Multimodal transport documents and the UCP 600 - Frequently asked questions on the MMTD document
(This document has previously been published on www.forwarderlaw.com)
[28 February 2008]
With the development of containerization and Ro-Ro traffic unimodal transport documents have beenadapted to the new reality. Now a transport document covering a multimodal or combined shipmentmay take the form of a Bill of Lading, Road Waybill or Rail Waybill. This diversity of documents is asource of confusion among parties dealing with them under documentary credits. To assist bankers andtraders in understanding these matters I address herein the features that distinguish multimodaltransport documents from unimodal transport documents.
Content: Multimodal Transport Document or Combined Transport Document? When is CMR road consignment note acceptable as Combined Transport Document? CIM Consignment Note for Combined Transport: Rail Waybill or Combined Transport Document? CMNI Transport Document: Inland Waterway Transport Document or Combined Transport Document? Multimodal Transport Document or Combined Transport Document? In European terminology, Multimodal Transport is defined as a carriage by at least two different modes of transport, while Combined Transport is defined as the transport of intermodal transport units where the greater part of the journey is made by rail, by inland waterway or by sea and the initial or terminal journeys are made by another mode of transport, typically road. This is the reason why although the term "combined transport document" is no longer used anymore in Bills of Lading since the adoption in 1992 of UNCTAD/ ICC Rules for Multimodal Transport Documents (ICC Publication No.481), it is used by Europeans in CIM rail consignment note or with reference to CMR road consignment note. Whilst a transport document covering a multimodal or combined shipment may take the form of a Bill of Lading, Road Waybill, Rail Waybill or an Inland Waterway Transport Document, traders and bankers should be aware of the differences between them. Firstly, a Bill of Lading for a multimodal transport shipment can be a document of title, while a land carriage document is not such a document. Secondly, these documents are issued subject to different liability regimes: - Multimodal Transport Bills of Lading are issued subject to the network liability system whereby the existing mandatory rules governing unimodal carriage will apply when the loss or damage to the goods occurs on that particular mode. For example, if the container is lost overboard, the carrier's liability will be determined in accordance with the Hague/ Hague Visby Rules, while if the container is lost in a road accident, the liability will be determined in accordance with the CMR Convention. Otherwise said, if the container with the goods is lost or damaged during the sea carriage liabilities under the Multimodal Transport Document are the same as under a Bill of Lading, while if that occurs during road carriage liabilities are the same as under a CMR Consignment Note. - Road and Rail Waybills are issued subject to the uniform liability system whereby the same rules apply throughout the duration of the contract whichever mode is used.
Bills of Lading issued by shipping lines: Port-to-Port Bills of Lading or Multimodal Transport Documents?
As a function of the type of service required by shipper, a shipping line may act as a sea carrier or as a multimodal transport operator, shipping lines use the same form of Bill of Lading for both port-to-port shipments and multimodal transport shipments. When a shipping line performs a FCL port/FCL depot service it acts solely as a sea carrier for a port-to-port transport service only. When, in addition to port-to-port transport the shipping line also undertakes inland transport between the place of taking in charge and the port of loading, and between the port of discharge and the place of final destination, the shipping line acts as a multimodal transport operator.
Neither UCP 500 nor UCP 600 distinguishes transport documents issued by shipping lines as Port-to-Port Bills of Lading or Multimodal Transport Bills of Lading. UCP 600 does not require that Bills of Lading covering port-to-port shipments and multimodal transport documents bear one name or another but to fulfill the conditions set therein. Whether a transport document is a Port-to-Port or a Multimodal Transport Bill of Lading depends on the type of service required as particularized on the face of the document. Bankers should check what notations contain the Bills of Lading in respect of places of receipt and delivery, as well as the vessel’s name, shipment date and freight.
Notations in respect of places of receipt and delivery
One point in the check list for determining whether a Bill of Lading issued by a shipping line is a Port-to-Port Bill of Lading or a Multimodal Transport Bill of Lading is the notations in respect of places of receipt and delivery. Bills of Lading for container shipments commonly show a place of receipt and a place of delivery in addition to ports of loading and discharge. When these places of receipt and delivery are the same as the stated ports of loading and discharge, e.g. as it is the case with Container Yards andContainer Freight Stations, the Bill of Lading indicates a port-to-port shipment. When they are different in the sense that either one or both of these places are situated inland, then the Bill of Lading evidences a multimodal transport.
One form of Port-to-Port Bill of Lading is the Bill of Lading evidencing shipment of containers on board of ships performing a feeder service. The attempt to cover this matter in UCP 500 has been a long source of confusion. For an example in this sense see the commentaries of Peter Jones, Chris Gillespie and Helena Kwok on art.23 of UCP 500:
http://www.forwarderlaw.com/library/view.php?article_id56
I am referring to the provisions of Art.23 (a) (ii) and (iii) allowing Port-to-Port Bill of Lading to show a place of receipt different from the port of loading, respectively a place of delivery different from the port of discharge.
In the meantime, ICC Banking Commission came with new opinions on the matter:
first in ICC R227, where said that Port-to-Port Bill of Lading may indicate as port of loading either the port where the goods were loaded on board the ocean vessel or the port where the goods wereloaded on board the feeder vessel;
then in ICC Publication No.645 (ISBP) where said that the port of loading stipulated in L/C may be stated in the field headed “place of receipt”, provided there is an “on board” notation evidencing that the goods were loaded on the vessel at the port stated in the field headed “place of receipt”;
and finally in UCP 600 art.20 (a) (iii) which stipulates that if the Port-to-Port Bill of Lading does not indicate the port of loading stipulated in L/C as port of loading, e.g. shows the port of loading stipulated in L/C as “place of receipt” instead as “port of loading”, or contains the indication “intended” or similar qualification in relation to the port of loading, the Port-to-Port Bill of Lading must bear an “on board” notation indicating the date of shipment, the port of loading and the name of vessel on board of which the container with goods has been loaded, e.g.
“SHIPPED ON BOARD ON 27 JANUARY 2007
PORT OF LOADING: ……………..
VESSEL NAME: ……………”
Notations in relation to vessel’s name
Another point in the check list for determining whether a Bill of Lading issued by a shipping line is a Port-to-Port Bill of Lading or a Multimodal Transport Bill of Lading is the notation referring to vessel’s name.
Whilst Art.19 of UCP 600 setting the requirements for multimodal transport documents provides that a Multimodal Transport Bill of Lading may contain solely the indication "intended" or similar qualification with regard to the vessel’s name, Art.20 of UCP 600 setting the requirements for Port-to-Port Bill of Lading requires that Bill of Lading indicate the name of vessel on board of which the goods have been loaded. If, however, in the Port-to-Port Bill of Lading it is used the indication “intended vessel” or similar qualification in relation to the name of vessel, UCP 600 requires that Port-to-Port Bill of Lading bear an “on board” notation indicating the date of shipment and the name of actual vessel, as shown herein, e.g.:
“SHIPPED ON BOARD ON 27 JANUARY 2007
VESSEL NAME: …………..”
The “on board” notation does not need to be signed or otherwise authenticated by carrier’s agent to be acceptable under L/C.
This applies as well to the Port-to-Port Bills of Lading presented in electronic (PDF) format. Here is what eUCP Article e10 – Transport provides on this matter:
“If an electronic record evidencing transport does not indicate a date of shipment or dispatch, the date of issuance of the electronic record will be deemed to be the date of shipment or dispatch. However, if the electronic record bears a notation that evidences the date of shipment or dispatch, the date of the notation will be deemed to be the date of shipment or dispatch. A notation showing additional data content need not be separately signed or otherwise authenticated.” For a Port-to-Port Bill of Lading presented in electronic (PDF) format, the “on board” notation must be stamped or superimposed electronically.
Notations in respect of shipment date
In Port-to-Port Bill of Lading indication of shipment date is possible in two ways:
Where the Bill of Lading has pre-printed wording indicating that the goods have been loaded on board or shipped on a named vessel, e.g. “Shipped on board in apparent good order and condition….” the issuance date is considered to be the date of shipment.
In cases where the Bill of Lading evidences only the receipt of goods, e.g. “Received by the Carrier from the Shipper in apparent good order and condition …” or else does not have pre-printed wording indicating that the goods have been loaded on board or shipped on a named vessel, the loading on board a named vessel need to be evidenced by an “on board” notation indicating the shipment date. The date of the “on board” notation is considered to be the date of shipment. In Multimodal Transport Bill of Lading the indication of shipment date by “on board” notation is required only when the place of receipt is the same place as the port of loading.
Freight notations
Another point to watch for are freight notations which in the case of a Bill of Lading covering a port-to- port shipment consist of loading terminal handling charges, sea freight and destination terminal handling charges, while in the case of a Bill of Lading covering a multimodal transport shipment include also the Inland Haulage Charges at Origin and/or Destination. While there may be shown other charges as well this depend on the destination country.
When is CMR road consignment note acceptable as Combined Transport Document?
The CMR Convention (Convention on the Contract for the International Carriage of Goods by Road) applies to a contract of carriage by road if the place of taking in charge of goods by road haulier and the designated place of delivery are in two different states, of which at least one is a party to CMR Convention. According to Art.2, the Convention would also apply to a combined transport when the road vehicle containing the goods is itself carried over part of the journey by other mode of transport (e.g. rail, sea or inland waterway) and the goods are not unloaded from the road vehicle. This means that if a road vehicle is transported on board a Ro-Ro (ferry) vessel, the CMR Convention applies also to the sea transport. If transported by rail, the CMR Convention would still apply. The CMR Convention shall cease to apply only when the loading unit is separated from lorry in which case the conventions for seatransport (Hague- / Hague-Visby / Hamburg Rules) or rail transport (CIM), as the case may be, shall apply.
This matter is particularly important in Europe where combined transport is seen as a means of shifting the traffic off the road using rail, sea or inland waterways for the major part of the journey. For this reason in 1997 the European Conference of Ministers of Transport adopted Resolution No.97/6 on the Development of Combined Transport whereby the road hauliers are offered tax exemptions in proportion to the journeys that such vehicles undertake by rail, sea or inland waterways in a combined transport operation provided that they show to the competent authority a documentary proof that the transportation done is indeed a combined transport.
When part of the journey is made on board of a Ro-Ro vessel, the documentary proof is to be in the form of a CMR Consignment Note which must bear the remark “transport to ship” and indicate the intended port of loading, vessel and port of discharge. In addition,the second original of the Consignment Note must bear the “on board” endorsement of the Ro-Ro vessel operator with the date of rolling on the ship, the port of loading, the port of discharge with the stamps of port authorities, to comply with art.35 of the Convention.
Art.35 of the Convention provides that a successive carrier (e.g. Ro-Ro vessel operator or a railway company) shall be held responsible for loss or damage occurred during the time when goods were in his responsibility only if he has accepted the goods and the CMR consignment note. Since the forwarders acting as combined road/sea or road/rail transport operators are considered first carriers under the CMR Convention they should ensure that the name and address or stamp of all successive carriers appears in the second original of consignment note in the box provided.
For our discussion, the second original is not an issue since the consignor receives only the first original and this is the document that will be presented to the bank for payment.
Here is what art.19 of UCP 600 requires:
“a transport document covering at least two different modes of transport (multimodal or combinedtransport document), however named, that … indicates the place of dispatch, taking in charge orshipment and the place of final destination stipulated in the credit, even if: a. the transport document states, in addition to that place, another place of dispatch, taking in chargeor shipment or another place of final destination, or b. the transport document contains the indication "intended" or similar qualification in relation to thevessel or port of loading or port of discharge. |
It appears that such document would meet the requirements of art.19 of UCP 600 and where a CMR Consignment Note bears the remark “transport to ship” and indicates the intended port of loading, vessel and port of discharge the Article that applies is art.19 (Transport Document Covering at Least Two Different Modes of Transport) rather than art.24 that states, inter alia, the requirements for the road transport documents.
When part of the journey is made on a rail wagon, the documentary proof required in 1997 was CIM/UIRR Consignment Note which in the meantime has been replaced by newly adopted CIM Consignment Note for Combined Transport.
The option for issuance of CMR Consignment Note or CIM Consignment Note for Combined Transport does not depend on the second mode of transport used but rather on the type of haulage operation: in the case of an accompanied transport operation (when the whole lorry accompanied by the driver is transhipped on Ro-Ro vessel or on rail wagon, as the case may be) the proper combinedtransport document will be a CMR Consignment Note to comply with Art.2 of CMR Convention cited above, while in the case of unaccompanied transport operation (when only the loading unit, e.g. container, is transported) the proper combined transport document will be CIM Consignment Note for Combined Transport.
CIM Consignment Note for Combined Transport: Rail Waybill or Combined Transport Document?
CIM Rules (1999 Uniform Rules Concerning the Contract of International Carriage of Goods by Rail (CIM)) apply to a contract of carriage by rail if the place of taking in charge of goods and the designated place of delivery are situated in two different states, of which at least one is a party to CIM Convention and the parties to the contract agree that the contract is subject to the CIM Rules.
According to Art.1 (3) and (4), CIM Rules would also apply to an international carriage that includes carriage by road or inland waterway or by sea as a supplement to transfrontier carriage by rail, if the respective carriage is performed in addition to carriage by rail subject to a single contract of carriage.
Following CIM Rules, The International Union of Combined Road – Rail Transport Companies (UIRR) in Europe adopted their own carriage conditions in a similar way as FIATA did with its Model Rules after the adoption of UNCTAD/ ICC Rules for Multimodal Transport Documents. For a while the transport document used in Europe for combined rail/ road transport was CIM/ UIRR Consignment Note still in use today. In 2006 The International Rail Transport Committee introduced CIM Consignment Note for Combined Transport, to facilitate the combined transport in Europe and the electronic trade, as the new document can be processed in electronic (pdf) format. A manual with the specimen of new transport document is available on The International Rail Transport Committee web site www.cit-rail.org so the bankers and traders have the opportunity to educate themselves. The bankers should be aware that the new document is different from the old form of CIM Consignment Note currently still in use. E.g. Whether used for combined transport or for rail carriage only the date of issuance indicated in Box 29 of the new transport document is deemed to be the date of shipment.
In the old form of CIM Consignment Note currently still in use, the shipment date is considered in international banking practice the date indicated in Box 92 in the reception stamp of the station of departure. So, the recommendations set in 2002 by ICC Banking Commission in ICC Publication No.645 (International Standard Banking Practice (ISBP) for the Examination of Documents underDocumentary Credits) paragraph 172 for determination of shipment date in rail transport documents need to be amended to be in accordance with the new reality.
One benefit of CIM Consignment Note for Combined Transport is the possibility to be used for the rail-sea traffic covering the sea routes listed in the CIM list of maritime and inland waterway services.
CMNI Transport Document: Inland Waterway Transport Document or Combined Transport Document?
CMNI convention (the Budapest Convention on the Contract for the Carriage of Goods by Inland Waterways (CMNI)) applies on contracts concerning the carriage of goods solely by inland waterway but it is also applicable if the purpose of the contract is the carriage of goods, without transshipment, both on inland waterways and in waters where maritime regulations apply, unless a marine bill of lading has been issued in accordance with the maritime law applicable, or the distance to be traveled in waters to which the maritime regulations apply is the greater. It appears that an inland waterway transport document issued subject to CMNI Convention (either in the form of a consignment note or a bill of lading) can be deemed to be a combined river/sea transport document, when it indicates a carriage over river and sea without transshipment.
Combined Air and Sea Transport Documents
Another example of transport documents covering at least two different modes of transport are those specifically designed by the forwarders to cover air/sea container traffic between Europe and Asia/Pacific Region via Dubai hub, typically titled “Combined Transport Document”.
The said Combined Transport Document is issued subject to the network liability system whereby the existing mandatory rules governing unimodal carriage will apply when the loss or damage to the goods occurs on that particular mode, e.g. if the container with the goods is lost or damaged during the carriage by air, the forwarder's liability will be determined in accordance with Warsaw Convention, while if the container is lost overboard during the sea carriage, the liability will be determined in accordance with Hague-/Hague-Visby Rules. Otherwise said, if the container with the goods is lost or damaged during the air carriage the Combined Transport Document shall be deemed to be an air waybill, while if that happen during the sea carriage the Combined Transport Document shall be deemed to be a Bill of Lading. A transport document for air-sea shipment must have an indication describing the modes of carriage used, e.g. AIR/SEA SHIPMENT: CARRIAGE BY AIR FROM ZURICH TO DUBAI, THEN BY SEA TO TAIWAN
Otherwise, where the transport document evidences only movement by air, all modes of carriage would be deemed to be by air and thus subject to the Warsaw/ Montreal Convention. Here is what the Warsaw Convention provides on this matter:
“Article 31 - Provisions relating to Combined Carriage
1. In the case of combined carriage performed partly by air and partly by any other mode of carriage, the provisions of this Convention apply only to the carriage by air, provided that the carriage by air falls within the terms of Article 1.”
The Montreal Convention has similar provisions in Article 38 — Combined Carriage. As regards the form and contents of combined air/sea transport document, the form is similar to an air waybill, except that includes boxes for Place of Delivery, for Place of Transshipment, indications that place of loading or destination may be either a port or airport and indication “not negotiable unlessconsigned to order” used on Bills of Lading.
Here is what the Warsaw Convention provides on this matter:
“Article 31 - Provisions relating to Combined Carriage
2. Nothing in this Convention shall prevent the parties in the case of combined carriage from inserting in the document of air carriage conditions relating to other modes of carriage, provided that the provisions of this Convention are observed as regards the carriage by air.”
The Montreal Convention has similar provisions in Article 38 — Combined Carriage.
Conclusion: The issue with art.19 of UCP 600 (Transport document covering at least two different modes of transport) is not what type of documents to ask for but to use proper wording in L/C. As I mentioned in my previous commentary, the multimodal transport document does not have bear one name or another but to fulfill the requirements set in art.19 of UCP 600. It may be that a Liner Bill of Lading or a CMR Consignment Note cover a multimodal transport shipment or it may be that the same document is used for unimodal carriage only. It all depends on the information shown on the transport document ….. and the wording of L/C. With the new CIM Consignment Note the job is easier as the form designed for combined transport is different from the form used solely for rail carriage.
It looks like the only type of unimodal transport document yet in use is the air waybill.