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UNIT 3 Carriage Documentation 115
Unit 3 Notes
__________________
__________________
Carriage Documentation __________________
__________________
__________________
Objectives
__________________
After reading this unit you will be able to understand:
__________________
O The importance of transport documents and their crucial role in
__________________
smooth movement of the goods across borders.
__________________
O Complex web of procedures and documents involved in
transportation of the goods especially by the sea route. __________________
O International legal framework of the rules and regulations which
controls and monitor the movement of the goods by various modes
of transportation.
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UNIT 3 Carriage Documentation 117
specific destination, to be delivered to the consignee, in Notes
return for payment of the carriage charges, if not already __________________
paid. If the bill of lading is specifically endorsed as being __________________
negotiable, ownership to the goods and the right to re-route __________________
the shipment are with the person who has ownership of the
__________________
bill of lading. Such bills of lading are issued to shipper’s
__________________
order, rather than to a specific, named consignee. Where
collection and payment is through banking channels, such __________________
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Notes 2. Clean bill of lading: Clean B/L does not contain any
__________________ adverse remarks on the quality or condition of the cargo
__________________ received. In fact, all importers must insist upon a clean
__________________ bill of lading.
__________________ 3. Dirty (claused) bill of lading: In case a shipping
__________________ company puts remarks on the B/L about the bad
__________________ condition of cargo or its poor /damaged packaging, it
__________________ becomes dirty or claused bill of lading. Generally, this
__________________ kind of bill of lading is not acceptable by most importers
__________________
unless explicitly stated in the contract of sale.
__________________ 4. Received for shipment bill of lading: It indicates that
goods have been received by the shipping company, but
shipment is still pending. In this case, cargo is under
the custody of the carrier lying at his warehouse. In case
of shipment on FAS (free alongside ship) terms, a
“received for shipment” bill of lading is required.
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UNIT 3 Carriage Documentation 119
also the goods have already arrived at the port of Notes
destination. It may lead to delay in customs clearance __________________
of goods at the importer’s end, payment of demurrages, __________________
and the risk of loss or damage to the cargo at the port of __________________
destination especially in the case of perishable cargo. __________________
However, the issuing bank may issue the importer a
__________________
prior ‘shipping guarantee’ for delivery of goods and a
__________________
bond, for getting the goods cleared through customs in
__________________
the absence of the bill of lading. However, an importer
needs to surrender the properly endorsed bill of lading __________________
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Shipping Permit
Before shipment, it is normal for the shipper to apply to the
physical distribution department of the carrier, for a shipping
permit. That permit will be issued when proof is submitted
that arrangements for ocean space for transportation have
been made. Shipments for ocean export may also move on
domestic bills of lading if the shipper wishes to make
arrangements for ocean transportation.
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UNIT 3 Carriage Documentation 121
credit to consign the goods to a third party, like the issuing Notes
bank, or arrange for receiving the payment on cash on __________________
documents basis. __________________
__________________
The International Air Transport Association (IATA) airway
bill is issued in a set of a dozen copies, three of which are __________________
originals. All of these three originals have the same validity __________________
and commercial significance as given below. __________________
__________________
1. First Original (Green): It is for the issuing carrier,
__________________
which is to be signed by the consignor or his agent.
__________________
2. Second Original (Pink): It is for the consignee. It is __________________
accompanied with the goods through the destination. It
is signed by the carrier or his agent.
Now a day, air carriers normally use the uniform air way bill
as prescribed by the official Air Freight Tariff. The ‘tariff’
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Notes stipulates that the shipper must present and prepare a non-
__________________ negotiable air way bill with each shipment. No air way bill
__________________ or other air shipping document is negotiable, regardless of
__________________ what wordings are used herein. Goods valuation also must
__________________ be indicated on the air bill for tariff calculation purposes
only. A universal air bill of lading has been adapted by most
__________________
international air carriers.
__________________
__________________ Arrival Notices
__________________
Traditionally, an “arrival notice” is sent to the “consignee”
__________________
after the shipment arrives at the destination port. The notice
__________________
contains the same information as given in the air waybill. In
addition, the location of the goods and the time when goods
may be picked up is also given. While the telephone is often
used for this purpose, an arrival notice is still sent to verify
notification and as a confirmation of notifying the consignee.
Freight Bills
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UNIT 3 Carriage Documentation 123
Combined Transport Document (CTD) Notes
__________________
The business environment is moving faster than ever before.
__________________
Increased competition at home and abroad means quality as
__________________
well as profitability must be preserved with lot of efforts
and efficient transportation systems. We live in a constantly __________________
This was one of the reasons why ICC and UNCTAD __________________
developed the new UNCTAD/ICC Rules for Multimodal __________________
Transport Documents (MTD). With multimodal transport by
containers becoming popular, combined transport document
(CTD) is increasingly being used by the exporters.
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Notes consignor, the place and date of taking charge of the goods
__________________ by the MTO (Multimodal transport operator), the place of
__________________ delivery of the goods, the date or the period of delivery of
__________________ the goods at the place of delivery, whether it is negotiable or
__________________ non-negotiable, the place and date of its issue, etc. In addition,
the standard terms and conditions regarding basis of liability
__________________
of the MTO for loss or damage, delay etc. is incorporated in
__________________
the document. Relevant particulars contained in the
__________________
internationally accepted documents recognized by
__________________ International Chamber of Commerce (ICC) have been taken
__________________ into consideration while prescribing the document. The
__________________ MTOs can now issue on a uniform basis Combined Transport
Document as a negotiable instrument as per the Multimodal
Transportation of Goods Act, 1993 and the banks will have
no difficulty in discounting the bills when such a document
is presented.
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UNIT 3 Carriage Documentation 125
be clear in contract, although there could be remedies in tort Notes
/ delict (the issue of risk will have been most carefully __________________
considered to decide who should insure the goods during __________________
transit). __________________
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1. a charter party or
2. a bill of lading.
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UNIT 3 Carriage Documentation 127
1. Implied warranty of seaworthiness. The ship owner, Notes
when he enters into a charter party for a voyage __________________
warrants that the ship is seaworthy. This is an assurance __________________
by the ship owner, at the time of entering into the charter __________________
party, that (a) the ship is fit to encounter the ordinary __________________
perils of navigation during voyage and (b) to carry the __________________
specific cargo.
__________________
This warranty of seaworthiness extends only to (a) __________________
seaworthiness at the time of sailing and (b) fitness at __________________
the time of loading the cargo. Once the ship has sailed __________________
or the goods are on board, this warranty ceases to __________________
operate. But in case the voyage is divided into stages,
the ship must be seaworthy at the commencement of
each voyage.
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UNIT 3 Carriage Documentation 129
Duties of a Common Carrier Notes
__________________
A common carrier’s duties are:
__________________
1. a common carrier is bound to carry goods of all persons __________________
who choose to employ him. He can, however, refuse to
__________________
carry goods under the following circumstances:
__________________
a If there is no accommodation in the carriage;
__________________
b If the person employing him is not willing to pay __________________
reasonable charges for the carriage of goods; __________________
c If the goods are such which he is not accustomed to __________________
carry; __________________
d If the goods are to be carried over a route which is
not his regular route;
if the goods are-dangerous and as such subjecting
him to extraordinary risk;
e If the consignor refuses to disclose the nature of the
goods to be carried; and
f If the goods are not properly packed.
g If a carrier refuses to carry the goods of a person for
any reason other than those mentioned above, he
may be held liable for damages.
2. He must carry the goods over the usual and customary
route and take all reasonable precautions for their safe
carriage. He must not deviate from the usual route
unless rendered necessary by exceptional circumstances.
3. He must deliver the goods at the agreed time and if no
time had been fixed, within a reasonable time.
4. At Common Law, he is an insurer of the goods in the
sense that he warrants to carry the goods safely and
securely.
Liabilities of a Common Carrier: The liability of a common
carrier of goods is laid down in the Carriers Act, 1865. For
this purpose, the Act has classified the goods into two
categories:
(i) Scheduled goods and
(ii) non-scheduled goods.
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UNIT 3 Carriage Documentation 131
(ii) A common carrier is bound to carry the goods of any Notes
person provided certain conditions are satisfied. A __________________
private carrier is free to accept or reject the goods for __________________
carriage by any mode of transportation. __________________
Review Questions
1. Explain and discuss various carriage documents and their role in the
smooth movement of cargo from the warehouse of the exporter to the
warehouse of the importer?