Document characteristics and preparing documents

Transport document flow

 UCP recognized transport documents
 Multimodal Bill of Lading
 Ocean Bill of Lading
 Non-negotiable seaway Bills
 Charter party Bill of Lading
 Air transport document
 Road, rail or inland waterway transport documents
 Courier receipts, post receipts or certificates of posting
Documents not considered as Transport documents under UCP 600
• A18) a. Documents commonly used in relation to the transportation of goods, such as but not limited to, Delivery Note,
Delivery Order, Cargo Receipt, Forwarder’s Certificate of Receipt, Forwarder’s Certificate of Shipment, Forwarder’s
Certificate of Transport, Forwarder’s Cargo Receipt and Mate’s Receipt are not transport documents as defined in UCP 600
articles 19‐25.

 Mate’s receipt: A Mate’s receipt (MR) is a receipt issued and signed by the chief mate of the ship for goods received on
board.

 Forwarder's certificate of transport: Document issued by a freight forwarder to certify that he has taken charge of a
specified consignment for dispatch and delivery in accordance with the consignor's instructions.

 Forwarder’s cargo receipt: It serves only as confirmation that the cargo has been received for shipping. The FCR does not
confirm the condition of the cargo nor that the cargo has left the country of origin.
 Common parties in transport documents
• Shipper or consignor: The party arranging for shipment of the goods, usually the beneficiary. However, this is not an absolute requirement.
According to subarticle 14(k), any party can be named as shipper or consignor unless the documentary credit states otherwise

• Consignee: The consignee may be a named entity, in which case the document may be referred to as being ‘straight consigned’. If the
transport document is issued in negotiable form, it is to show that goods have been consigned ‘to order of [named entity]’, ‘to order’ or ‘to
order of shipper’.

• Notify party: Most types of transport document will make provision for a ‘notify party’ to be inserted. A notify party is a party that is to be
advised by the carrier, or its agent, upon arrival of goods at the named destination. The notify party will usually be the applicant, its clearing
agent or the issuing bank.
 LC fields regarding shipment – an overview
The transport document required by the documentary credit should also reflect the routing that is shown in field 44 of the SWIFT
MT700 message.

• 44A: Place of Taking in Charge/Dispatch from.../Place of Receipt

• 44E: Port of Loading/Airport of Departure

• 44F: Port of Discharge/Airport of Destination

• 44B: Place of Final Destination/For Transportation to.../Place of Delivery

 44E and 44F are completed - the required document should be a bill of lading, a non-negotiable sea waybill, charter party bill
of lading or air transport document.

 44A and 44B are completed - the required document should be a multimodal transport document, a road, rail or inland
waterway transport document (except where the inland waterway transport document is issued in the form of a bill of lading),
or a courier receipt, postal receipt or certificate of posting.

 If any three or four of fields 44A, 44E, 44F and 44B are completed, the required document should be a multimodal transport
document.
 Key Characteristics of a transport document
1. It acts as a document of title, which permits the sale of goods in transit and availing financial credit.
2. It is also a receipt of shipped goods, issued by the carrier to the shipper, stating that the carrier has received the goods
and they are in good condition.
3. It establishes a legal carriage contract between the carrier (transportation company) and the shipper.
Negotiable vs Non-negotiable
 Multimodal transport document
A multimodal transport document is a document that covers at least two different modes of transport. The goods can be transported by a
combination of different modes of transport, for example any combination of road, sea, air and rail.
A multimodal transport operator (MTO) or combined transport operator (CTO) undertakes contractual responsibility for ensuring that the
goods are carried to their destination.
Advantages:
 They can help to reduce transit times
 They can lower costs

 Title, negotiability and transfer :Yes When the last leg is sea (to order…)
 Control over goods: Issuing bank request all originals resented to it
 Delivery of goods: surrender of an original / against simple identification or delivery note
 Marine Bill of Lading
A documentary credit should require the presentation of a bill of lading only when the goods are to be shipped from port to port, ie where no
inland place of receipt or inland place of final destination is involved.
 Title, negotiability and transfer :Yes (to order…)
 Control over goods: Issuing bank request all originals resented to it
 Delivery of goods: surrender of an original / against simple identification or delivery note
 Non Negotiable Sea Way Bill
A non-negotiable sea waybill is to be consigned to a named party – usually the issuing bank in a documentary credit transaction. They are also
referred to as a ‘straight consigned transport document.
Non-negotiable sea waybills are used because a traditional bill of lading, the surrender of which is required before the carrier will deliver the
goods, is not practical for short sea journeys.

 Title, negotiability and transfer : This is not a document of title and is not a negotiable document.
 Control over goods: Issuing bank should insist upon being named as the consignee.
 Delivery of goods: against simple identification or delivery note
 Charter party Bill of Lading
Charter party bills of lading (CPBLs) are specialized bills of lading that operate within the framework of a charter party agreement. Unlike
conventional bills of lading, CPBLs are specifically tailored for commodity or bulk shipment cargoes. To engage in a charter party shipment, the
vessel owner and the charterer enter into a contract that outlines the legal terms and conditions of the arrangement1.
The goods are loaded and discharged according to the terms of the charter party contract and, for this reason, some banks do not consider a
charter party bill of lading as having the same level of security in the goods as a conventional bill of lading, even if the document indicates that
the goods are consigned or endorsed to its order. A bank is not concerned with, nor does it examine, a charter party contract even if called for
under a documentary credit.
 Airway Bill
An air waybill is a document covering the carriage of goods by plane from one airport to another. The original for shipper, usually original
No. 3 of the air waybill remains with the seller for submission to the bank.

What are the Functions of an Air Waybill?

An air waybill serves the following functions:
 to document the contract of carriage
 to prove receipt of goods for shipment
 it is a waybill

 Title, negotiability and transfer : This is not a document of title and is not a negotiable document.
 Control over goods: Shipper or consignor till delivery. Issuing bank wants control - should insist upon being named as the consignee.
 Delivery of goods: against simple identification or delivery note
 Road transport document
Banks mention Road Transport Document as “CMR Road Transport Document “, “Truck Consignment Note”, “CMR Consignment Note” in letters
of credit.

What are the Functions of a road transport document?

A road transport document serves the following functions
 to prove receipt of goods for shipment
 it is a waybill

 Title, negotiability and transfer : This is not a document of title and is not a negotiable document.
 Control over goods: Carrier till delivery. Issuing bank wants control - should insist upon being named as the consignee.
 Delivery of goods: Delivery is to the named consignee at the address shown on the document or delivery note
 Rail Transport Document

Banks mention “Rail Transport Document” as “Rail Transport Document “, “Rail Consignment Note”, or “CIM Consignment Note” in letters of
credit. Rail transport document or rail consignment note is a transport document used in rail shipments.

What are the Functions of a rail transport document?

A rail transport document serves the following functions:
 to prove receipt of goods for shipment
 it is a waybill

 Title, negotiability and transfer : This is not a document of title and is not a negotiable document.
 Control over goods: Carrier till delivery. Issuing bank wants control - should insist upon being named as the consignee.
 Delivery of goods: Delivery is to the named consignee at the address shown on the document or delivery note
 Inland waterway & Courier receipts, post receipts or certificates of posting

Road, rail or inland waterway transport documents are not documents of title and are not negotiable documents. The exception is when an
inland waterway transport document is issued in the form of a bill of lading – that is, to order of a named entity, or ‘to order’ or ‘to order of the
shipper

Courier receipts, post receipts or certificates of posting:

What are the Functions of a courier receipt?

A courier receipt serves the following functions:
 to prove receipt of goods for shipment

 Title, negotiability and transfer : This is not a document of title and is not a negotiable document.
 Control over goods: The control over the goods remains in the care of the courier company or postal authority
 Delivery of goods: Delivery is to the named addressee.
 Assignment for the day
Read the common discrepancies found in transport documents
• 12.4.10 Common discrepancies in respect of transport documents
 Marine Insurance
What is marine insurance?
 Marine insurance offers coverage for any damage or loss related to ships, cargo, terminals, transports, or transfer. Simply put, a marine
insurance policy will cover any loss or damage surrounding the boat or watercraft.

What Does a Marine Insurance Cover?

 Marine insurance will also cover your ship and cargo if you face any problems while transporting goods. Moreover, it will cover liabilities in
the event of damage or loss of the goods.

How Does Marine Insurance Work?

 When you purchase marine insurance coverage, it transfers all the liability from you and other stakeholders to the insurance provider. In
most cases, the export contracts come with an obligation that the exporter must have marine insurance. Therefore, if you are an exporter,
you need to take out marine insurance to fulfill the agreement’s terms and conditions, such as Carriage and Insurance Paid (CIP) or Cost
Insurance and Freight (CIF).
Insurance Document and Coverage– Sub article 28
 Financial documents / Commercial documents / Official documents
Financial documents:
 Financial documents are legal documents that provide evidence of claims for amounts owed, such as a draft (bill of exchange) and
promissory notes.

Commercial documents:
 Commercial documents include invoices, certificates (of weight, inspection and of analysis, etc), and packing and weight lists

Official documents
 Official documents allow a party to the sale contract to satisfy regulatory requirements. An applicant may need an official document to
satisfy import regulations or health regulations. A beneficiary may need an official document to satisfy export control authorities.
 Giving notice of refusal to a beneficiary or presenting bank

 Discussions with beneficiaries

 Correction of documents by beneficiaries
 Obtaining the issuing bank’s authority to accept discrepancies
 6 Receiving instructions from a beneficiary to dispatch documents to an issuing bank for honour
 Dispatch of documents to an issuing bank