Isn't the truck consignment note a transport document?

DimitriScoufaridis · Post by **DimitriScoufaridis** » Tue Jul 09, 2002 1:00 am

Laurence,
In reference to your first posting, I agree with you. The trade term should have been CIP although full reference to Incoterms was not made in the credit. The term was subsequently amended to C&F (not CPT). FYI, it is a market practice here in Saudi to make simple reference to such trade terms without appending the words “Incoterms 2000” which are acceptable to international sellers; moreover, older trade terms like C&F are surprisingly still in use without any noticeable problems! The customer & staff education is an ongoing process.

Air and road shipments in LC’s are booked by the local banks under clean risk (without control of merchandise) credit lines since it is understood that both AWB’s and TCN’s are not title documents. However, to use your words in the said article “the normal practice” is to see that such documents are consigned to the issuing banks. FYI, the carrier’s declaration was requested by the applicant.

Jeremy/T.O. Lee
Thanks for your contribution. As mentioned in my earlier posting, the issuing bank wanted a transport document as evidenced by the shipment terms and contents of the document. This is also supported by the fact that before amending the trade term, there was an insurance requirement (land transit clauses) which meant to cover the road shipment.

Dimitri

larryBacon · Post by **larryBacon** » Wed Jul 10, 2002 1:00 am

Jeremy,

if, as you say, the DC indicates which of the Transport Articles form a basis for examination of the Transport Document, this simplifies matters for the document checker. However, life is not always so simple. You may have come across B/Ls with wording such as "may be used as Combined Transport or Marine B/L". You may also have come across DCs where the Transport Document is only described as B/L and other details in the DC do not confine this to a specific Article. Do you think that a "limited knowledge" will be sufficient to deal with such situations ?

Laurence

larryBacon · Post by **larryBacon** » Wed Jul 10, 2002 1:00 am

Dimitri,

the applicant may have requested the carrier's declaration, but this indicates his lack of knowledge on the subject. If we were to take Jeremy's approach, the issuing bank would be no wiser and agree to include this clause without indicating to the applicant the folly in this. The same holds true for the Advising, Nominated bank etc.

In my frequent lectures, I sometimes speak to students comparing non-Incoterms to insurance. What is the connection ? I will leave the question open to answers for a few days, but I expect the answer to come from those with more than a "limited knowledge" of the subject.

Laurence

larryBacon · Post by **larryBacon** » Wed Jul 10, 2002 1:00 am

T. O.

my previous posting to you was poking fun at your misspelling of folk instead of fork (your posting of 7/08/02 4:39), but you do not seem to have gotten the joke.

Laurence

LeoCullen · Post by **LeoCullen** » Wed Jul 10, 2002 1:00 am

Laurence,

I am unsure of one of the points that you raised in a previous post where you say:

You may have come across B/Ls with wording such as "may be used as Combined Transport or Marine B/L".

Your answer to the following question may make your thinking more clear to me.

If the documents required section of a credit shows:

"Bill of lading consigned to order of shipper marked freight paid"

But the document presented indicates:

"may be used as Combined Transport or Marine B/L"

Which transport article would you use to check the document(s)?

[edited 7/10/02 10:18:04 AM]

NigelHolt · Post by **NigelHolt** » Wed Jul 10, 2002 1:00 am

T.O.,

I do not think it is a question of softening my line, but rather a question of the previous interpretation put on my words. My line has always been (or intended to be) that a credit banker does not require SPECIALIST non-banking knowledge, just sufficient to determine facial (non-) compliance in accordance with sub-Article 13a. Anyway, I’m glad any misunderstanding has apparently been resolved.

Dmitri,

While I have no doubt on the correct interpretation of ‘rcn’, nonethless it is the case that use of UCP consistent terminology, in this case ‘road transport document’, puts the matter beyond any possible dispute. A lesson here for the issuing bank.

Laurence,

Yes I do, as to me the question, in this situation, simply is: ‘Does the credit call for a transport document covering at least two different modes of transport?’. If the credit does, Article 26 applies (irrespective of the document presented). If the credit does not, Article 23 applies (irrespective of the document presented).

If the credit is unclear, it should not have been issued or advised. If, nonetheless, it is then the banks that must decide (as opposed to have the option of deciding) compliance have brought this difficulty upon themselves and they will have to resolve the problem as best they can.

Jeremy

larryBacon · Post by **larryBacon** » Wed Jul 10, 2002 1:00 am

Leo,

some Bs/L are preprinted stating that they may be used for one of two purposes - marine or multimodal B/L. It is only by further examination and a knowledge of the specific requirements that one can ascertain which of the two applies in an individual case.
Some DCs do not indicate whether the intention is application of Article 23, 25, 26 etc when naming a "Document Required" as simply B/L. I hope this clarifies matters for you.

Laurence

larryBacon · Post by **larryBacon** » Wed Jul 10, 2002 1:00 am

Jeremy,

in your last posting to Dimitri, you speak of a lesson for the issuing bank, and your posting to me speaks of the banks bringing problems upon themselves. Do you think that these issues could best be resolved by better training on issues such as transport documents within the banks and if so, should the trainer be a banker with "limited knowledge" or a specialist in the area ?

Laurence

NigelHolt · Post by **NigelHolt** » Wed Jul 10, 2002 1:00 am

Laurence,

I can see you’re not going to give up on this one. I think the ‘mot juste’ is ‘tenacious’.

Yes I do think the issue of unclear, ambiguous and contradictory credit provisions could be resolved by better training, but to me the problem lies in banks having a less than full understanding of credit principles and the provisions of UCP500, rather than in a lack of knowledge of transport or other documents. Therefore, I would regard a trainer (as I was, within the Bank, for a decade or so) in the field as requiring a wide knowledge of credit matters and only a limited knowledge of transport or other documents.

Jeremy

LeoCullen · Post by **LeoCullen** » Wed Jul 10, 2002 1:00 am

Thank you Laurence.

I am still in the dark about which article you would apply.

It may help to change the question slightly -

Credit requires:
"Bill of lading consigned to order of shipper marked freight paid"
(no further terms and conditions affecting the type of transport document required)

A combined transport bill of lading indicating multimodal transport is presented.

So the question is - should article 23 or 26 be applied to the document?

My view is that article 23 should be applied in such a situation.