ICC Digital Library Forum

As I do not want to add any more confusion on the topic “ACCEPTANCE OF FREIGHT FORWARDER BL WHEN DC SILENT” – I take the liberty to start a new one. The discussion obviously created some thoughts with me – and I feel that I want to share them with you.

I take outset in an LC that just landed on my desk today. The LC included the following clauses:

1:
“Transport documents issued by a freight forwarder or any party other than a carrier, owner or master not acceptable”

2:
“Transport documents showing title “as carrier” I/O “the carrier” or “carrier” not acceptable”

In addition I have an “old” clause at store that is relevant here:

3:
“Bills of lading issued by freight forwarder is not acceptable even if signed as a carrier or as an agent for the carrier”


Now; Clause “1” has a clear reference to UCP 600 sub-article 14(l) – read in context with clause “2” (from the same LC) – I would interpret this so that the bill of lading must be signed either by either:

Company XX
The Carrier

Or

Company XX
Carrier

However NOT “as carrier” (I am not sure that I understand why ??) – or for that matter “As agent for Company XX, carrier”.

So the question is how this fits into ICC Opinion TA.572?
Taking the current perception of freight forwarders into consideration my view would be that as long as the transport document is signed as mentioned above by “the carrier” or “carrier” – then it is acceptable – regardless if it is issued on a B/L form from FIATA, BIFA or other freight forwarders organization.

I wonder if that is the intention.

As for the clause “3” I consider this a clear reaction to TA.572: Regardless the function (carrier, agent etc) – it must NOT be issued by a freight forwarder – which I would guess would include the standard bill of lading form from FIATA. So at least the intention is to create a result different than the one from TA.572. As far as I can see – no prevailing practice exist here – but I would be reluctant to accept a document that in some way would include words like “forwarder” or “house”

I used to work at as a freight forwarder – and we would use different forms when issuing bills of lading; some being the traditional FBL’s – but others looking exactly like one issued by a shipping line – with no indication that it is in fact issued by a freight forwarding company.
The latter I once brought with me on a trip to the middle east – showing it to bankers there – that would include clause “3” in their LCs asking whether or not they would accept this one – under such LC. The answer was “yes”.

So my first point is just to focus on the obvious dilemma here; one thing is what happens in real life – a completely other thing is what the LC says – and how the document appear.
Based on that I think that banks that are concerned about freight forwarders – should revisit this area – and re-think what their concerns are; take the examples above:

Saying that transport documents issued by freight forwarders are not acceptable – or that UCP 600 sub-article 14(l) does not apply – have no consequence whatsoever – as the document will be accepted if signed by the carrier or an agent for the carrier – which is already reflected in the UCP 600 transport articles.

Using clause “3” above – will most likely change something – but will not really guard you against freight forwarders – as it is not a given fact that the freight forwarders will state on the document that he is in fact a freight forwarder.

My conclusion (yes I do have one) – is that whatever you want to achieve in this respect – must be included into the LC so that the document examiner knows how to examine the document.
So for example – I will echo Jeremy’s suggestion to ask for some kind of certificate from the carrier as to the ownership of the means of transport.
Another suggestion is to base the requirement in the LC on the contract of carriage – e.g. stating clearly in the LC who is to issue the transport document required.
Other possibilities exist – to me what is important is to make it operational under the LC regime.
In any case – using a phrase like “Freight forwarders B/L is not acceptable” is a waste to letters – and totally redundant

Here ends “Freight forwarders revisited” part one. Look out for part two …

Best regards
Kim Christensen

Kim,

I really wonder if we have to add three pages of additional conditions just to prohibit a document issued by a FF. -)
And by the way what are the whereabouts of a FF these days?
Daniel

Dear Daniel,

I guess that only few people would disagree with you on that. How much needs to be said in the LC depends on how you look at this:

If you regard the term “freight forwarder” as a function – which is not a carrier” or “agent for a named carrier” – then you need not write anything – and including a clause like “B/L issued by freight forwarder not acceptable” will not change anything.

If you (like me) regard the term “freight forwarder” as a type of company (like a bank, bakery or butcher) – then you really need to be specific to avoid a document issued by such “type” of company.

& where is the freight forwarder? Well my impression is that he is out there alive and kicking – but whenever there are LC bankers around, I think he does the best he can to wear a disguise; for some odd reason LC bankers are brought up to have build-in dislike towards the freight forwarder. I am not sure I understand why – perhaps someone can enlighten me?

Best regards
Kim

Kim,

Bankers have taken a dislike towards FF because (as it is demonstrated in this forum) they do not know where they stand with them. To make things even more difficult a new query (470/TA.638) try to tell us who is the issuer of a B/L. I wonder if te conclusion is right. I will also add that I do not see the difference between signing "as carrier" and "the carrier".
Daniel

Dear Daniel,

I do agree with you.

However; I see TA.638 as the logic consequence of ISBP (2007) paragraph 72, 95, 138, ICC Opinion TA.572 – as well as the somewhat controversial TA.621.

So I have the same view on TA.638 – as I did on TA.621:
My logic tells me that something is wrong here – but following the prevailing practice – the conclusion is the only one possible.

Best regards
Kim

Kim,
What is wrong is maybe the fact that we are splitting hair. The issue is: how to render effective a condition in a credit prohibiting the presentation of a FF transport document if the applicant or the issuing bank does not want to deal with a FF. Solution suggested by Jeremy (I think): a certificate. These days and as things are, I cannot think of another one without (as in your example) overburdening the credit.
As for TA. 638, what annoys me is the fact that it has been decided that the carrier and not the agent is the issuer. It may be so and makes sense but I would like to know on what grounds.
Daniel

Daniel,

Just a small comment for clarification: My suggestion need not overburden the LC with text. I see many LCs appointing the issuer of the transport document;

Like:
“XX line [company] ocean bill of lading issued by XX transport [company] to the order of shipper notify applicant marked freight collect”.

Best regards
Kim

Kim,
Allow me to go a bit further on.
In your latest example, How do you interpret "issued"
Daniel

In light of TA.638, I mean

Dear Daniel,

You are welcome to go as far as you want to

I would not start hard arguments based on a “not yet approved ICC Opinion”.
So at this point in time I would interpret “issuer” based on ISBP (2007) paragraph 22.

Best regards
Kim