“The Carrier” – or “As Carrier?”
Writing books can be lonely – but that is sometime balanced when they are out. You may get in touch with people from corners of the world that you would otherwise never get in touch with. Sometimes it even opens new insights.
Last week I had such experience. I received a message from Beirut. The sender made comments about my book “UCP 600 Transport Documents.” He was rather upset about me using the phrase “as carrier” when explaining how a transport document subject to UCP 600 should be issued/signed. He argued that the UCP 600 uses the phrase “the carrier,” and even said that I inform the reader in many places in the book that the document checker will accept a document that is signed “as carrier,” which apparently is very wrong.
He argued for this statement by saying that the signature of the carrier on the bill of lading must be “the carrier” or “carrier” and not “as carrier.” “As carrier” is wrong because it can “hide” a “Freight forwarder,” an “NVOCC” or a “Consolidator cargo carrier,” who may be a “non authorized carrier.” The words “as carrier” can therefore conceal fraud.
I must admit that this contact puzzled me a lot. I guess I simply failed to see the problem. So basically I answered that I do acknowledge that I do not explain the various issues (like the issue in question) the exact same way as the UCP 600 / ISBP does, but that this is on purpose - as I am trying to explain it in a more direct and practical manner. I added that I actually do not think that there is a real distinction (LC wise) between "the carrier" and "as carrier." I referred to ICC Opinion TA669 where the analysis includes the following:
"If a freight forwarder or agent signs as carrier, the bill of lading becomes a carrier document."
In other words: a freight forwarder (or for that matter a NVOCC) may indeed sign the transport document "as carrier" and that would be acceptable under UCP 600. This is actually what is intended by UCP 600 article 14(l), which reads:
"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."
Case closed … I thought.
However, my friend from Beirut did not agree to closing the case, and reverted by saying that he did not endorse ICC Opinion TA 669 …. He further argued that “the carrier” or “carrier” may be an “owner carrier” or a “charterer carrier” or even a “contracting carrier,” all of which are qualified carrier thereby being responsible and liable to the consignee or the holder of the original bill of lading in performing the contract of carriage and in delivering the cargo against surrender of the original bill of lading.
Hmmm I retaliated by saying that where we basically differ is regarding of ICC opinion TA 669. My intention with this book is to help the parties using LCs - e.g. help the beneficiary get paid - and help the applicant draft a good and sold LC text - that will provide an expected result. In that respect I have decided to base the various topics on the UCP 600 and the established international standard banking practice - which includes the ICC Opinions. I find it most fair to provide advise that is in line with established rules and practice.
Case definitely closed! … I thought …
But not: The counter argument was that it is more reasonable that the LC must help the beneficiary get paid and help the applicant draft a good and solid LC text. Using the words “as carrier” is hiding (in 95% of the cases) the real identity of the signer, i.e. a freight forwarder or an NVOCC who in fact is not an authorized carrier. This is why LCs should prohibit bills of lading signed “as carrier.”
So – the problem is “freight forwarders” – I understood …and therefore responded that I accept the point made, but would observe that the challenge with freight forwarders may not be the same all over the world. For example in the Nordic area freight forwarders are well regulated; i.e. there are rules determining their responsibility (also when acting "as carrier") - and also a mandatory insurance. So here no one would "fear" a freight forwarder signing "as carrier." Of course freight forwarders may do foul things - also in my country - but so may a shipping line; or for that matter a shipping line agent. I added that I do not think that prohibiting "as carrier" helps achieving anything. I used to work as freight forwarder - who issued bills of lading where it was impossible to tell that they were in fact freight forwarder, and they did so simply stating their name and "carrier." What would be needed in the LC is – for example – a statement that "the carrier is the owner of the vessel." And still - if it is a party that really wants to do foul things - they will issue that document although it may not be the truth. So at the end of the day the best advise is: Make a contract of carriage with a part you trust - and require in the LC that the B/L must be issued by that part.
And there the throwing of arguments ended!
However this e-mail exchange really opened my eyes – let me sum-up:
1: I truly believe that the UCP 600 does not prohibit a bill of lading being signed “as carrier”
2: In my book “UCP 600 Transport Documents” I actually refer to the LC requirement that the bill of lading must not be signed “As Carrier” (page 124 and 125). The statement in the book is that such requirement must be complied with – bit that it is hard to grasp the logic of such requirement. The logic is now much clearer: This is an attempt to avoid bills of lading being issued by freight forwarders and NVOCC’s - because those represent a real problem I certain parts of the world.
3: The issue of freight forwarders and NVOCC’s is indeed interesting – as their “status” differs completely in different parts of the world. Therefore I accept that there is may be a need to prohibit that the transport document presented under an LC is issued by such part.
4: That being said – I still think that the best option is to be clear in the LC who is to issue the transport document.
5: One should also acknowledge that for the purpose of UCP 600 it is practically impossible to prohibit freight forwarders. For example a statement like “Freight forwarders bill of lading not acceptable” is deemed ambiguous – and will be disregarded. In other words even where the LC prohibits freight forwarders – the bill of lading presented will be accepted if signed according to UCP 600 article 20 – even if it is clear that it is issued by a freight forwarding company ….
Chapter 4.3.1. in my book “UCP 600 Transport Documents” elaborates further on documents issued by freight forwarders. A truly favourite topic of mine …
Take care of each other – and the LC!
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