q: Dear All,

The requirement in a B/L is worded as follows:

"Full set of 3/3 original shipped on board bill of lading to the order of XYZ bank and notify ABC (Customer)....."

In this case the LC is silent whether a Freight forwarder's or Consolidator's B/L is allowed or not. If we produce Freighter forwarder's B/L (FCL/FCL) or consolidator's B/L (LCL/LCL shipment), would that satisfy the requirement or are we required to provide a Liner B/L only.

In case, we are unable to provided a Liner B/L (Most often in case of LCL/LCL shipment), what is the remedy available?

How should the freight forwarder's B/L be signed?

Requesting your help in the above query

Regards,

Kapil

I thank you for your message. Well received.

I can see that Scottie has answered the same question in the letterofcreditforum. I think it is a good and correct answer and have nothing more to add.

If you need further kindly let me know.

Best regards

Kim Christensen

[Note: The mentioned answer in letterofcreditforum is available here. The page links to the interview with Sheilar from China (topic 4) available here]

I thank you for your prompt reply.

One question: if the LC is silent as to freight forwarders, and we have taken a B/L from a freight forwarder, then how should it be signed as they are not acting as agent of the master or carrier but independently? Is there still any need to identify carrier on the BL?

Yes - if the LC calls for a bill of lading, then (as Scottie said) article 20 applies - this includes the following:

indicate the name of the carrier and be signed by:

• the carrier or a named agent for or on behalf of the carrier, or
• the master or a named agent for or on behalf of the master.

Any signature by the carrier, master or agent must be identified as that of the carrier, master or agent.

Any signature by an agent must indicate whether the agent has signed for or on behalf of the carrier or for or on behalf of the master.

Add to that the following from ISBP:

94. Original bills of lading must be signed in the form described in UCP 600 sub-article 20(a)(i) and indicate the name of the carrier, identified as the carrier.

a. If an agent signs a bill of lading on behalf of the carrier, the agent must be identified as agent and must identify on whose behalf it is signing, unless the carrier has been identified elsewhere on the bill of lading.

b. If the master (captain) signs the bill of lading, the signature of the master (captain) must be identified as "master" ("captain"). In this event, the name of the master (captain) need not be stated.

c. If an agent signs the bill of lading on behalf of the master (captain), the agent must be identified as agent. In this event, the name of the master (captain) need not be stated.

95. If a credit states "Freight Forwarder's Bill of Lading is acceptable" or uses a similar phrase, then the bill of lading may be signed by a freight forwarder in the capacity of a freight forwarder, without the need to identify itself as carrier or agent for the named carrier. In this event, it is not necessary to show the name of the carrier.

So basically the bank will not care if the document is in fact signed by a freight forwarder - only that it is signed correct (i.e. in the correct capacity) - as above.

I hope this helps you

Best regards

Kim Christensen

Extremely sorry for bothering you much.

But devil for me lies in paragraph 95 of the ISBP where it is mentioned that If a credit states "Freight Forwarder's Bill of Lading is acceptable" or uses a similar phrase. . .  then and then only it can be signed by freight forwarder in the capacity of freight forwarder so;

does that mean that if credit is silent as to freight forwarder's BL, it needs to be signed either by carrier, master or agent of any of these two in the respective capacity and freight forwarder can not sign it in freight forwarder's capacity?

If answer of above question is yes, then when the freighter forwarder is neither the carrier, nor master and nor acting as agent of any of these two, how to signed “by freight forwarder as master, carrier or agent of any of these two”?

Thanks

No need to apologize :-)

In any case I can only say the following:

Your conclusion is correct - a freight forwarder issuing a transport document to be presented under an LC must sign it according to the articles/paragraphs I have quoted above. Otherwise the documents will be considered discrepant and may be refused.

If the Freight forwarder is not in a capacity to sign e.g. "as carrier" the option lies to include the phrase "Freight forwarders B/L acceptable" into the LC.

Also note UCP 600 article 14,l:

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.

What they are trying to say, is that it does not matter if the person signing is the actual owner of e.g. the vessel. It is acceptable for Freight Forwarders, NVOCCs etc. to issue such documents - as long as they sign in the capacity as a carrier (or on behalf on the carrier). I.e. that it is a carrier type document, where one entity is assuming carrier responsibility.

I hope this helps you.

Best regards

Kim Christensen

Now i got it clear.

Thank you very much for your kind help understanding the issue.

27 January 2008, Mr. Shahriar Masum asked a series of questions regarding this issue. For purpose of readability - the Q and A is written next to each other:

I just read your email exchange with Shahriar Masum on the issue of FF BLs. I wanted to address to of those questions and perhaps provide some clarifications. Please, keep in mind that I am not a transportation lawyer.

3. How the BL issued by the MLO will be affecting the FF's BL. For example if the FF is the consignee in master BL and becomes bankrupts before delivery.

Kim is correct that there is no contractual relationship (privity of contract in the legal jargon) between the “real consignee” and the actual carrier. What happens if the FF becomes bankrupt before delivery? Once the FF is in bankruptcy, a court-appointed trustee will administer the case (in the U.S. it may be a debtor in possession as well). As of the moment of filing for bankruptcy all dispositions with the bankrupt’s property are stayed. In other words, no property may be transferred or disposed of without the consent of the trustee and the bankruptcy court. It is a very interesting issue what happens to the goods when the FF files for bankruptcy. Presumably, the FF has already paid for freight to the actual carrier. In that case, the trustee will claim the goods from the carrier. S/he may do so on the basis of succession to the rights of the FF/consignee. The trustee steps into the shoes of the bankrupt FF. It is similar to a situation when one company is merged into another.

Then the question is whether the goods should belong to the bankruptcy estate or be handed over to the actual consignees. The bankruptcy estate is a very broad concept and comprises all rights of the bankrupt, including all legal and equitable interests (See § 541 of the U.S. Bankruptcy Code). The goods may remain part of the bankruptcy estate if the real consignees have not paid the FF for the performed services. In that case, the trustee would have a property claim against the goods by way of possessory lien. However, if the real consignees have no outstanding obligations to the FF, then I believe the goods should be handed over to the real consignees who are the real owners of the goods.

4. Regarding question no. 4 and the support for ocean transportation, here is my opinion.

First of all, there are three major international conventions that regulate transportation of goods by sea: 1) the 1924 Hague Rules ratified by for instance the U.S., 2) the 1968 Hague-Visby Rules ratified by for instance the U.K. and 3) the 1978 Hamburg Convention ratified by Germany. Let’s first look at the Hague Rules. Article 1 defines the carrier as follows: carrier "includes the owner or the charterer who enters into a contract of carriage with a shipper." With some rare exceptions, I do not think that the FF qualifies either as the owner or the charterer. Article 2 provides that "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title. Transport receipts issued by FF are not documents of title, because the FF does not have possession or control over the goods. In contrast, the bill of lading issued by the actual carrier would typically qualify for a document of title.

The definitions of the carrier and the contract of carriage have not been changed in the Hague-Visby Rules; therefore, the same analysis applies. Unlike the air transportation conventions (e.g., the Warsaw Convention), neither the Hague nor the Hague-Visby Rules provide for a transport document issued by a contractual carrier. Accordingly, the FF would not qualify as the carrier under any of these regimes.

The definitions in the Hamburg Convention are slightly different. The Convention recognizes the difference between the contractual and the actual carrier and defines the actual carrier separately. The Convention does not limit its application to bills of lading and other documents of title, but it also applies to other contracts of carriage, which it defines as "any contract whereby the carrier undertakes against payment of freight to carry goods by sea from one port to another." The Convention applies to transportation of goods by sea that is documented in 1) a bill of lading or 2) other document evidencing the contract of carriage by sea. Consequently, the scope of the Hamburg Convention is broader than that of the Hague and the Hague-Visby Rules. I think that the FF transport document could be covered by the Hamburg Convention without express incorporation and the FF may qualify as the carrier.

Regards,

Marek