Transport Documents – Banking Digits

UCP600 Article 14 Explanation – CDCS Guide: Standards for Examination of Documents

August 4, 2024 by Saikat Majhi

Clause (a)

Clause: A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank must examine a presentation to determine, on the basis of the documents alone, whether or not the documents appear on their face to constitute a complying presentation.

Explanation: Banks must evaluate the presented documents strictly based on their content to ensure they comply with the terms and conditions of the credit. The examination is limited to the documents alone without considering external factors.

Example: If an issuing bank receives a set of documents that includes an invoice, bill of lading, and certificate of origin, it must check if these documents fulfill the requirements of the letter of credit. The bank cannot rely on external information or assumptions.

Clause (b)

Clause: A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank shall each have a maximum of five banking days following the day of presentation to determine if a presentation is complying. This period is not curtailed or otherwise affected by the occurrence on or after the date of presentation of any expiry date or last day for presentation.

Explanation: Each Banks have up to five banking days from the date of presentation to decide if the documents comply with the credit terms. This review period is not shortened by the credit’s expiry date or any other deadlines that occur after the presentation date. Counting of 5 banking day starts from the next banking day of presentation.

Example: If documents are presented to a bank on July 1st, the bank has until the close of business on July 8th (assuming no holidays or weekends) to complete its examination, regardless of whether the credit expires on July 2nd.

Clause (c)

Clause: A presentation including one or more original transport documents subject to articles 19, 20, 21, 22, 23, 24 or 25 must be made by or on behalf of the beneficiary not later than 21 calendar days after the date of shipment as described in these rules, but in any event not later than the expiry date of the credit.

Explanation: When a presentation includes original transport documents, it must be made within 21 calendar days after the shipment date, but also not beyond the credit’s expiry date.

Example: If goods are shipped on July 1st, the latest date for presenting the documents, including the bill of lading, is July 22nd, provided the credit does not expire before this date.

Clause (d)

Clause: Data in a document, when read in context with the credit, the document itself and international standard banking practice, need not be identical to, but must not conflict with, data in that document, any other stipulated document or the credit.

Explanation: Data in the documents does not have to match exactly but should not contradict the data in other documents or the credit terms.

Example: If the credit states “blue shirts” and the invoice describes the goods as “navy blue shirts,” this is acceptable as long as there is no contradiction in other documents. However, if invoice describes as “navy blue shirts” but in certificate of origin goods description is mentioned as “green shirts” then it will be a discrepancy.

Clause (e)

Clause: In documents other than the commercial invoice, the description of the goods, services or performance, if stated, may be in general terms not conflicting with their description in the credit.

Explanation: Descriptions of goods or services in documents other than the commercial invoice can be general, provided they do not conflict with the credit’s description.

Example: If the credit specifies “100% cotton shirts,” the packing list can describe the goods as “cotton shirts” or “shirts”.

Clause (f)

Clause: If a credit requires presentation of a document other than a transport document, insurance document or commercial invoice, without stipulating by whom the document is to be issued or its data content, banks will accept the document as presented if its content appears to fulfil the function of the required document and otherwise complies with sub-article 14 (d).

Explanation: If the credit does not specify the issuer or data content of a required document, banks will accept the document as long as it fulfills its intended function and does not conflict with sub-article 14(d).

Example: If a credit requires a “certificate of inspection” without specifying who should issue it, a certificate issued by any party will be accepted if it serves the inspection function and does not conflict with other documents.

Clause (g)

Clause: A document presented but not required by the credit will be disregarded and may be returned to the presenter.

Explanation: Any documents that are not required by the credit terms will be ignored and can be returned to the presenter.

Example: If a beneficiary submits an additional certificate of quality that is not stipulated in the credit, the bank will disregard it.

Clause (h)

Clause: If a credit contains a condition without stipulating the document to indicate compliance with the condition, banks will deem such condition as not stated and will disregard it.

Explanation: Conditions in the credit that do not specify which document should show compliance are treated as if they do not exist.

Example: If a credit states that “shipment must be made on a vessel under 10 years old” but does not specify that this must be stated on the bill of lading or any other document, the bank will disregard this condition.

Clause (i)

Clause: A document may be dated prior to the issuance date of the credit, but must not be dated later than its date of presentation.

Explanation: Documents can have dates earlier than the credit issuance date but cannot be dated after the presentation date.

Example: A bill of lading dated June 1st is acceptable for a credit issued on June 10th. Next scenario, A bill of lading dated 12th June and document presented on 11th June will be discrepant.

Clause (j)

Clause: When the addresses of the beneficiary and the applicant appear in any stipulated document, they need not be the same as those stated in the credit or in any other stipulated document, but must be within the same country as the respective addresses mentioned in the credit. Contact details (telefax, telephone, email and the like) stated as part of the beneficiary’s and the applicant’s address will be disregarded. However, when the address and contact details of the applicant appear as part of the consignee or notify party details on a transport document subject to articles 19, 20, 21, 22, 23, 24 or 25, they must be as stated in the credit.

Explanation: Addresses in documents other than transport documents can differ from those in the credit as long as they are within the same country. Contact details like phone numbers and emails are ignored unless they are part of consignee or notify party details in transport documents.

Example: If the credit specifies the applicant’s address as “123 Main St, New York,” and an invoice states “456 Elm St, New York,” it is acceptable as both addresses are in the same country. Next scenario, if the credit specifies the consignee address as “123 Main St, New York,” and bill of lading states consignee address as “456 Elm St, New York,” it is Discrepant.

Clause (k)

Clause: The shipper or consignor of the goods indicated on any document need not be the beneficiary of the credit.

Explanation: The shipper or consignor mentioned in any document does not have to be the beneficiary.

Example: If a beneficiary is “ABC Enterprise” as per LC, but the bill of lading shows the shipper as a “XYZ Enterprise”, this is acceptable.

Clause (l)

Clause: A transport document may be issued by any party other than a carrier, owner, master or charterer provided that the transport document meets the requirements of articles 19, 20, 21, 22, 23 or 24 of these rules.

Explanation: Transport documents can be issued by parties other than the carrier, owner, master, or charterer as long as they comply with the relevant UCP600 articles.

Example: An agent of the carrier issues a bill of lading, which is acceptable as long as it meets the criteria set out in articles 19-24 of UCP600. Check out explanations on these articles, how agent can sign a transport documents and how capacity to be mentioned.

UCP600 Article 31 Explanation: Partial Drawings or Shipments

July 25, 2024 by Saikat Majhi

Partial Drawings or Shipments

Clause (a): Partial drawings or shipments are allowed.

Explanation: This clause means that under a letter of credit, shipments can be made in parts. There is no requirement for the entire shipment to be made in one go. Each part of the shipment can be drawn upon separately, and the exporter can present documents for each partial shipment to claim payment.

Example: An exporter has a letter of credit for $100,000 to be shipped to a buyer. The exporter sends $40,000 worth of goods in the first shipment and $60,000 worth in the second. The exporter can present the documents for the $40,000 shipment, get paid for it, and later present the documents for the $60,000 shipment to get paid for the remaining amount.

Clause (b): A presentation consisting of more than one set of transport documents evidencing shipment commencing on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering a partial shipment, even if they indicate different dates of shipment or different ports of loading, places of taking in charge or dispatch. If the presentation consists of more than one set of transport documents, the latest date of shipment as evidenced on any of the sets of transport documents will be regarded as the date of shipment.

Explanation: If multiple sets of transport documents are presented for shipments that start on the same means of transport and are headed to the same destination, it will not be considered as partial shipments. This holds true even if the documents indicate different shipment dates, different ports of loading, or places of taking charge. The latest shipment date on any of the transport documents will be considered as the shipment date.

Example: An exporter ships goods using the same vessel but loads goods at different ports on different dates. The vessel then proceeds to the same destination. The exporter presents multiple sets of bills of lading indicating these different loading ports and dates. Since all the goods are on the same vessel going to the same destination, it is not considered a partial shipment. The latest date on the bills of lading will be the official shipment date.

Clause (b) continued: A presentation consisting of one or more sets of transport documents evidencing shipment on more than one means of conveyance within the same mode of transport will be regarded as covering a partial shipment, even if the means of conveyance leave on the same day for the same destination.

Explanation: If the shipment is made using multiple means of transport within the same mode (e.g., multiple trucks, ships, or planes), even if they leave on the same day for the same destination, it will be considered a partial shipment.

Example: An exporter sends goods using two different ships departing on the same day to the same destination. Each ship carries part of the total consignment. Since the shipment is on different vessels, it is considered a partial shipment even though they are headed to the same place on the same day.

Clause (c): A presentation consisting of more than one courier receipt, post receipt or certificate of posting will not be regarded as a partial shipment if the courier receipts, post receipts or certificates of posting appear to have been stamped or signed by the same courier or postal service at the same place and date and for the same destination.

Explanation: Multiple courier or postal receipts indicating shipments from the same service, stamped or signed at the same place and date for the same destination, will not be considered partial shipments. This implies that the entire consignment is viewed as a single shipment, despite being sent in separate packages.

Example: An exporter sends goods in three different packages using the same courier service. All packages are stamped at the same location and on the same date, and all are addressed to the same destination. Although there are three receipts, it will not be considered a partial shipment since all receipts show the same courier service, place, date, and destination.

UCP600 Article 26: On Deck, Shipper’s Load and Count, and Additional Charge

July 25, 2024 by Saikat Majhi

Article 26: “On Deck”, “Shipper’s Load and Count”, “Said by Shipper to Contain” and Charges Additional to Freight

Clause (a): On Deck

Explanation: A transport document must not indicate that the goods are or will be loaded on deck. However, a clause stating that the goods may be loaded on deck is acceptable. This distinction is important because it affects the security and condition of the cargo during transit. Goods loaded on deck are exposed to weather conditions and have a higher risk of damage.

Example:

Not Acceptable: A Bill of Lading (B/L) with the clause “Goods are loaded on deck” will be rejected under UCP600 because it clearly states that the goods are placed on deck.
Acceptable: A B/L with the clause “Goods may be loaded on deck” is acceptable. This implies a possibility without confirmation, thus complying with UCP600 requirements.

Clause (b): Shipper’s Load and Count / Said by Shipper to Contain

Explanation: A transport document bearing clauses such as “shipper’s load and count” and “said by shipper to contain” is acceptable. These phrases indicate that the details regarding the cargo’s quantity and contents are provided by the shipper and have not been verified by the carrier.

Example:

Shipper’s Load and Count: A B/L states, “Goods loaded and counted by shipper.” This means the carrier has not verified the number of packages or their condition; this responsibility lies with the shipper.
Said by Shipper to Contain: A B/L with the clause “Said by shipper to contain 100 cartons of electronics” indicates that the carrier relies on the shipper’s declaration regarding the contents of the shipment.

Clause (c): Charges Additional to Freight

Explanation: A transport document may bear a reference, by stamp or otherwise, to charges additional to the freight. This clause means that the document can mention extra costs that are not included in the freight charges, such as handling fees, customs duties, or insurance.

Example: A B/L includes a stamped note, “Additional charges: $200 for customs clearance and $150 for insurance.” This indicates that these costs are separate from the freight charges and must be borne by the shipper or consignee as specified.

UCP600 Article 25: Courier Receipt, Post Receipt, and Certificate of Posting Explained with Examples

July 25, 2024 by Saikat Majhi

UCP600 Article 25 provides guidelines for courier receipts, post receipts, or certificates of posting. Here’s a breakdown of each clause with examples for clarity:

Clause (a) Courier Receipt

i. Courier Service Identification

Text: “A courier receipt, however named, evidencing receipt of goods for transport, must appear to: i. indicate the name of the courier service and be stamped or signed by the named courier service at the place from which the credit states the goods are to be shipped.”

Explanation: The courier receipt must:

Show the name of the courier service.
Be stamped or signed by the courier service at the specified shipping location.

Example: If a letter of credit (L/C) specifies that goods must be shipped from New York, the courier receipt should indicate a courier service like “DHL” and bear a stamp or signature from DHL’s New York office.

Illustration: A courier receipt from DHL, with the company’s logo, the name “DHL,” and a stamp from their New York office, along with a signature of an authorized personnel.

ii. Date of Pick-Up or Receipt

Text: “ii. indicate a date of pick-up or of receipt or wording to this effect. This date will be deemed to be the date of shipment.”

Explanation: The receipt must show:

The date when the goods were picked up or received.
This date will be considered the shipment date.

Example: If the receipt states that the goods were picked up on “March 1, 2024,” then March 1, 2024, is recognized as the shipment date.

Illustration: A DHL receipt showing: “Picked up on: March 1, 2024.”

Clause (b) Courier Charges

Text: “A requirement that courier charges are to be paid or prepaid may be satisfied by a transport document issued by a courier service evidencing that courier charges are for the account of a party other than the consignee.”

Explanation: If the L/C states that courier charges must be paid or prepaid, this can be shown on the transport document by indicating that these charges are billed to someone other than the consignee.

Example: If the L/C specifies that courier charges must be prepaid, and the courier receipt indicates that “Courier charges billed to the shipper,” this satisfies the requirement.

Illustration: A transport document stating: “Courier charges: Billed to the shipper.”

Clause (c) Post Receipt or Certificate of Posting

Text: “A post receipt or certificate of posting, however named, evidencing receipt of goods for transport, must appear to be stamped or signed and dated at the place from which the credit states the goods are to be shipped. This date will be deemed to be the date of shipment.”

Explanation: A post receipt or certificate of posting must:

Be stamped or signed.
Show a date.
Be issued from the specified shipping location.

The date on this receipt will be considered the shipment date.

Example: If an L/C requires shipment from Tokyo, a certificate of posting from Japan Post must have a stamp or signature and a date from Tokyo.

Illustration: A Japan Post certificate showing a Tokyo office stamp, dated “April 10, 2024,” with a signature.

Summary

Clause (a): Courier receipts must name and be stamped or signed by the courier service at the specified location, and show the pick-up or receipt date.
Clause (b): Courier charges can be shown as paid by someone other than the consignee on the transport document.
Clause (c): Post receipts or certificates of posting must be stamped or signed and dated at the specified location, with the date considered as the shipment date.

Bill of Lading vs Airway Bill vs Lorry Receipt vs Courier Receipt: Comprehensive Guide to Transport Documents

July 14, 2024 by Saikat Majhi

Transport documents play a crucial role in the global trade landscape. They serve as a contract of carriage, a receipt of goods, and sometimes, a document of title. Understanding the differences between a Bill of Lading (BOL), an Airway Bill (AWB), a Lorry Receipt (LR), and a Courier Receipt (CR) is vital for businesses involved in shipping goods domestically and internationally. This article delves into the definitions, uses, negotiability, and tracking methods of each transport document and provides a comprehensive table to highlight their differences.

Bill of Lading

Definition: A Bill of Lading (BOL) is a document issued by a carrier to a shipper, acknowledging the receipt of goods for shipment. It serves as a contract between the carrier and the shipper and provides details about the type, quantity, and destination of the goods being transported.

Uses:

Sea Freight: BOLs are primarily used in maritime shipping.
Documentation: It serves as a receipt of goods and a contract of carriage.
Title of Goods: It can act as a document of title, which can be negotiable or non-negotiable, allowing the transfer of ownership of the goods.

Negotiable Instrument: A Bill of Lading can be a negotiable instrument, meaning it can be transferred to another party, typically through endorsement. This allows the holder of the BOL to claim the goods upon arrival at the destination port.

Tracking: To track a Bill of Lading, you typically use the tracking number provided by the shipping company. This number can be entered into the carrier’s online tracking system, providing updates on the shipment’s status and location.

Airway Bill

Definition: An Airway Bill (AWB) is a document issued by an airline to acknowledge receipt of cargo for shipment by air. It details the shipment’s contents, destination, and consignee information.

Uses:

Air Freight: AWBs are exclusively used for air cargo.
Contract of Carriage: It serves as a contract between the shipper and the airline.
Receipt of Goods: It confirms the receipt of the goods by the carrier.

Negotiable Instrument: An Airway Bill is typically a non-negotiable instrument. This means it cannot be transferred to another party to claim the goods. The consignee named on the AWB is the only party authorized to receive the goods.

Tracking: Airway Bills can be tracked using the unique AWB number. Airlines and freight forwarders provide online tracking systems where this number can be entered to check the status of the shipment.

Lorry Receipt

Definition: A Lorry Receipt (LR) is a document issued by a road transport carrier to acknowledge the receipt of goods for transport by truck or lorry. It includes details about the goods, the origin, and the destination.

Uses:

Road Freight: LRs are used in domestic or regional transportation of goods by road.
Proof of Delivery: It serves as proof that the goods were handed over to the carrier for transport.
Receipt of Goods: Confirms the receipt of goods by the carrier.

Negotiable Instrument: A Lorry Receipt is generally a non-negotiable document. It does not transfer ownership and is primarily used for tracking and confirmation purposes.

Tracking: Tracking a Lorry Receipt can be done using the receipt number provided by the transport company. Many logistics companies offer online tracking systems to monitor the progress of the shipment.

Courier Receipt

Definition: A Courier Receipt (CR) is a document provided by a courier company to acknowledge the receipt of a parcel or package for delivery. It contains details about the sender, recipient, and contents of the package.

Uses:

Courier Services: CRs are used in the delivery of parcels and documents through courier services.
Proof of Shipment: Acts as proof that the package has been handed over to the courier.
Delivery Confirmation: It confirms the delivery of the package to the recipient.

Negotiable Instrument: A Courier Receipt is non-negotiable. It is used solely to track and confirm the delivery of packages and does not transfer ownership rights.

Tracking: Courier Receipts can be tracked using the tracking number provided by the courier service. This number can be entered into the courier company’s website or tracking system to get real-time updates on the delivery status.

Differences at a Glance

The following table highlights the differences between a Bill of Lading, Airway Bill, Lorry Receipt, and Courier Receipt for easy understanding:

Feature	Bill of Lading	Airway Bill	Lorry Receipt	Courier Receipt
Definition	Document for sea freight	Document for air freight	Document for road transport	Document for courier service
Uses	Sea freight, proof of shipment, title of goods	Air freight, proof of shipment	Road transport, proof of shipment	Courier service, proof of shipment
Negotiability	Can be negotiable	Non-negotiable	Non-negotiable	Non-negotiable
Tracking Method	Carrier’s tracking system	Airline’s tracking system	Transport company’s tracking system	Courier’s tracking system
Proof of Delivery	Yes	Yes	Yes	Yes
Transfer of Ownership	Possible	Not possible	Not possible	Not possible
Type of Transport	Maritime	Air	Road	Courier

In-Depth Analysis

Bill of Lading (BOL)

A Bill of Lading is central to maritime shipping and is crucial for international trade. It serves multiple functions:

Receipt of Goods: It confirms that the carrier has received the cargo.
Contract of Carriage: It outlines the terms and conditions under which the goods are transported.
Document of Title: It can be used to transfer ownership of the goods from one party to another.

BOLs come in various types, including:

Straight Bill of Lading: Non-negotiable and used when the goods are consigned to a specific party.
Order Bill of Lading: Negotiable and can be transferred through endorsement.
Bearer Bill of Lading: Can be transferred simply by delivery.

The BOL is a vital document in securing payments through Letters of Credit (LCs), ensuring that the seller gets paid once the carrier confirms receipt of the goods.

Airway Bill (AWB)

The Airway Bill is indispensable in air cargo shipping. Unlike the BOL, the AWB is non-negotiable, meaning it cannot be transferred to claim the goods. It serves as:

Receipt of Goods: Acknowledging that the airline has received the cargo.
Contract of Carriage: Defining the terms of transportation between the shipper and the carrier.

The AWB includes critical information such as:

Shipper and Consignee Details: Names and addresses of the parties involved.
Description of Goods: Including weight, volume, and nature of the cargo.
Flight Information: Details of the flights that will transport the cargo.

Tracking the AWB is straightforward through the airline’s tracking system, providing visibility into the shipment’s status throughout its journey.

Lorry Receipt (LR)

Lorry Receipts are crucial for road transport logistics. They serve primarily as:

Proof of Shipment: Confirming that the carrier has received the goods.
Documentation: Providing details of the shipment, including origin and destination.

While LRs are non-negotiable, they play a significant role in ensuring the correct delivery of goods within domestic and regional contexts. The LR includes:

Carrier Information: Details about the transport company.
Shipment Details: Including the description, weight, and quantity of goods.
Destination Information: The final delivery location of the cargo.

Tracking Lorry Receipts is facilitated through the transport company’s tracking systems, enabling shippers and consignees to monitor the progress of the shipment.

Courier Receipt (CR)

Courier Receipts are used for parcels and documents sent via courier services. They serve as:

Proof of Shipment: Indicating that the courier company has received the package.
Delivery Confirmation: Confirming that the package has been delivered to the recipient.

The CR includes essential details such as:

Sender and Recipient Information: Names and addresses.
Package Details: Including weight, dimensions, and contents.
Tracking Number: Used for monitoring the delivery status.

Courier Receipts are non-negotiable and are primarily used to ensure the safe and timely delivery of packages. Tracking is made easy through the courier company’s online tracking systems, providing real-time updates on the package’s location and status.

Conclusion

Understanding the nuances of transport documents like the Bill of Lading, Airway Bill, Lorry Receipt, and Courier Receipt is crucial for businesses engaged in shipping goods. Each document serves specific purposes and is used in different modes of transportation, with varying degrees of negotiability and tracking capabilities.

This comprehensive guide aims to provide clarity on the differences and uses of these transport documents, helping businesses make informed decisions in their logistics and supply chain operations.