If your buyer pays by letter of credit, a bank clerk will read your bill of lading before any money moves. UCP 600 Article 5 says banks deal with documents and not with goods, so the bank does not check the cargo. Under Article 14(d) the data in a document need not be identical to the credit, but must not conflict with it or with the other documents.
What a bank accepts
Article 20 lists what the clerk looks for on a bill of lading: the carrier’s name, a signature by the carrier, the master or a named agent, shipment on board a named vessel at the loading port in the credit, the full set of originals, and no sign that the bill is subject to a charter party. A bill pre-printed “received for shipment” gets through only with a dated on board notation, and that date becomes the shipment date (ISBP 821, paragraph E6). The same paragraph wants the vessel and loading port in the notation when the bill shows a place of receipt other than the port and a means of pre-carriage.
A forwarder’s bill can pass too. Article 14(l) accepts a transport document from a party other than the carrier, owner, master or charterer, provided it meets Articles 19 to 24.
Then there is the clean test. Article 27 says a bank takes only a transport document with no clause or notation expressly declaring the goods or packaging defective. The word “clean” need not appear. One stamped remark about damaged cartons is enough to get the bill refused. The full rules are on the ICC library.
Selling the cargo before it arrives
A buyer in the middle of the ocean needs something to hold. In the US that is a bill stating delivery “to the order of” a consignee, which is negotiable unless it says on its face, by agreement with the shipper, that it is not (49 U.S.C. 80103). That chapter covers bills issued by a common carrier for carriage within the US or from the US to a foreign place (49 U.S.C. 80102). The English Carriage of Goods by Sea Act 1992 (section 1) includes in “bill of lading” a bearer bill transferable by delivery without endorsement.
The seller endorses the original and hands it over. Maersk’s guide says the holder has the right to claim the goods and at least one original must be submitted at the discharge port. A bill naming one consignee does not travel like this, and delivery goes to the named party unless that party issues a letter of subrogation to the carrier for someone else.
What the new owner relies on is the description. Under the Hague-Visby Rules the bill is prima facie evidence of the goods as described, and once it reaches a third party acting in good faith, proof to the contrary is not admissible (Article III, rule 4). The shipper, meanwhile, is deemed to have guaranteed the marks, number, quantity and weight it supplied.
When the paperwork will be late
A paper negotiable bill generally has to reach the discharge port, and icontainers notes that couriering originals can add cost and delay if the vessel arrives first. With a telex release the shipper generally surrenders the full original set to the carrier at origin and completes any payments and authorization steps, and the carrier’s origin office then sends a release instruction to its destination agent. icontainers stresses that this is an instruction with no copy of the bill involved, that it does not replace customs clearance or destination charges, and that availability varies by carrier and route.
A sea waybill skips the originals. It carries no title, and the carrier releases to the named consignee (Maersk). Wallenius Wilhelmsen has shipments between related companies in mind: one named consignee, no letter of credit, no resale on the way. In English law it is a receipt that evidences the contract and names the person who gets delivery (Carriage of Goods by Sea Act 1992, section 1). Under a letter of credit it works only if the credit asks for a waybill or for a generic transport document. Under UCP 600 a bill of lading sits in Article 20 and a sea waybill in Article 21. If the credit calls for a bill of lading, the waybill is refused.
Once the cargo is loaded, the bill number is also the best all-round tracking reference, and if it returns nothing it is likely too early. Navo’s guide on how to track a container by bill of lading number says to try the booking or a container number instead.
A few pallets through a forwarder
LCL cargo goes to a container freight station, gets consolidated with other shippers’ goods, and is separated at a station at destination. Maersk calls this the CFS/CFS model. CY/CY is the full-container version, where the box goes in and out of the container yard at each end.
The container then carries two sets of bills. The shipping line issues a master bill to the NVOCC, and the NVOCC issues a house bill to each real shipper. 46 CFR 515.2 defines an NVOCC as a common carrier that does not operate the vessels and is a shipper in its relationship with the ocean carrier, and lists reselling purchased transportation and issuing bills of lading among its services. A US-based one needs an FMC license and a bond or equivalent (515.3, 515.21). The FMC’s bond page puts it at $75,000, or $150,000 for a registered non-US-based NVOCC.
Door to door
A combined transport bill covers at least two modes. UCP 600 Article 19 asks it to name the place of dispatch or taking in charge and the place of final destination, and transhipment is fine as long as one document covers the whole carriage. The truck is a separate question. With carrier haulage the line arranges the inland leg, with merchant haulage the shipper hires the haulier (Maersk). Maersk’s own CY terms start and/or end its responsibility in a container yard, while with store door it is responsible for moving the container from the load address and/or to the delivery address.
The Hague-Visby Rules run from loading onto the ship until discharge (Article I(e)). A box damaged on the road falls outside that period, so the inland leg rests on the contract terms and on whatever law governs road carriage.
A through bill raises the same question for legs the issuer does not sail. The Swedish Club’s P&I rules commentary uses “through transport” for a chain of sea transports and “combined transport” for mixed modes, so check which one a given bill means. The commentary says the Hague and Hague-Visby Rules allow a carrier to exclude liability for a stage it does not perform, but it may still have to pay if nobody can establish who held the cargo when it was lost.
Frequently asked questions
How long after loading do I have to hand the documents to the bank?
Under UCP 600 Article 14(c), a presentation that includes original transport documents must be made not later than 21 calendar days after the date of shipment, and in any event not later than the expiry date of the credit. The date of shipment is the one on the bill's on board notation, or the issue date if the bill is pre-printed 'shipped on board' (Article 20(a)(ii)).
Can the goods description on the bill be shorter than on the invoice?
Yes. UCP 600 Article 14(e) lets documents other than the commercial invoice describe the goods in general terms, as long as the wording does not conflict with the description in the credit. ISBP 821 paragraph E22 repeats it for the bill of lading. The invoice is the one document that has to match the credit's description.
Why does the master bill for my LCL cargo show the forwarder and not me?
On a consolidated container the carrier's bill is issued to the NVOCC, so the master bill names the NVOCC. For US imports, 19 CFR 4.7a lets the master bill list the NVOCC, freight forwarder or container station as shipper and consignee. Each house bill in the consolidation shows the foreign vendor and the party to whom the cargo is delivered in the United States, so your name sits on the house bill.