We have received BL for negotiation under DC which was prepared on the letterhead (not blank back) of BL signing agent. It complies UCP requirements to sign a BL i.e. carrier, agent are identified, port of loading and port of discharge etc.
DC is calling for Bill of Lading and silent about accept / reject of freight forwarder BL. Please advise can we accept freight forwarder BL where DC does not prohibit or silent for submission of freight forwarder BL. Please also highlight if any operational risk to accept this type of BL.
Regards
Harsha
Mashreq
FTC-Overseas
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
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AsifMahmoodButt
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ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Hi!
first, you didn't write if l/c is subject to 500 or 600.
anyhow,you may search on dc-pro for TA572rev.it might help you.
regards,
bogdan
first, you didn't write if l/c is subject to 500 or 600.
anyhow,you may search on dc-pro for TA572rev.it might help you.
regards,
bogdan
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KimChristensen
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ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
If LC is subject to UCP 500 – then look to article 30; which says that a transport document issued by a freight forwarder is acceptable – as long as it is signed correct (carrier, agent, MMTO etc.)
If LC is subject to UCP 600 – then look to article 14(l) – which basically says that it need not be the owner of the means of transport issuing the transport document as long as the relevant transport article is complied with.
So the conclusion is that if LC is silent as to freight forwarders a freight forwarder is allowed to issue the transport document – as long as the signing etc. is in accordance with the relevant transport article (both for UCP 500 and UCP 600).
I usually refer to TA.572 when the LC says that “Freight forwarders B/L is NOT acceptable” – and to ISBP (2007) para 72 (MMTD), 95 (B/L), 138 (AWB) when the LC says that “transport document issued by a freight forwarder IS acceptable”.
As for the last part of your question – I am not sure I can provide a balanced view on the (limited) space available here
I know of an article on the subject being published within the coming weeks. When that one is out I will refer to it here.
Best regards
Kim
If LC is subject to UCP 600 – then look to article 14(l) – which basically says that it need not be the owner of the means of transport issuing the transport document as long as the relevant transport article is complied with.
So the conclusion is that if LC is silent as to freight forwarders a freight forwarder is allowed to issue the transport document – as long as the signing etc. is in accordance with the relevant transport article (both for UCP 500 and UCP 600).
I usually refer to TA.572 when the LC says that “Freight forwarders B/L is NOT acceptable” – and to ISBP (2007) para 72 (MMTD), 95 (B/L), 138 (AWB) when the LC says that “transport document issued by a freight forwarder IS acceptable”.
As for the last part of your question – I am not sure I can provide a balanced view on the (limited) space available here
I know of an article on the subject being published within the coming weeks. When that one is out I will refer to it here.
Best regards
Kim
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KimChristensen
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- Joined: Fri Apr 05, 2019 5:21 pm
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Dear all,
I promised to get back on this one – so here I am:
If you go to this page:
http://www.lcviews.com/sheilar_versus_kim.htm
and follow “Topic 4; Freight forwarders and NVOCC’s” – you will get some views as to the potential risk involved in “freight forwarders”.
Best regards
Kim
I promised to get back on this one – so here I am:
If you go to this page:
http://www.lcviews.com/sheilar_versus_kim.htm
and follow “Topic 4; Freight forwarders and NVOCC’s” – you will get some views as to the potential risk involved in “freight forwarders”.
Best regards
Kim
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
I think a recurring problem is the lack of a clear ‘definition’ for what is meant by a ‘freight forwarder’s bill of lading’ (or other transport document) in the world of documentary credits. My own view is that -in the context of UCP500 or 600 - a ‘freight forwarder’s bill of lading’ is one signed by a party as freight forwarder rather than carrier or agent of a carrier. Therefore, I do not consider a bill of lading signed by a party that seems to be a freight forwarder but states it is signing as carrier, or agent of a carrier, as being a ‘freight forwarder’s bill of lading’; this -per UCP500 or 600- is a ‘carrier’s bill of lading’. This seems to me the only logical approach given that both UCP500 and 600 are wholly unconcerned (quite rightly in my view) with whether the party signing as carrier or signing as the carrier’s agent seems also to be a freight forwarder. However, my impression is that -bizarrely- many do not see it this way.
It also seems to me applicants and bankers are incapable of drafting credits properly where they want to ensure that the carrier actually owns the ‘means of conveyance’ (to use UCP600 language), e.g. ship or plane. The only effective way I can think of is to require a certificate from the carrier to this effect but have yet to see such a Credit. I certainly cannot see that simply ‘excluding’ 600 13(l) or prohibiting ‘freight forwarder documents’ (the meaning of this term seemingly not having any settled meaning in Credit operations as discussed above) will definitely achieve this.
It also seems to me applicants and bankers are incapable of drafting credits properly where they want to ensure that the carrier actually owns the ‘means of conveyance’ (to use UCP600 language), e.g. ship or plane. The only effective way I can think of is to require a certificate from the carrier to this effect but have yet to see such a Credit. I certainly cannot see that simply ‘excluding’ 600 13(l) or prohibiting ‘freight forwarder documents’ (the meaning of this term seemingly not having any settled meaning in Credit operations as discussed above) will definitely achieve this.
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KimChristensen
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ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Dear Jeremy,
I do not want to fight you on this one – because to some extent you are of course absolutely right. I know exactly where you are coming from.
My very very personal view (and yes : It may well be bizarre) is that the perception that you express (admittedly based in current practices) is simply outdated – and desperately need a “brush up”
When you say “Therefore, I do not consider a bill of lading signed by a party that seems to be a freight forwarder but states it is signing as carrier, or agent of a carrier, as being a ‘freight forwarder’s bill of lading’” then this – quite frankly – sounds bizarre to me. Like saying: “Yes – a freight forwarder can sign as long as he is not a freight forwarder”
I will make two observations on this:
When a bank in an LC says that “Freight forwarders bill of lading is not acceptable” – then I find it very unlikely that the intention is that such clause should simply be disregarded (as is the consequence of ICC opinion TA.572.
At some pointing time – many years ago – it is correct that the original freight forwarder did not in any way act as “carrier” – but merely as intermediary between say exporters and shipping line.
Today this has changed dramatically – more often than not the freight forwarder assumes carrier responsibility. It is the rule rather than the exception.
I know that you will say that the banker do not care about such things – and again “you are absolutely right” – however my end goal in this world is that LC rules and practices fits like hand in glove into industry practices
So when I say this I am doing hard lobby work aiming at future revisions of ISBP and UCP 600
As for the last paragraph of you posting I fully agree with you. Taking into consideration the prevailing practice and perception on this – one should be much more precise in the LC.
Best regards
Kim
I do not want to fight you on this one – because to some extent you are of course absolutely right. I know exactly where you are coming from.
My very very personal view (and yes : It may well be bizarre) is that the perception that you express (admittedly based in current practices) is simply outdated – and desperately need a “brush up”
When you say “Therefore, I do not consider a bill of lading signed by a party that seems to be a freight forwarder but states it is signing as carrier, or agent of a carrier, as being a ‘freight forwarder’s bill of lading’” then this – quite frankly – sounds bizarre to me. Like saying: “Yes – a freight forwarder can sign as long as he is not a freight forwarder
”I will make two observations on this:
When a bank in an LC says that “Freight forwarders bill of lading is not acceptable” – then I find it very unlikely that the intention is that such clause should simply be disregarded (as is the consequence of ICC opinion TA.572.
At some pointing time – many years ago – it is correct that the original freight forwarder did not in any way act as “carrier” – but merely as intermediary between say exporters and shipping line.
Today this has changed dramatically – more often than not the freight forwarder assumes carrier responsibility. It is the rule rather than the exception.
I know that you will say that the banker do not care about such things – and again “you are absolutely right” – however my end goal in this world is that LC rules and practices fits like hand in glove into industry practices
So when I say this I am doing hard lobby work aiming at future revisions of ISBP and UCP 600
As for the last paragraph of you posting I fully agree with you. Taking into consideration the prevailing practice and perception on this – one should be much more precise in the LC.
Best regards
Kim
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Oh go on Kim, fight me. You know I enjoy a good punch up.
My position is simply that whatever the realities outside the documentary credit world, terminology used by bankers operating in it should reflect what the UCP does say, not what they think it should say or how it is used (differently) in other contexts. Therefore for a banker involved in the documentary credit world to use the term ‘freight forwarder’s bill of lading’ to mean other than one signed by a party as freight forwarder rather than carrier or agent of a carrier is completely unjustifiable.
I would also add that I am not saying that UCP500/600 say -in effect- that ‘a freight forwarder can sign as long as he is not a freight forwarder’, I am saying UCP500/600 say a party may sign as carrier (or agent of the carrier) that appears ALSO to carry out freight forwarding activities.
As for your end goal in this world, I just hope someone comes up with the gift of eternal life soon!
Yours in a spirit of peace and love, Jeremy
My position is simply that whatever the realities outside the documentary credit world, terminology used by bankers operating in it should reflect what the UCP does say, not what they think it should say or how it is used (differently) in other contexts. Therefore for a banker involved in the documentary credit world to use the term ‘freight forwarder’s bill of lading’ to mean other than one signed by a party as freight forwarder rather than carrier or agent of a carrier is completely unjustifiable.
I would also add that I am not saying that UCP500/600 say -in effect- that ‘a freight forwarder can sign as long as he is not a freight forwarder’, I am saying UCP500/600 say a party may sign as carrier (or agent of the carrier) that appears ALSO to carry out freight forwarding activities.
As for your end goal in this world, I just hope someone comes up with the gift of eternal life soon!
Yours in a spirit of peace and love, Jeremy
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
I am not sure I understand final conclusion of original question.
LC calls for BL and is silent about freight forwarders acceptable or not.
BL is presented indicating name of carrier and signed by a party as agent for or on behalf of the carrier.
However, the party signing as agent is actually a freight forwarder
Is it acceptable – does it comply?
Excuse me if I am incorrect but the discussions request clarification as to whether question is asked under UCP 500 or UCP 600.
In my mind the answer is the same in both cases.
Does it make a difference if the question is asked under UCP 500 or UCP 600?
LC calls for BL and is silent about freight forwarders acceptable or not.
BL is presented indicating name of carrier and signed by a party as agent for or on behalf of the carrier.
However, the party signing as agent is actually a freight forwarder
Is it acceptable – does it comply?
Excuse me if I am incorrect but the discussions request clarification as to whether question is asked under UCP 500 or UCP 600.
In my mind the answer is the same in both cases.
Does it make a difference if the question is asked under UCP 500 or UCP 600?
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Truly apologize for being accomplished in creating confusion.
So very short – and as precise as it is possible for me:
1) If the LC is silent as to “freight forwarders” it is ACCEPTABLE that a freight forwarder issues the required transport document – as long as the document complies with the relevant transport article (e.g. that it is signed as carrier or as agent for a named carrier).
2) No – it does not make a difference (in relation to this specific answer) whether the LC is issued subject to UCP 500 or UCP 600.
I hope this clarifies.
Best regards
Kim
So very short – and as precise as it is possible for me:
1) If the LC is silent as to “freight forwarders” it is ACCEPTABLE that a freight forwarder issues the required transport document – as long as the document complies with the relevant transport article (e.g. that it is signed as carrier or as agent for a named carrier).
2) No – it does not make a difference (in relation to this specific answer) whether the LC is issued subject to UCP 500 or UCP 600.
I hope this clarifies.
Best regards
Kim
ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT
Thank you for the reply which is helpful and I am glad to learn that my original understanding that the reference to whether it is UCP 500 or UCP 600 makes no difference to the answer.
And I agree, I would always have considered as acceptable under either set of rules a transport document such as a BL if signed by the Carrier or by a named agent for the carrier, even if that party is a freight forwarder unless LC prohibited in LC terms and conditions.
On the negative side, some people specially ones like myself who do not have English as a first (or even second language) find the logic of the language of UCP 600 Article 14 (l) quite difficult to follow.
Svetlana
[edited 9/17/2007 1:55:52 PM]
And I agree, I would always have considered as acceptable under either set of rules a transport document such as a BL if signed by the Carrier or by a named agent for the carrier, even if that party is a freight forwarder unless LC prohibited in LC terms and conditions.
On the negative side, some people specially ones like myself who do not have English as a first (or even second language) find the logic of the language of UCP 600 Article 14 (l) quite difficult to follow.
Svetlana
[edited 9/17/2007 1:55:52 PM]