ISBP 745 (I.e. the new one to be published later this month) includes the following (paragraph E28):
A bill of lading is not to expressly state that goods covered by that bill of lading will only be released upon its surrender together with one or more other bills of lading, unless all of the referenced bills of lading form part of the same presentation under the same credit.
For example, “Container XXXX is covered by B/L No. YYY and ZZZ and can only be released to a single merchant upon presentation of all bills of lading of that merchant” is considered to be an express statement that one or more other bills of lading, related to the referenced container or packing unit, must be surrendered prior to the goods being released.
In this blog post I will explain the background for this practice.
In container shipments, the shipping lines use a certain terminology to indicate how the shipper is to deliver goods to the shipping line at the place or port of dispatch and subsequently how they are to be released to the consignee at destination.
This is often referred to as “movements.”
This information is important in container shipments to establish liability and freight amount depending on whether the container is stuffed by the shipper or the shipping line and is due to be stripped by the consignee or the shipping line.
In many cases sea containers contain more than one consignment. Quite often goods are “consolidated,” meaning, for example, that a freight forwarder has received a number of consignments of general cargo in separate packages for different shippers to different consignees, packed those together into one container, and then booked the full container with the shipping line as “one container.”
The destination agent will usually strip the container upon arrival and release each consignment separately to the respective consignees after receiving the bills of lading issued. Consolidation is quite normal and is generally acceptable in documentary credit transactions, with one exception.
Sometimes the transport document, most commonly a bill of lading, is structured in a way so as to indicate that the goods shipped in the container are covered by more than one bill of lading, and that all bills of lading related to the container must be presented to the carrier in order for the container to be released. Such a document is not acceptable under the documentary credit unless all issued bills of lading form part of the same presentation. This is to protect the separate buyer that has already paid for the goods from being denied possession.
When goods are transported in containers, “movements” indicate how the carrier receives the goods and how they are to be delivered to the consignee upon arrival at the destination.
There are two basic scenarios:
1. When the goods are delivered and/or released in an un-containerized form, but scheduled to be shipped in a container, this is called “Less than container load” (LCL), and goods are handled in a “container freight station” (CFS).
2. When the goods are delivered and/or released in a containerized form, this is called “Full container load” (FCL), and the container is handled in the “container yard” (CY). Alternatively, goods may be picked up at shipper’s door and/or delivered to the consignee’s door. This is called “store door” (SD).
This information is important for determining who has ‘stuffed’ the container, and thereby who can be held responsible if the goods are missing or damaged. The “codes” in various combinations indicate:
* Who is responsible for loading/unloading the container
* How the consignment is delivered to the shipping line
* How it is released to the consignee at the end of the voyage
For example LCL/FCL means that the shipper delivers the goods to the carrier as General Cargo (as separate packages), Carrier releases the goods to the consignee in one full container. This combination may be used when one consignee has several suppliers in the same country. Suppliers deliver their part to the carrier, who stuffs the container and ships it to the consignee. The consignee then collects the whole container and is responsible for unloading it.
In such case, there MAY be a reason for refusal when combined with other information on the transport document. The combination that most commonly creates a discrepancy is as follows:
1. The transport document shows the following movement: LCL/FCL, AND
2. The transport document shows that the goods covered by the document are “part load,” meaning that the container contains more cargo than the goods shown on the bill of lading.
”Container ABCU123456-0 is covered by B/L No. A001 and A002, and can only be released to a single merchant upon presentation of all BS/L of that merchant”.
By structuring the bill of lading this way, the shipping line on one hand indicates that goods are to be released as a “Full container load” (The shipping line will not strip the container at port of discharge, but will arrange for release of the full container). On the other hand, it indicates that the container holds more than the consignment covered by the bill of lading in hand.
To comply with these terms, both (or all) related sets of bills of lading must be presented before the shipping line will release the container.
Document checkers need proper understanding of the transport industry terminology in such instances. While document checkers within banks cannot be expected to be experts in all fields (transport, insurance, etc.), they should have some knowledge of the terminology in order to properly examine transport documents.
ISBP 745 has taken one step further than its predecessor, in adding the above example. This is helpful indeed.
More information about movements in my book UCP 600 Transport Documents (http://www.remburs.com/UCP%20600.htm).
Take care of each other and the LC!
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