g., inspection) took place prior to or on the date of shipment.
  • A document indicating a date of preparation and a later date of signing is deemed to be issued on the date of signing.
  • Dates may be expressed in different formats, e.g., the 12th of November 2007 could be expressed as 12 Nov 07, 12Nov07, 12.11.2007, 12.11.07, 2007.11.12, 11.12.07, 121107, etc. Provided that the date intended can be determined from the document or from other documents included in the presentation, any of these formats are acceptable.
  • To avoid confusion it is recommended that the name of the month should be used instead of the number.

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

Date of Shipment

Ozgur Eker (CDCS) How to Work With a Letter of Credit, Letter of Credit Basics ,
Date of shipment

Date of shipment 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.

Using Date of Shipment in Order to Determine Whether Shipment Has Been Made on Time or Not:

If a letter of credit calls for an original transport document, it is also expected that the letter of credit indicates a latest date of shipment.

In this regard, it is of paramount importance to clarify which documents are considered as a transport document under the letter of credit rules:

Transport Documents Under the Letter Of Credit Rules: Below you can find the transport documents defined under the letter of credit rules.

  • Transport Document Covering at Least Two Different Modes of Transport (multimodal bill of lading or combined transport document etc…)
  • Bill of Lading (marine bill of lading, ocean bill of lading etc..)
  • Non-Negotiable Sea Waybill
  • Charter Party Bill of Lading
  • Air Transport Document (Air Waybill)
  • Road, Rail or Inland Waterway Transport Documents
  • Courier Receipt, Post Receipt or Certificate of Posting

transport documents as per ucp

If one of the transport documents is requested in the credit, the beneficiary must complete the shipment before the latest date of shipment. Otherwise the issuing bank finds the presentation not complying and raises a late shipment discrepancy.

Using Date of Shipment in Order to Determine Whether Documents Have Been Presented Within the Presentation Period or Not:

A presentation including at least one original transport document, which can be a multimodal bill of lading, combined transport document, bill of lading, non-negotiable sea waybill, charter party bill of lading, air transport document, road transport document, rail transport document, inland waterway transport document, courier receipt, post receipt or certificate of posting, must be made not later than 21 calendar days after the date of shipment.

In any case presentation must be made not later than the expiry date of the credit.

Using Date of Shipment to Determine Maturity Date of the Time Draft:

Letter of credit that has been issued available by acceptance of a time draft may specify a maturity date which will be calculated with the help of the date of shipment.

Let me give you a couple of examples:

  • at 60 days after the bill of lading date
  • at 90 days after bill of lading
  • after 30 days from date of bill of lading

When the tenor of the bill of exchange refers to, for example, 30 days after the bill of lading date, the on board date is deemed to be the bill of lading date.

On this occasion the on board date could be prior to or later than the issuance date of the bill of lading.

Using Date of Shipment to Determine Maturity Date of a Deferred Payment Letter of Credit:

Letter of credit that has been issued available by deferred payment may specify a maturity date which will be calculated with the help of the date of shipment.

Let me give you couple of examples as follows:

  • deferred payment at 60 days after the bill of lading date
  • deferred payment at 90 days after bill of lading
  • deferred payment after 30 days from date of bill of lading

When tenor or maturity date of the deferred payment refers to, for example, 30 days after the bill of lading date, the on board date is deemed to be the bill of lading date.

On this occasion the on board date could be prior to or later than the issuance date of the bill of lading.