No account yet?
Notations and Multimodal Transport Documents  E-mail
Monday, 13 December 2010 18:22
In the autumn 2009 issue of DCInsight, Haluk Erdemol tackled on board notations as they apply to a B/L and
multimodal transport documents (multimodal bills of lading). This is perhaps the most controversial issue that has
emerged in  UCP  600 so far, and his article was an excellent contribution to the ongoing debate, which hopefully
will be  resolved  some  time soon. Here I would like to add some personal comments.
Bill of lading
First, it is unfortunate that this confusion took place, as it was, in my view,
clearly avoidable. It is a well-known fact that UCPpavel 500 article 23 provided clear guidance in saying: "If the bill of lading indicates a place of receipt or taking in charge different from the port of loading, the on board notation must also include the port of loading stipulated in the Credit and the name of the vessel on which goods have been loaded, even if they have been loaded on the vessel named in the bill of lading." Sub-article 23 (a) (iii) (a) of UCP 500 also clearly allowed a bill of lading to show a place of taking in charge different from the port of loading, and/or a place of final destination different from the port of discharge. ISBP 645 paragraph 82 further explained that if the Container Yard (CY) or Container Freight Station (CFS) is stated as the place of receipt, and that place is
the same as the stated port of loading, these places (place of receipt and the port of loading) would not be considered as different, and consequently the inclusion of the named vessel and port of loading in the on board notation would not be necessary. This clarification does not appear in the updated ISBP 681.
The intention behind these apparent changes (or omissions) in the UCP 600 and ISBP 681 has not been explained in a timely fashion to the banking community. Naturally, this led to confusion with some believing there was an intention to
treat the matter differently under the new UCP (why otherwise was there a change?); and others claiming that it was
only a change in the drafting style and not in the underlying rules for examination.
In its Commentary to UCP 600, the UCP Drafting Group explains that the reason for changes in the wording was "not to
encourage" the use of the "place of receipt" and "place of final destination" on bills of lading covering ocean transport.
But the requirement that the document checker must be able to determine that the bill of lading appears to indicate that
the shipped on board statement (by pre-printed wording or by a separate notation) relates to loading on board the
named vessel at the port of loading stated in the credit, and not to any pre-carriage of the goods between a place of receipt and the port of loading, remains the same as it has been under UCP 500.

pavel-pic
The Drafting Group's desire "not to encourage the use of the place of
receipt on bill of lading" is understandable. It seems pretty strange when
the credit requires only ocean transport from a port of loading to a port of
discharge, that the bill of lading should show the place of receipt at all. If
the place of receipt is the same as port of loading, and the only difference
is that the place of receipt is a CY or CFS, then it seems reasonable. In
most cases, containers are received by carriers at these places. The bill of lading is released to the shipper only when the goods are on board the
named vessel.
But if the place of receipt is very far from the port of loading, say at adistant inland place, then it is likely that the document is actually a multimodal transport document. Usually, the document itself makes this quite clear.
Pavel Andrle discusses technical LC
details with an eBSI consulting client.



For instance, if a document is entitled "Bill of Lading for Combined (Multimodal) Transport Shipment or Port to Port Shipment" and indicates that the "Place of Receipt" and/or "Place of Delivery" fields are to be filled in only in case the document is used as a combined (multimodal) transport document, should we accept a multimodal transport document in cases when the credit requires a bill of lading covering only a port-to-port transport?
It would be nice to receive "true ocean transport bills of lading
only" when a credit requires a bill of lading covering port-to-port
transport. However, in practice, especially in the case of landlocked exporters, shippers arrange the transport with one major carrier, which organizes both the land transport from the inland place to the port of loading and then transport from the port of loading to the port of discharge or even the final place of destination.
thomas-vin
Practice
It would be simple if the transport from the inland place of receipt to the port of loading were covered by one transport
document, say a road transport document, and the port-to-port transport (as requested by the credit) by an ocean bill
of lading. In such a case, the bill of lading would not show the place of receipt as the inland place at all
(why should it?). However, in practice the carrier issues only one transport document: a multimodal transport
document, since that is  what he is responsible for. He does not often understand why the shipper wants him to add a separate dated on board  notation with the named vessel and the port of loading and, in some cases, he does not
actually want to comply with  this specific request since, by doing so, he actually "converts" the multimodal transport document into a bill of lading.
Certainly we accept documents as compliant when the credit requests a bill of lading covering ocean transport only.
We do not concern ourselves too much with the pre-carriage (from the place of receipt to the port of loading), provided
it isevident that the goods were shipped on the named vessel at the port of loading. If the place of receipt differs from
the port of loading (see above) and the bill of lading shows also a pre-carriage means of conveyance (for instance a truck), an on board notation (shipment date, vessel name, port of loading) is necessary. It would be necessary even if
the pre-printed wording indicates "shipped on board." If the transport document expressly indicates that the "shipped
on board" statement relates to any truck, wagon or any other means of conveyance on which goods are shipped from
the place of receipt on the way to the port of loading, than the extended on board notation (showing shipment date,
vessel name, port of loading) would be also requested.
Do we, as bankers, accept a bill of lading showing a place of final destination different (not just CY or CFS) from the port of discharge? Under UCP 500 we clearly did; under UCP 600 we do as well, even without clear guidance in UCP 600 or ISBP 681. It may seem strange that we accept a transport document which shows that the goods will go to Prague when what we wanted was for the goods to be delivered only to the port of discharge, say, Hamburg. But we do.

Multimodal transport
Neither article 26 of UCP 500 nor article 19 of UCP 600 clearly state that apavel-lect
multimodal transport document must show that the goods were "shipped on
board" the named vessel in the port of loading if the transport begins by ocean transport from the port of loading stipulated in the credit (as the starting point of
the shipment). This issue was very problematic under UCP 500, which is why many  of us constantly raised the issue during the UCP revision process.
Sub-article 19 (a) (ii) of UCP 600 requires a multimodal transport document to:
"indicate that the goods have been dispatched, taken in charge or shipped on
board at the place stated in the credit". It is argued that if the multimodal transport starts with ocean transport (from the port of loading as requested in the credit), then it should show that the goods were shipped on board a named vessel at the port of loading stated in the credit. However, since UCP 600 does not clearly say so, one might argue that the multimodal transport document might just show that
the goods were dispatched or taken in charge in the port of loading.

pavel-compu
big-ship
green-marker
In the case of multimodal transport, delivery terms such as FCA, CPT or CIP should preferably be used, as these are a perfect match for the "goods being dispatched or taken in charge".
Many recent Banking Commission opinions made it clear that if the multimodal transport starts at the port of loading stated in the credit, the multimodal transport document must show that the goods have been shipped on board a named vessel at the port of loading stated therein. This may not be ideal, but provided this interpretation is clear and well communicated, it is acceptable.
If the applicant wants a multimodal transport document to show that the transport starts at the port of loading with goods being taken in charge only (as opposed to being shipped on a named vessel), he or she can do so by inserting a clear request in the credit. If the credit shows a port, e.g., Hamburg port, as the place of receipt, then in my view the multimodal transport document might well show that the goods have only been taken in charge in the Hamburg port.
It should be made perfectly clear that if the multimodal transport starts by ocean transport at the port of loading as stated in the credit, the requirements for the multimodal transport document in relation to "shipped on board at the place stated in the
credit" must be exactly the same as those for the bill of lading as set out in article 20. In other words, if the multimodal transport document shows a place of receipt different from the port of loading (see above) and also shows the pre-carriage means of conveyance, an on board notation is required (indicating the shipment date, name of the vessel and port of loading). If the multimodal transport document shows a qualification to the vessel as "intended", a separate dated on board notation with the name of the actual vessel is required. If the multimodal transport document shows a qualification of the port of
loading as "intended", a separate dated on board notation with the name of the actual vessel and port of loading is required.
ICC rules are rules of practice. Their goal must be to provide practitioners with clear guidelines to do their jobs. In this case, the clarity called for has, up to this point, been lacking.
Article originally published in DCInsight Vol. 16 No.1 January - March 2010 by Pavel Andrle. Pavel Andrle is an international trade finance consultant and trainer for eBSI Export Academy and Secretary of the Banking Commission of ICC Czech Republic. His e-mail is This e-mail address is being protected from spambots. You need JavaScript enabled to view it .



 

eBSI TradeBrief Sign-up

Sign up for our FREE newsletter now!

Testimonials

  • review8Working as a consultant on the road I thought it would be a good idea to undertake a professional course of study. The ITS Accreditation has exceeded my expectations. The eLearning Technology meant I could study in an engaging manner at a time and a pace that matched my busy schedule. The quality of learning elements brought to bear by the trade professionals working at the eBSI was a breath of fresh air after paper based correspondence courses. I have finished the programme but I am still hooked on participation in the online activities.

    usa Mark MacMonagle, Logistics Software Consultant, Precision Software, Chicago, USA
    ITS Graduate


     

  • testipopovI am really glad I have successfully completed the course. It was very useful for me indeed - the fact I was undergoing a western international trade course helped me to find a better job at an innovative IT company already in the process of study. The marketing and e-commerce modules provided me with the relevant guidance for my every day activities in the new position and the comments from the tutors have been very useful, too. And certainly I enjoyed the friendly and student-oriented atmosphere of the online school.

    <strong>belarus</strong> Igor Popov, Marketing Manager, Ispirer Systems Ltd., Minsk, Belarus
    ITS Graduate


     

  • review9I express my sincere thanks and appreciation for eBSI support during the ITS Accreditation. Substantial savings achieved at "Magna Donnelly" are a direct result of knowledge gained from the course. Recognition for the quality course content is acknowledged at corporate level in the US and Canada.

    China Systems Best project Award Winner

    ireland Tom Grace, Materials Planner, Magna Donnelly, Naas, Ireland.
    ITS Graduate


     

  • review10The ITS Accreditation Programme is a golden opportunity to learn about International Trade. Communicating with eBSI tutors and the possibility to share opinions and views with fellow students meant that I really enjoyed and benefited from the learning process.

    kyrgyzstan Olga Abikh, Trade Finance Officer, Kyrgyzstan
    ITS Graduate


     

  • The ITS Programme has been a fantastic training course. That time I didn’t need it for my work, however, it will be of an immense benefit for me in the future.  The online seminars and communications with tutors were very useful as well as the materials for studying. Thanks a lot for your great engagement and knowledge.
    switzerland Nadja Maricova, Winterthur, Switzerland
    nadja












  • I recommend eBSI and the work he has developed on the ITS program. I took the program about two years ago and it is a very well designed program which will give a sound knowledge on Export Market, E-commerce, Finance. It is very flexible and with a lot of support and a virtual campus where you can bring comments into it or enter the forum and read other users comments and discussions.
    It is a home-based program which you can follow on your own time.
    I really recommend the program to anybody interested in Export and the different issues around it.

    flags_of_United-Kingdom Accountant, Forensic Consultant, Fraud Examiner and Counter Fraud Specialist, UK

    Jaun



















  • <head> head>
    vbt “I enjoyed this international trade course very much. It helped my to be promoted in my job. eBSI Tutors were always in the right place, helping us all the time and giving updated materials. I want to thank you once again for being perfect teachers.
    <strong>georgia</strong>
    Lika Dzneladze, Head of Trade Finance Unit at JSC VTB Bank Georgia.












  • review11The online sessions proved very useful in communicating online with course lecturers and fellow students. I could cover the course material at my own pace and in my own time. I found the comprehensive materials contained in the CD ROMs of the ITS programme to contain a wealth of information for the would be exporter.

    Combilift Ltd - DHL Export Award Winner



    ireland Karina McAree, Marketing Specialist, Combilift, Co. Monaghan, Ireland
    ITS Graduate


     

  • think-tanks

    “Its been a real pleasure to receive the in International Trade Specialist Accreditation Programme. in the area of International Trade delivered by eBSI. I am extremely grateful to the entire team of eBSI for their constant support / guidance / help to make this possible for me.
    I would also like to extend my special gratitude to Thomas Smith for giving me this opportunity to be a an ITS through your respected institution. His encouragement guidance only allowed me to achieve this milestone. His course on E-Business and E-Commerce was very interesting and useful. It indeed opened my eyes to the lot of things. In addition I like the course materials and the online support structure which allows me to fit my learning in when it is convenient for me.
    The International Trade Specialist Accreditation Programme has given me the chance to learn and implement new skills in the area of International Trade and Finance as well as interesting components on Marketing and eBusiness. It was also very useful for me to communicate with highly experienced tutors and international trade specialists.”

    flags_of_Armenia Ashot Iskandaryan, Think Tanks Consultant and Contractor, Armenia






















  • testmilosdukatI am writing this feedback to thank to all team of eBSI for the work they do and to tell those interested in ITS Programme how beneficial it is not just to enlarge your professional knowledge but also to start a new business career. ITS course was my first step into the international trade world. After absolving that course and with my knowledge of languages I got a job as an export manager in Spain. What I highly appreciate on the ITS course is that you can get from this course what you really need either deep knowledge about certain area of International Trade thanks to the high qualified tutors or you can just obtain general knowledge about International Trade which will definitely help you in your further career.

    czechrepublic Milos Dukat, Export Manager, Marzal 2001 S.L., Santiago de Compostela-Spain
    ITS Graduate


     

Trade Resource Center Stats

  • Active Links: 2928
  • Pending Links: 0
  • Featured Links: 3
  • Total Links: 3608
  • Main Categories: 8
  • Sub-Categories: 241
JoomlaWatch Stats 1.2.9 by Matej Koval
Cart
Your Cart is currently empty.