| [1] Insurance contract |
- Insurance policy should be issued before a bill of lading issuance
(1) Acceptable insurance documents |
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- As per the Article No. 34 of UCP, it regulates in a written statement of the
requisites of the insurance documents for a bank to accept. |
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- If the insured conclude an insurance contract, a bank should accept this since it
is a insurance contract documents issued by an insurance company. (The Sub-Article No. 34-a of UCP) |
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| - A professional exporter computes the amount for the insurance subjected
goods for a certain period (Per 6 month or per 1 year ) and conclude a
comprehensive contract with an insurance company. It should be accepted
because this is the actual insurance certificate received by an insurance
company when an insurance is actually purchased. (The Sub-Article No. 34-d of UCP) |
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- If the insured purchase insurance through an insurance broker, the insurance
documents issued by the insurance broker are not acceptable by a bank.
(The Sub-Article No. 34-c of UCP). |
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| (2) Insurance terms required by L/C |
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| 1 Issuing date of insurance documents |
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- A bank refuse to accept the insurance documents that are issued later than
the date indicated on the transportation documents in general. (The Sub-Article No. 34-e of UCP).
- If an insurance policy is presented based on the open policy and if a special
agreement for compensation for retroactive is indicated in an insurance policy: Subject to acceptance regardless of issuing date.
- Insurance documents acceptance condition that are issued after shipping date. |
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- Except for the following examples, there is a doctrine that a banks should
accept by recognizing the effect. |
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a. If "Lost or not Lost clause" is indicated as an insurance term which is a
retroactive agreement, an insurance company is also liable for payment
regardless of coverage date so a bank accepts this. (ICC's opinion is
injustice).
b. If insurance is purchased on "warehouse to warehouse" term: Since an
insurance company's payment liability ranges extends from a exporter's
warehouse to an importer's warehouse, the coverage date become
meaningless therefore, accepts. (ICC's opinion is injustice)
c. If an Insurance certificate is presented as the insurance documents:
Since a exporter is suppose to present a certificate for the said shipping
portion that is already cover by an open policy before the shipping bank
accepts the documents. (ICC's opinion is also positive) |
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| 2 Insurance payment currency and currency of a L/C's correspondence |
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| - To eliminate inconvenience of the possible foreign exchange rate changes if the payment is not made with the L/C indicated currency, acceptance is refused. (The Sub-Article No. 34-f-i of UCP) |
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| 3 More than 110% coverage of L/C amount |
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- Coverage should be 10% more increase term on the minimum insurance
amount from CIF or CIP and if computing CIF or CIP amount is difficult, the
larger amount between Nego amount (Bill amount) and the commercial
invoice amount should be the standard.(The Sub-Article No. 34-f-ij of UCP)
- Reason for 10% increase than the subject goods : In assuming that an
importer has made at least 10% profit from the transaction, this is a tenor to
reserve the expected profit and this 10% is called expected profit. |
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- The ranges of incident to be cover by an insurance have to be specifically
regulated in L/C and refrain from using expressions such as usual risks and
customary risks.(The Sub-Article No. 35-a of UCP)
- For the marine carrier according to ICC regulations: It request that the range
of risks should be more than minimum -FPA(Icc (c)), and TLO term is now
allow to be apply on the marine transportation.
- Coverage terms for the airline carrier: According to IATA(International Air
Transport Association) regulation, only A/R Air term is permitted, and the
range of a marine transportation's A/R is different and rather similar to TLO.
- Ranges of risks that insurance guarantees |
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| - The kinds of accident is caused by a strand of vessel, capsized, a fire
and collation, which all the insurance subjected matters are total loss. The
compensation is made in this case. . |
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| 2 FPA(Free from particular Average) : ICC(C) |
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| - Other contacts than TLO, Compensation is made only when the insurance
subjected matters are total loss due Stevedoring and jettison from the port of
distress. ICC(c) includes total loss of packaging in units for compensation
range during Stevedoring process. |
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| 3 WA(with Average) : ICC(B) |
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| - It has been expended from FPA terms to earth quake, struck by
lightening, washing overboard, seawater damage etc and also it covers for
the partial loss for the insurance subjected matters. |
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| - Except war and riot, all the risks are covered. New agreement should
indicate this as ICC(A). |
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| - Risks that are covered only by special agreement. |
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| - If an accident occurs due to war, riot and strike : A/R is not enough for coverage so, conclude a special agreement by paying extra fee. |
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| - Cases that are not subjected for coverage |
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- If a cause of incident is not by an accident and found as "necessity", it
would be terminated from subjected for coverage. It can not also be
compensated by the special agreement. (War agreement etc.).
- ICC lists these examples in waiver clauses (General waiver clauses) |
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1. Accident occurred intentionally
2. Necessity accident
3. Accident occurred by packing defect
4. If a vessel is awarded as lack of seaworthiness |
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| 5 Problems with Irrespective of percentage |
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- The principle of petty claim non-indemnity is regulated on the back of
insurance certificate as print clause.
- If the insurer wish to receive indemnity for the petty claims, it has to be
concluded as Irrespective of percentage agreement.
- As per the Sub-Article No. 35-c of UCP, even the insurance without
Irrespective of percentage is regarded as valid insurance contract.
a. Irrespective of percentage(Franchise) |
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| - For WA term coverage : Insurance are not suppose to cover smallest
damages in general rule, it indicates non-covering range differently as per
the items. |
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1. Partial loss for Bulky cargo such as grains and salts are not for
indemnity except general average and vessel strand.
2. Goods that are 5% damage with sugars, cigarettes, hemp and raw hide
are not for indemnity.
3. Other items except above state items, are not for indemnity those
damages are less than 3%/ |
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- Even with Irrespective of percentage application, insurance companies will
deduct 3% or 5% from damage occurred amount for the "deductible
Franchise" compensation indemnity.
- As long as the range of damage exceed more than waiver rate for
"Non-deductible Franchise", entire amount is for indemnity without any deduction. |
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| b. WAIOP(With Average Irrespective of percentage) |
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- For insurance contract with WA terms : If wish to receive indemnity for
even petty damages, this term should be indicated in L/C and conclude
special agreement of WAIOP with an insurance company.
- For those Bulky condition grains or fish types: Apply petty claim additionally
is physically impossible and an insurance company refuses to conclude
WAIOP agreement. |
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- Contract with FPA, WA: If wish to be cover for special risks that are not
listed in the insurance policy, the said risks item should be added to the
insurance subjected matter and pay additional risks rate.
| - The kinds of risks to be added |
1 TPND
2 RFWD
3 Breakage
4 Leakage and Shortage
5 contamination
6 Hook & Hole
7 Denting & Bending |
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1. Insurance period--For marine insurance, compensation is only from the risk
that a cargo get loaded on board until unloading from the arrival port. If
agree to extend the insurance period as "warehouse to warehouse", up to
60 days from the unloading can be cover.
2. Transfer the right to request insurance --Since an insurance policy is
marketable securities, it can be transfer to others by endorsement. If insert
"....endorsed in blank" term in L/C, the right to request insurance can be
exercised by an exporter before on board, and importer after on board.
3. Indicating insurance payment period--With CIF contract, in order to facilitate
the convenience of the request when an accident occurs, indicate the
insurance payment location as the importing country and also a claims setting agent should be nominated on the insurance contract.
4. The insurance coverage date should be before the shipping date of B/L, or
there should be a special decapitate compensation agreement. |
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| (3) Marine cargo insurance |
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| - There are export insurance and cargo insurance for trading. The export insurance is to cover if the trading party's creditability is unstable. The cargo insurance is to cover any loss while transportation of the goods to be export/import. |
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| <2> Basic terminology for cargo insurance |
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1. Insurer, Assurer, Underwriter--A person who took over the insurance contract responsible for compensation when there are accident.
2. Insured, Assured-- As a offerer of the insurance contract, the one has responsible for insurance premium, notifying important matters or any risk increase.
3. Insured, Assured--A person who is entitled to right to compensation when there is a damage caused by an accident.
4. Premium-- Payment for the risk by insured.
5. Claim--Compensation of the damage by insured.
6. Subject-Matter Insured-- As an object of risk occurrence, there are Cargo Insurance and Hull Insurance in large to divide.
7. Insurable Interest--Interests If there is a concern of economical damage to a person insured due to a claim occurrence on the subject-mattered insurance.
8. Insurable Value--A maximum limit of economical damage that is likely to occurred to the insured's profit
9. Sum Insured--The actual amount cover by insurance. The maximum amount that a insured has to pay in liability and compensation. |
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| <3> The types of sea damage |
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1. Direct damage--Damage occurred on subject-matter of insurance due to a claim.
2. Indirect damage--Damages rather than a direct damage due to claim to a person insured.
3. Property damage |
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- actual total loss
- constructive total loss--If a damaged occurred on the subjected-matter insured article |
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- If a vessel is missing even after a certain period of time and regarded the incident as a total loss.
- Because the loss is severe and impossible to be used for its original purpose or if mending expense is high although subject-mattered insurance is not wiped out.
- When requesting compensation, accept compensation after abandonment subject-mattered insured and the insurer subrogation the right to request to the insured assured |
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- particular average
- general average |
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- When a vessel and a loading cargo is under a calamity
- A damaged occurred by a captain's action for the common profit. Expense for the sacrifice and risks the expense is burden by the owner of a ship who was able to be saved from the disaster and the owner of a goods. |
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- Exclusion expense of possible risks to subject-mattered insured
a. sue and labour charge
b. survey free
c. salvage charge
d. salvage
e. partial charge |
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| <4> Compensation condition for Marine loss |
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| a. Previous regulation of committee |
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| Damage to be compensate |
F.P.A |
W.A |
A/R |
| 1 Total loss |
O |
O |
O |
| 2 General average |
O |
O |
O |
| 3 Marine salvage expense and loss prevention expense |
O |
O |
O |
| 4 Strand. capsized. and particular average when a there is a big fire occurred |
O |
O |
O |
| 5 Shipping. transship. total loss while unloading as per every unit package. |
O |
O |
O |
| 6 Fire, explosion, collation . loss due to contact or damage from the port of distress |
O |
O |
O |
| 7 Particular average excluding above 4~6 |
X |
O |
O |
| 8 Damage by seawater due to foul weather |
X |
X |
O |
| 9 All the loss due to external and contingencies of the bottom exclusion |
X |
X |
O |
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| - Exclusion : Detail list on the printed agreement of Insurance Policy. |
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1. All the loss due to the illegality or deliberation of the person who contracted the insurance or a person insured
2. Shipping delay loss due to characteristic defect or vice of subject-mattered insured.
3. Damage due to insecure packaging
4. Loss due to non-prepared necessary risk. Ordinary Loss or Trade Loss
5. Damage due to war, rite and strike
6. Accident due to insufficient capability of transport vessel's sailing. |
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| - If requires additional insurance premium according to a special agreement |
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1. Passing through a special danger zone: a war, a civil war, a rite, a strike
2. Trifling damage (Under 5% loss with grains and minerals, under 3% loss in others) |
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| b New regulation of committee |
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| Damage to be compensate |
ICC(C) |
ICC(b) |
iCC(A) |
| 1 Fire or Explosion |
O |
O |
O |
| 2 Vessel or a craft's strand. grounded. capsized. overturning |
O |
O |
O |
| 3 Overturning of land conveyance |
O |
O |
O |
| 4 Vessel. a craft. conveyance collision with other contact |
O |
O |
O |
| 5 Cargo unloading at the port of distress |
O |
O |
O |
| 6 Earth quate, volcanic activity . struck |
X |
O |
O |
| 7 General average sacrifice |
O |
O |
O |
| 8 Jettison |
O |
O |
O |
| 9 Washing Overboard |
X |
O |
O |
| 10 Vessel . a craft . hold. conveyance . container . Lift van Or in-flowing of river , lake and seawater to the storage area. |
X |
O |
O |
| 11 Total loss due to goods drop to a sea or on washing board in unit packages while unloading/loading to/from Vessel or a craft |
X |
O |
O |
| 12 All other extinction .Risk in all damage |
X |
X |
O |
| 13 General average . salvage expense |
O |
O |
O |
| 14 Both Blame Collision |
O |
O |
O |
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- In case with ICC(A), A/R exclusion items are not covered
c. New Old Committee Agreement's Risk covered comparison |
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| Damage to be compensate |
A/R |
ICC(A) |
W.A |
ICC(B) |
F.P.A |
ICC(C) |
| 1 Total loss |
O |
O |
O |
O |
O |
O |
| 2 General average |
O |
O |
O |
O |
O |
O |
| 3 Rescue expense |
O |
O |
O |
O |
O |
O |
| 4 Unusual expense |
O |
O |
O |
O |
O |
O |
| 5 Loss prevention expense |
O |
O |
O |
O |
O |
O |
| 6 Particular average due to strand, capsized, fire and collision |
O |
O |
O |
O |
O |
O |
| 7 Total loss of units at port of distress |
O |
O |
O |
O |
O |
O |
| 8 Total loss of units while unloading process |
O |
O |
O |
O |
O |
X |
| 9 Jettison |
O |
O |
O |
O |
O |
O |
| 10 Washing overboard |
O |
O |
O |
O |
X |
X |
| 11 Seawater damage due to foul weather |
O |
O |
O |
O |
X |
X |
| 12 Partial loss of others |
O |
O |
X |
X |
X |
X |
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| - The cases that can not receive compensation even if there is a accident |
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- Accidents occurred due to the insured assured
- Accidents occurred due to defects with packing on the subject-mattered insured |
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| 2. Extraneous Risks Conditions |
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a. By considering types of cargo, packing method an shipping method, additionally cover the bottom listed insurance terms with basic terms F.P.A., W.A or ICC(B), ICC(C) at lower insurance premium that has same effect as total risk terms coverage.
b. Types |
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- T.P.N.D (Theft. Pilferage & Non-Delivery)
- R.E.W.D (Rain and/or Fresh Water Damage)
- C.O.O.C (Contact with Oil and/or Other Cargo)
- Breakage
- Leakage and/or Shortage
- Sweat & Heating
- J.W.O.B(Jettison & Washing Over-Board)
- Hook & Hole
- Denting & Bending |
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- Inland transportation extension term : Additional terms to marine insurance policy of the risks of the land transportation.
- Inland storing extension term : In ordinary transportation process, a risk tern to extend the risk while warehousing intermediate storage or bonded storage more than the period indicated in the marine insurance policy (Export : 60 days after unloading from a vessel, Import: 30 days after unloading from the first arrival port). |
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- Separate rate is applied to the import/export cargo and calculate based on the condition of a vessel, sea route, types of cargo and the insurance terms.
- Flat rate (Port to Port), Ordinary rate (Additional risk rate, extension, risk term rate, surcharge rate) and composite in other rates. |
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- A person insured duty and a loss occurred to the subject-mattered insurance cargo : Immediately notify to the insurer. Methods to notify: Verbally (Telephone), Any written statement is acceptable but the filing of a claim for recovery in insurance for export cargo, a written notification of the loss may be necessary depends on the destination's custom.
| - Details of notification : |
a. Details of insurance contract (Policy number, detail list of the cargo, name of vessel, insurance premium amount and insurance terms etc.)
b. The condition of the damaged cargo
c. cargo storage location and the prearrangement thereafter. |
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| 2. Documents required for insurance claim |
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1. General average claim letter
2. Original or copy of insurance policy
3. Copy of B/L
4. Copy of commercial invoice
5. Copy of General average notification
6. Other documents (General average letter of certificate or General average security deposit, a pledge of General average, Valuation Form) |
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| b. In case with total loss and particular average |
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1. A letter of insurance claim (Attach detail statement of damage amount )
2. Insurance policy or insurance certificate in original or copy.
3. Commercial invoice (Signed duplicate)
4. Bill of lading |
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| <7> Examples of insurance calculation |
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| 1. Partial loss of Quantitative damage |
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| - If 1,000 units of refrigerators are covered as US$ 300,000 and 200 units of them are damaged while transportation for insurance and lost commercial value: Compensation amount is [U$ 300,000 X 200 units/1,000 units] U$60,000. |
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| 2. Partial loss of Quantitative damage |
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| a. Average Loss Settlement |
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- If 1,000 units of refrigerators are covered as US$ 300,000 and 400 of them declined for commercial value due to seawater damage. As the result of public sales, the total proceed was (Damaged value of 400 units by seawater damage) U$80,000 but the original value of the products is U$160,000 : Loss rate is [(U$160,000 - U$80,000) / U$ 160,000 = 1/2]
- Compensation amount : [Insurance amount for 400(U$ 120,000) multiply loss rate (1/2) is U$60,000] |
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| b. Salvage Loss Settlement |
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| - If 1,000 units of refrigerators are covered as US$ 300,000. While transportation, due to the peril insured again the total goods are damaged by submersion loss, unload the goods at intermediate port and decided the public sales is gainful at the site earned U$70,000 as net sales amount (New Proceed) : Compensation amount is [Deduct U$70,000 for saved goods net amount from the Insurance amount (U$ 300,000) which is U$230,000] |
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<8> Examples of marine loss claims
- Claim for Cargo Loss and/or Damage |
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Policy No :
Amount :
Shipment :
Conveyance :
We enclose here with documents in support of a claim for in the abovementioned shipment together with our claim statement amounting to
In this connection, we trust that you, upon examination, will find this in good order and justify in accordance with the terms of the above insurance policy issued for this goods.
In our opinion, this full set of claim documents can be accepted as sufficient proof of the above loss and /or damage.
Your settlement of the claim amount is anticipated at your earliest convenience.
Signature
Documents :
1. Claim Statement showing the Claim Amount
2. Survey Report of Other Certificate of Loss and/or Damage
3. Letter of Claim against Shipping Company and their Reply
4. Bill of Lading with Packing List
5. Commercial Invoice
6. Original Policy or Certificate of Insurance. |
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[2] Transport contract |
| (1) Basic understanding of transport |
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| <1> Sales terms and shipping duty |
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- A person arranging a vessel to transport cargo is the owner of the goods who will pay the transportation fee to the said vessel.
- Depends on the transaction of Seller & Buyer, the Seller sometimes arrange a vessel as per the other party's request even though the term is FOB. |
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| <2> The kinds of cargo and vessel selection |
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- If arranging a vessel :A vessel varies depends on the goods quantity and its kind
- General finished products, machineries etc : Grains, minerals and coals on the General Cargo Carrier or on the Full Container Ship (Bulk Cargo) : load on bulk carries. |
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| - In sea route, there is a Linear that regularly commission maintaining fixed period and a Tramper that changes its commission depends on its schedule in time. |
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| <4> Applying condition for Marine tariff |
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- The tariff is usually based on the said cargo's weight and capacity. And the higher calculation result which is tons by comparing the two become the standard for the tariff. (It is referred as Revenue ton)
- Apply conference freight shipping company's Tariff
- There are Basic Freight and Surcharge |
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| <5> Contacting with vessel companies |
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| - With a liners : It varies from region to region but contacting 2 weeks before the shipping date is allowed. (Shipment expiry date of L/C ). If Tramper is to be used for the shipment : Arrange a vessel at least 1~2 months prior. |
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| <6> Concluding a shipping contract |
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- A liner carrying general liners : A vessel company will issue a bill of lading using standard form which supplements a transportation contract.
- Agreement details on the back : It states the duty and responsibility of the involved parties to back up a possible dispute
- When transporting a Tramper cargo: A B/L is issued separately when a shipping document is prepared.
- Unlike Liner, professional knowledge or experience is required for a transportation contract therefore, advice from a marine company or a layer's support is recommended. |
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1 Booking
2 Submit a Shipping Request
3 Freight packaging and prepare for a delivery
4 Delivery and land transportation
5 Shipping Order
6 Mate's Receipt
7 Issue B/L
8 Receive B/L |
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| <8> Shipping procedure of FCL fright |
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1 Request for vacant container rental
2 stowing
3 Seal the container
4 land transportation
5 Container yard arrival and issue Dock Receipt
6 Issue Bill of Lading |
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| <9> LCL freight (Less Than Container Load ) : A shipper has to bring freight to CFS(container freight station) |
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| - Depends on the transportation, the level of cargo's safety is different. UCP
defines the following requisites of transportation documents per transportation
method. |
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| 1 Marine transportation documents (The Article No. 23-24 of UCP) |
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| - Ocean Bill of Lading, Non-negotiable Seaway bill |
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| 2 Mail transportation documents (The Article No. 29 of UCP) |
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| - Post Receipt(PR), Certificate of Posting, Courier Receipt |
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| 3 General transportation documents (The Article No. 26-28 of UCP) |
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| - Combined Transport Document(CTD), Airway bill(AWB),
Land transportation documents (Railroad cargo way bill,
Truck company transportation cargo way bill) |
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| <2> Marine transportation(B/L) |
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a. Evidence of contract
b. cargo receipt(transportation goods's shipping and evidence of documents received)
c. Entitled document(The right of bill )
d. Transfer acknowledgement based on endorsement (Order bill) |
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| 2 Acceptance conditions for marine transportation documents |
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| a Automatically accepting transportation documents |
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| - Automatically accepted by a bank if the transportation documents are equipped with the following terms |
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- Should be issued by the person in charge of transportation
(Actual Carrier) or the representative.
- Wording proving the goods on board shipping should be indicated.
- Full set of issued original transportation documents should be presented.
- Fulfil terms required by L/C. |
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| b Transportation documents that are not rejectable for acceptance |
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| - If B/L is equipped with requisites of transportation documents which will be
accept by B/L automatically, unless L/C refuse to accept in witting, banks
should accept the documents. |
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- Combined Transport Bill of Lading
- Short from B/L
- B/L displaying a place of receipt different from a shipping or a final
destination different from unloading port
- B/L issued subject to a cargo loaded in a transportation instrument like
a container. (unitized - cargo B/L)
- Intended clause B/L that added on board notation indication for on board shipping. |
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| c Special B/L accept by bank |
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- Through B/L : When transship is unavoidable, covering the whole sea route
by a single B/L (Almost all combine carrier uses this B/L)
- Third party B/L : B/L that display third parties as a consignee not an
exporter as in L/C (Intermediary Trade, Transfer L/C uses this B/L)
- Insurance covering Red B/L : A B/L with insurance coverage should mark
the necessary regulations with a red ink.
- Short Form N/L: B/L that omitted printing clause on the back side.
Accepting means, automatic acceptance as long as there is no specific
restrictions in L/C. |
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| d The kinds of B/L that are refuse to be accepted by a bank in principle. |
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1. charter party B/L: If the B/L issuer is a lessee not the owner of a vessel.
2. Sailing B/L : If the operating vessel is old vessel that operates only with a
sail (carrying vessel propelled by sail only B/L),
3. Stale B/L: If presenting to a bank after more than 21 days have been
elapsed from the B/L issue date.
4. Foul B/L or Dirty B/L : If defect status is indicated in the comment
section of a B/L.
5. Forwarder's B/L issued by transportation mediator: If the drawer of B/L is
a transport agent instead of a vessel company. |
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- If indicates it as agent for (qualified for representative), it is acceptable.
- For transportation companies, there are the shipping companies that
equipped with a vessel or without a vessel and it is called FORWARDER, VOCC(transportation brokerage) and if coinclude a transportation contract with a transportation brokerage (shipping request(S/R)) the transportation brokerage should conclude another transportation contract with a shipping company (Re-S/R)
cf-Contractual Carrier and Actual Carrier |
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6. Intended clause B/L) or Received B/L : If the shipping date is omitted
from the actual B/L but it has wording 'intended to be on board'. If add
shipping completion after loading on board, then it is acceptable.
1~3. are, either payment is unconditionally paid or refused as long as there
is no permission provision on L/C but 4~5 are B/L that are possible to
correct vice by presenting supplementing documents. |
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| e. Received B/L acceptance |
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- If a written provision requesting on board on L/C : Simple received B/L (the one without 'on board notation' ) may not be accepted.
- If there is not mention about on board but permits combined transportation:
Received B/L is acceptable. |
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| 2. B/L terms required by L/C |
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| a. full set B/L(The Sub-Article No. 23-A-iv of UCP) |
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- 3 sets of B/L are issued in general, and a vessel company use 1 set of those to delivery cargo, an purchasing bank request full sets(3 sets) to secure the said goods guarantee.
- If using air shipment method for transportation: Although L/C request full set of B/L, it is possible to just present one set of AWB(for shipper) because, on the original 3 sets of AWB, the each purpose for usage is indicated and when shipped, a airline company do not send the full set (3 sets of AWB) to an exporter. |
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- When receiving cargo for shipping, a vessel company indicates for any incomplete packing condition if found any in the remark section of B/L and such B/L is called Foul B/L(Dirty B/L) which bank refuse to accept. (The Article No. 32 of UCP)
- For Foul B/L, a Letter of Indemnity(L/I) is to be present to a vessel company to receive a clean B/L so a bank may accept.
- L/I(letter of indemnity) is a memorandum to change a foul B/L to clean B/L presented to a vessel company by an exporter, and the reason for the detail is for a consignee to take over all the responsibility if there is any problem caused by the damaged cargo.
- While transporting container, a vessel is to indicate an unknown clause as "Shipper's Load & Count" in the remark section of B/L and the B/L is consider as a Clean one (The Article No. 31 of UCP). |
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- B/L as received B/L, there are Shipped B/L(On Board B/L) are received B/L(Received B/L).
- Received B/L or Intended clause B/L : B/L issued while an export cargo is not loaded in a transportation vessel. - Combine transportation or container carrier : On board terms are very much mitigated to accept even received B/L.(The Sub-Article No. 32-c of UCP)
- On board B/L: It should be issued when the goods are loaded on board but usually, it is likely to be issued at the time of arrival in another words, the controllable time CY(container yard) which is after the transported goods are delivered by the carrier.
cf. Advance issued B/L and back-dated B/L |
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- In order to secure the negotiability of B/L, request transferable order B/L
according to an endorsement. |
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e. For notify party, it should be either an importer or a customs broker
nominated by an importer |
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- An exporter becomes normally, when a cargo arrive, a vessel sends a
arrival notice to a Notify Party. |
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| 3. The kinds of endorsement of B/L |
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| - Indicate "... endorsed to the order of xxBank 'Ltd". The consignee of B/L
is to be indicated in full name, and the nominated person by the
consignee's endorsement become a grantee of B/L . (Order with registering indication ) |
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| - A method to endorse in simple "order of A" or 'A or order' for endorsee and the consignee of B/L is not to be indicate here. |
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- Endorse after indicating "A or bearer" d blank endorsement
- If "endorsed in blank" or "blank endorsed' is indicated in L/C : Endorse bill, B/L or insurance documents without nominating a endorsee. |
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| <3> Other transportation documents |
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| a. Air waybills (Air line transportation form) |
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- Air line transportation bill is only a proof of consign. Unlike B/L, it does not
have a character like marketable securities, it is issued only as registered
and received method.
- Kinds |
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1. House AWB--transportation broker issue to a shipper.
2. Master AWB--A custom for airline to issue to the transportation broker.
Be advise that if there is not representative indication for the airline company, acceptance will be refuse. (The Sub-Article No. 27-a-i of UCP) |
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- Per IATA regulation, transship of cargo is a general rule with air transportation,
therefore, even of L/C prohibits transship in L/C in written statement, banks
accepts the transportation documents if it combined the whole transportation
as one transportation documents.(The Sub-Article No. 27-c of UCP)
- Original IATA airway bill |
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- Only For shipper portion can be presented even if L/C request full
set(3 sets).
1. original 1(for carrier)
2. original 2(for consignee)
3. original 3(for shipper) |
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| b. CTD or MTD(combined(multimodel) |
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- combined transportation refers to a transportation that a cargo is transporting using land road, sea route or waterway. Because of its special trait which one person takes responsible to transport for the entire route, and that it issue single transportation L/C, UCP also regulates this method separately from marine transportation.
- Those Intended B/L, and Forwarder's B/L that are likely to be refused for acceptance in marine transportation as a general rule, combined
transportation permit the acceptance and it takes Received B/L for granted and also acknowledges a special case in transship(Transshipment).
(The Article No. 26 of UCP)
- The following details are the reason why the combined transportation are handled differently from marine transportation in UCP. |
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1. The transportation documents are issued from the combine carrier taking in charge point and as long as L/C is not requesting in written statement, it doesn't necessary need to receive on board notation.
2. The carrier that received a initial cargo takes uniform liability of the entire transportation route.
3. Acceptable even if there is an indications "intended" related to vessel, shipping port and unloading port. But if L/C prohibits "intended" indication or if the name of vessel, shipping port and unloading port are clearly stated : Can not be accepted if on board notation is not received in the later time.
4. Acceptable even if L/C prohibits transship in written statement. Because combined transportation is preconditioning transship as per its
character. |
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1. Forwarder's B/L issued by a forwarder
2. FIATA B/L(international air transport association)
3. common carrier(NVOCC) B/L |
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| c. Non-negotiable seaway bill(non-negotiable marine transportation) |
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- B/L(Bill of Lading) is marketable securities for Seaway bill is a proof of documents of marine transportation that denied negotiation.
- The function is a simple consign of cargo and documents to proof
documents received.(The Article No. 24 of UCP).
- Acceptance requisites for Sea waybills |
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1. Should be issued as the carrier , a commender or a qualified
representative.
2. On the transportation form, there should be clear indication that the goods
are on board of vessel.
3. If "Intended" indication is on the vessel, port, on board section of the transportation form, supplement this as a on board notation.
4. Original full set issued should be presented.
5. Charter or a sailor boat should not be indicated in transportation form. |
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| d. road, rail or inland waterway transport document |
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- If marine transportation is impossible due to import location is in the center of inland, the cargos may be transport using land road or waterways.
- Requirements for the transportation documents (The Article No. 28 of UCP) |
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1. should be issued as the carrier or the qualified representative.
2. While transportation, I received of cargo date is indicated, it is regarded as the cargo loaded date.
3. Although orignal indication is not on transportation documents, regard it as original and accept.
4. Although transship prohibition indication is in L/C, as long as entire transportation route is covered by the same transportation documents, the transship prohibition exception is acknowledged. |
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| e. courier and post receipts |
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- Small cargo and documents are to be delivery by courier and post delivery companies as a practice. In respecting the practice of circles UCP accepts the contents. (The Article No. 29 of UCP)
- Acceptance requisites for the documents |
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- The nominated post office by L/C should stamp on a post receipt
- Post receipt date is regarded as the dispatching date. |
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- The service rendering company's name should be on the delivery receipt by kind of stamps.
- Cargo received date should be on the receipt, ad the part is regarded as the dispatching date. |
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| f. Transport document issued by freight forwarders |
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- Forwarder's B/L and House B/L issued by a transportation broker will be refused by a bank for acceptance if not equipped with the special requisites
- UCP Article No. 30 regulates the acceptance requisites of the transportation documents issued by Forwarders in the separate text. |
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1. The name of the transportation broker should be indicated as the carrier or as a qualified representative.
2. Must meet all the terms required by L/C. |
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| <1> Marine transportation |
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- Varies from a liner, tramper, a bulky cargo and freight packaging
- Transportation by a container : There are following methods depends on the cargo CFS/CFS transportation, CFS/CY transportation, CY/CFS transportation, CY/CY transportation |
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| <2> Inland transportation |
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- Inland transportation can be understand by transportation preparation and the transportation process to the shipping port (Bonded transportation).
- Preparing transportation : Measuring/mark and export packaging, customs clearance, container stowing process. transportation process: The destination for FCL freight is CY and CFS for LCL.
- 20F container is 25CBM, if 40F container is 55CBM generally process it as FCL freight. |
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| <3> Multi-modal transportation |
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Ex-Import Procedure(to Way of Payment)
Export-Import procedure according to the Irrevocable Documentary Credit method
Insurance and Transportation Contract
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