by Bob Ronai

T.O. Lee in his article "Forwarder's bill of lading: the role of the document checker" (DCInsight July-September 2011) has unfortunately added to the problem rather than helping it. His definitions of the types of bills of lading are somewhat off the mark and do nothing to assist document checkers in their task. Here is my explanation of the various terms and situations:

Shipping line

While UCP 600 does not use this term for good reason, using instead the expression "carrier" in container transport by sea, this expression is generally assumed to refer to carriers that carry their own (and leased) containers on vessels owned or operated by them, or on vessels owned or operated by other members of a consortium offering a sharing of each others' vessels to provide a more frequent/regular service. So a bill of lading (B/L) issued by one of the above might be called a "shipping line" bill of lading.

However a "shipping line B/L" has no meaning in UCP 600 nor in ISBP 681. Despite Mr Lee's assertion, it is not the quality or calibre of the issuer, but how it is signed, that defines the nature of the B/L.

Forwarder's B/L

In his article, T.O. Lee said that "a forwarder's bill of lading (FBL) is 'issued' by a forwarder (usually showing a forwarder's letterhead, incorporating terms and conditions of carriage of the forwarder) and 'signed' by the same forwarder, that also provides the ship for sea carriage as the actual carrier." Note, however, that UCP 600 dropped reference to these, as they are exceedingly rare in practice these days, if not entirely extinct. They were transport documents which the forwarder issued but did not take on the responsibilities of being a carrier.

Master B/L

Mr Lee defines a master B/L as "one in which the forwarder 'issues' (using the forwarder's own letterhead) and 'signs' (as agent of the shipping line that provides the ship for sea transport) the MBL."

However, in my long years of experience it is not the forwarder who issues the master B/L, but the "shipping line". When a forwarder places cargo with a shipping line but wishes to issue its own "house B/L" (more about this soon), it obtains from the line a B/L showing the forwarder as shipper and the forwarder's office or agent at the destination as the consignee. To the shipping line these forwarders are merely merchants, just as if the actual seller and buyer had been named on the B/L. The forwarder might have multiple shipments for multiple clients on the same vessel from the one port of loading to the one port of discharge, and so can negotiate a better freight rate.

By being shown as the shipper, the forwarder establishes a good trading history with the shipping line and can use that to negotiate better rates in the future. This master B/L evidences the contract of carriage between the forwarder and the shipping line. In Australia, freight forwarders will often call these bills of lading "ocean B/Ls", a misnomer which arose many years ago from a misunderstanding of previous UCPs where there were "ocean or marine" B/Ls and "forwarders" B/Ls.

House B/L

The forwarder issues its own B/L to the shipper for a variety of reasons. As stated above, this could be to gain kudos and a good trading history with the line; it could be because the forwarder is amenable to including details on its B/L which the line is not (especially due to badly-worded L/Cs); or even when the forwarder has undertaken inland transport responsibilities before and/or after the sea voyage to arrange availability of the container at the destination place such as in DAP or DDP (Incoterms 2010) transactions. This house B/L evidences the contract of carriage between the shipper or consignee (depending on the Incoterm used) and the forwarder.

However, if a house B/L is correctly signed by the forwarder acting "as the carrier", or "as agent for the carrier" in cases where the forwarder operates a separate entity as a non-vessel operating common carrier (NVOCC), then it is indeed signed correctly as a B/L in accordance with UCP 600 sub-article 20 (a) (i).

It is important to realize that some forwarders are of the mistaken belief, again from a misunderstanding of UCP or bad advice given over the years by bankers misunderstanding the role of the forwarder, that when they issue their own house B/L, they should sign it "as agent for the carrier", then nominate as the carrier the shipping line that issued the master B/L to the forwarder. Clearly, they cannot operate in that capacity, and the terms and conditions on the reverse of the house B/L would be unknown to, and not approved by, the shipping line that would remain blissfully unaware of being named in that house B/L.

It is also important to understand that, despite Mr Lee's assertion, house B/Ls are issued every day and everywhere for full container load (FCL) shipments, not just for less than container load (LCL) shipments.

Consolidator or groupage operator, etc.

Most forwarders are not large enough to offer groupage consolidations (i.e., grouping of various shippers' cargoes into one container) of their own on a regular basis to specific destinations. Therefore, they utilize the services of consolidators that are, in effect, wholesale forwarders, accumulating a number of small cargoes from various forwarders for a particular destination.

Here we enter interesting territory. The consolidator obtains from the shipping line a master B/L showing the consolidator as shipper and its agent at destination as consignee. The consolidator then issues its own house B/L for each cargo.

If a forwarder has a number of small cargoes from different shippers, or from one shipper to different consignees at the other end (or even to hide the identity of the consolidator and shipper or consignee from each other if the consolidator also operates as a forwarder), it may well desire to issue its own house B/Ls for each. This means that the consolidator's house B/L shows the forwarder and its agent as shipper and consignee, and this house B/L now acts as a master B/L to the forwarder. Often, the actual shipper and consignee will have no idea who their forwarder used to consolidate the cargo.

What does UCP 600 say?

UCP 600 says very little about this. All that document checker should be concerned with is whether the B/L of whatever type described above is signed correctly by the named carrier or a named agent for and on behalf of the named carrier. UCP 600 sub-article 14 (a) is clear that the document checker must examine a presentation "on the basis of the documents alone whether or not the documents appear on their face to constitute a complying presentation". Clearly, contrary to what T.O. Lee says, there is no scope, and nor should there be, for a document checker to make assumptions and draw conclusions, whether well-founded or not, about the financial standing, size or reputation of the issuer of a B/L.

My own view is that Mr Lee's article has done little if anything to correctly increase the understanding of document checkers and has possibly led them down a path they should not be treading.

Bob Ronai is the owner of Import-Export Services Pty Ltd in Sydney Australia, specializing in preparing export documentation for clients. He has some 45 years of experience of working with L/Cs and is a member of both the Banking Technique and Practices Committee and Incoterms Committee of ICC Australia. His e-mail is