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The
Merchants
Guide
2003 Edition
The Merchants Guide
2003 Edition

This is a guide in simple terms for practitioners in International Trade,

particularly those involved with liner shipping in the combined transport
industry. It provides guidance on the documentation of International Trade,
with particular reference to contracts of carriage and the liability provisions
therein as well as their function as a document of title. It is designed for use
as a source of reference and a training aid for our Customers' staff.

Whilst every effort has been made to ensure

that the information contained in this Guide
is correct, neither the Authors, Editor nor
P&O Nedlloyd can accept any responsibility
for any errors or omissions nor for any
consequences resulting therefrom.
INTRODUCTION

Welcome to the to 2003 Edition of The Merchants Guide. I am honoured to have

been asked to edit the update of this brochure, which has become a standard
work of reference in the industry, despite no longer being in .full-time
employment with P&O Nedlloyd. On account of no longer being in daily contact
with the industry, I have necessarily had to rely more heavily upon my friends,
colleagues and contacts in the industry to update me on changes since the last
edition and I acknowledge with gratitude my debt to the many persons whose
contributions have enabled me to undertake this task. They are too numerous to
mention them all but I must make particular reference to two of my ex
colleagues at P&O Nedlloyd, without whom this would have been an impossible
task: Anne Maree Behm (now with The West of England P&I Club) and Mike
Cunningham (Assistant Manager, Insurance and Claims Dept., P&O Nedlloyd).

The areas covered by the Guide where there has been the most activity since the
Millennium Edition are debate on a new international convention on the law
relating to Carriers’ liabilities for the Carriage of Goods by Sea (COGSA), the
drive towards eliminating paper from international trade to create fully
electronic transactions by facilitating Electronic Credits (instead of Documentary
Credits) and the inevitable reaction by the U.S. following the 11th September
2001 catastrophe with a plethora of regulations that only a super power like the
U.S. could hope to enforce (more details in Part 1 Section 7B & Part 2 Section 4).

On the subject of COGSA, although debate has commenced and is well advanced
in an attempt to reconcile the supporters of the Hamburg Rules with those of the
Hague-Visby Rules, there are already political differences of opinion as to where
responsibility for the review should lie. UNCTAD (in Geneva) and UNCITRAL
(in Vienna) both feel that they should have control, with CMI co-operating with
UNCITRAL in an endeavour to produce a suitable convention. CMI feels that
any new convention must operate on a door-to-door basis but there are some who
prefer a port-to-port regime. This would be less attractive to Merchants, who are
concerned only that their goods are lost or damaged, rather than establishing
where loss or damage occurred in order to determine the level of recourse to
which they are entitled. A consistent approach to liability, regardless of location
of loss/damage, is the only approach that makes sense to them. Unfortunately
this approach leaves the problem of the Combined Transport Operator being
liable to his customer under one regime (multi-modal), but with recourse to his
sub-contractors under different (probably inferior) regimes (uni-modal) giving
him less than full indemnity for his sub-contractors’ sins.

Accordingly, as there are still several points of principle yet to be resolved,

whilst things are on the move, we are almost certainly several years away from
any changes taking effect and, for the time being, it is very much a case of watch
this space to see which way things are developing.

More progress has been made in the electronic credit arena, in that at least
three alternative solutions are presently on offer: Bolero, @GlobalTrade and
Tradecard but at present there appears to be a marked reluctance by Traders to
take up any idea which departs from the use of their beloved Bill of Lading as a
document of title, a necessary move as any procedure reliant upon a document of
title must, by definition, involve paper at some stage, thereby breaking the
electronic chain (more details in Part 1 Section 9).

I trust that you will find this 2003 Edition a worthy successor to its predecessor.

2003 Edition
published
April 2003

J. W. RICHARDSON
F.C.I.I. EDITOR
CONTENTS

PART 1 INTERNATIONAL TRADE

1. TRADE CONTRACTS
Trade Contracts...................................................................................... 1

2. COMBINED TRANSPORT TERMINOLOGY

A Combined Transport/Multimodal Transport Document ................. 2
B Through Transport Document .......................................................... 2
C P&O Nedlloyd Bill of Lading ............................................................ 2
D Comparison with Conventional Bill of Lading ................................ 2
E Terminology of CT Movements ......................................................... 3

3. SALES CONTRACT & INCOTERMS

A Sales Contract.................................................................................... 5
Vienna Convention ................................................ 5
B INCOTERMS ..................................................................................... 6
Decision Chart for the Buyer................................ 8
Decision Chart for the Seller ................................ 9
Cost Distribution between Seller & Buyer:
All Modes of Transport ......................................... 10
Sea Transport only ................................................ 11

4. LETTERS OF CREDIT (Contract of Finance & UCP500)

A Contract of Finance ........................................................................... 12
(i) Opening the Credit....................................... 12
(ii) Advising the Credit ...................................... 13
(iii) Presentation.................................................. 13
(iv) Bill of Lading as a Document of Title ......... 15
(v) Payment:
Sight Payment .............................................. 16
Deferred Payment ........................................ 16
By Acceptance............................................... 16
By Negotiation.............................................. 16
Alternative Trading Arrangements.................................................. 16
Open Account Trading .......................................... 16
Payment in Advance ............................................. 16
Documentary Bills................................................. 16
Summary of Procedure ...................................................................... 17
 B Documentary Credits & UCP500 ..................................................... 18
Signature ............................................................... 19
Shipped on Board endorsements.......................... 19
No Transhipment .................................................. 20
“Original” Documents ........................................... 20
Clean Transport Documents................................. 20
Commercial Invoices ............................................. 20

C eUCP................................................................................................... 20
D Recommendations .............................................................................. 21
E Summary ............................................................................................ 21
ICC Publications ................................................................................ 22

5. CONTRACT OF CARRIAGE: BOOKINGS & EXPORT DOCUMENTATION

A Exports in the U.K............................................................................. 23
(i) Shipping Instructions .................................. 23
(ii) U.K. - SSN .................................................... 23
(iii) Dangerous/Hazardous Goods....................... 24
(iv) Customs Requirements ................................ 24
B Exports in the U.S. ............................................................................ 24
(i) U.S. - ECSI ................................................... 24
(ii) U.S. - Receipt for Carriage .......................... 25
(iii) Value Added Services................................... 25
(iv) Dangerous/Hazardous Goods....................... 25
(v) Intermodal Safe Container Act ................... 25
(vi) Customs Requirements ................................ 26
C Clauses and Certificates that may cause problems ........................ 26
(i) Certificate of Cover in a P&I Club .............. 26
(ii) Certificate of Vessel's Age............................ 26
(iii) Temperature Clausing ................................. 26
(iv) Values in Bills of Lading ............................. 28
(v) Supplementary Documents and Clauses .... 28
Track & Trace............................................... 28

6. CONTRACT OF INDEMNITY & CONCISE

Full Liability Bill of Lading................................................................... 29
CONCISE................................................................................................ 29
Contingency Cover ................................................................................. 30

7. IMPORT PROCEDURES
A Imports in the U.K. ........................................................................... 31
(i) Notice of Arrival ........................................... 31
(ii) Invoice ........................................................... 31
(iii) Commercial and Statutory Restraints........ 31
(iv) Customs Clearance....................................... 31
(v) Bill of Lading ................................................ 32
 B Imports in the U.S. ............................................................................ 32
(i) Arrival Notice ............................................... 32
(ii) Customs Clearance....................................... 32
(iii) Bill of Lading ................................................ 33
(iv) Payment of Charges ..................................... 33
(v) Imports into U.S. from China with Solid
Wood Packing ............................................... 33
Track & Trace............................................... 33

8. MERCHANTS' CHECKLIST
Shippers' Checklist ............................................................................ 34
A Documentary...................................................................................... 34
B Physical .............................................................................................. 34
Consignees' Checklist ........................................................................ 35

9. STRAIGHT BILLS, WAYBILLS & E-COMMERCE

A Straight Bills...................................................................................... 37
Specimen Waybill .............................................................................. 38
B Waybills.............................................................................................. 39
(i) Introduction .................................................. 39
(ii) The Waybill Approach to e Commerce........ 39
(iii) Conclusion..................................................... 43
(iv) Advantages of Using Sea Waybills ............. 43
C E-commerce ........................................................................................ 44
(i) Bolero ............................................................ 44
(ii) @GlobalTrade................................................ 45
(iii) Tradecard...................................................... 45

PART 2 CONTRACTS OF
CARRIAGE
1. BILLS OF LADING
A What is a Bill of Lading?................................................................... 46
B Clauses found in Conventional Breakbulk Bills of Lading but
not in the P&O Nedlloyd Document................................................. 46
(i) Demise/Identity of Carrier Clause .............. 46
(ii) Transhipment Clause................................... 46
(iii) Lighterage Clause ........................................ 46
C Why is the Carrier so fussy about the Detail in a Bill of Lading? . 47
(i) Temperatures ............................................... 47
(ii) Dates ............................................................. 47
(iii) Detail............................................................. 47
D The Face of the P&O Nedlloyd Universal Bill of Lading................ 47
Specimen P&O Nedlloyd Universal Bill of Lading.......................... 49
 E The Face of the P&O Nedlloyd North American Bill of Lading ..... 51
Specimen P&O Nedlloyd North American Bill of Lading............... 52

2. THE P&O NEDLLOYD CONTRACT OF CARRIAGE

A Introduction ....................................................................................... 55
B Bill of Lading Terms and Conditions ............................................... 55
Specimen Bill of Lading Terms and Conditions .............................. 56

3. INTERNATIONAL CONVENTIONS RELEVANT TO COMBINED

TRANSPORT
INTERNATIONAL CONVENTIONS ................................................... 63
PARTIES WHO PREPARE CONVENTIONS...................................... 63
CMI ....................................................................... 63
UNCITRAL ............................................................ 63
UNCTAD................................................................ 64
IMO ....................................................................... 64
A Sea Carriage ...................................................................................... 64
(i) Hague Rules ................................................. 64
(ii) Hague Visby Rules ....................................... 64
(iii) Hamburg Rules ............................................ 66
Current Developments................................. 67
(iv) LLMC ............................................................ 68
(v) LOF 2000 and York Antwerp Rules '94...... 70
(vi) HNS............................................................... 70
(vii) ISM................................................................ 71
(viii) IMDG ............................................................ 71
B Land Carriage .................................................................................... 71
(i) CMR .............................................................. 71
(ii) COTIF/CIM................................................... 72
C Air Carriage: Warsaw Convention ................................................... 72
D Combined Transport.......................................................................... 73
(i) ICC Rules for a Combined Transport Document 73
(ii) UNCTAD MMO Convention........................ 73
(iii) UNCTAD/ICC Rules for Multi Modal Transport
Documents .................................................... 74
(iv) ICC - Assessment of “contentious text of the
MTConvention”............................................. 74
(v) European Union - Intermodal Liability...... 74
(vi) CSC Convention ........................................... 75

4. NATIONAL LAWS RELEVANT TO COMBINED TRANSPORT -

LATEST NEWS
Australia............................................................................................. 76
Austria................................................................................................ 77
Canada ............................................................................................... 77
Chile ................................................................................................... 77
China .................................................................................................. 77
Croatia................................................................................................ 77
Czech Republic................................................................................... 77
 Egypt .................................................................................................. 77
Georgia ............................................................................................... 78
Germany............................................................................................. 78
Greece ................................................................................................. 78
India ................................................................................................... 78
Japan .................................................................................................. 78
Korea .................................................................................................. 78
Lebanon .............................................................................................. 78
Romania ............................................................................................. 79
Russia ................................................................................................. 79
Saudi Arabia ...................................................................................... 79
Scandinavia........................................................................................ 79
Slovakia .............................................................................................. 79
South Africa ....................................................................................... 79
UAE .................................................................................................... 79
Ukraine............................................................................................... 79
United Kingdom................................................................................. 80
U.S. ..................................................................................................... 80

5. STANDARD TERMS AND CONDITIONS FOR NATIONAL

CARRIAGE IN EUROPE
A United Kingdom................................................................................. 84
(i) RHA............................................................... 84
(ii) Freightliners ................................................. 84
(iii) Containerbase Conditions............................ 84
(iv) BIFA.............................................................. 84
(v) UKWA ........................................................... 85
B Continent of Europe - Road Haulage (Trucking)............................. 85

6. MERCHANTS INDEMNITIES
A Indemnities in Bill of Lading............................................................ 87
B Specific Indemnities outside the Bill of Lading Contract ............... 88
(i) Duplicate Bills or Delivery without Bills ... 88
(ii) Clean Bills for Discrepant Goods ................ 89

7. CARGO CLAIMS
Cargo Claims .......................................................................................... 90

8. SECURITY SEALS
A Hardware ........................................................................................... 92
B Use & Application.............................................................................. 93
C Sealing: Advice & Procedures ........................................................... 93
(i) Exporters ...................................................... 93
(ii) Importers ...................................................... 94
9. GENERAL AVERAGE AND SALVAGE
A General Average ................................................................................ 95
B Special Charges ................................................................................. 97
C Salvage ............................................................................................... 97

PART 3 APPENDICES
1. STANDARD TRADING CONDITIONS 1997 ...................................... 98
2. CMI UNIFORM RULES FOR SEA WAYBILLS.................................. 107
3. CMI RULES FOR ELECTRONIC BILLS OF LADING ...................... 109
4. GLOSSARY............................................................................................. 113
Part 1 International Trade
Section 1: Trade Contracts
For a proper appreciation of the documentation of International Trade it is necessary to have a clear
understanding of the principal contracts involved in the process, the identities of the parties involved
with those different contracts and which rules or laws apply to which of those contracts. Unfortunately
this is a matter on which many are unclear, so let us start by getting these points clear in our minds as a
sound base from which to study this process.

This is best achieved in chart form as follows:

Contract Parties Involved Applicable Law/Rules

SALE Seller (Shipper) and INCOTERMS 2000
(Invoice) Buyer (Consignee)

FINANCE Bank and Buyer UCP500 & (where

(Letter of Credit) transferring to Seller applicable) eUCP

CARRIAGE Carrier and Seller Hague/Hague-Visby Rules

(Bill of Lading or Waybill) transferring to Buyer or Hamburg Rules

INDEMNITY Insurer(s) and Seller Marine Insurance Act 1906

(Insurance Certificate) and/or Buyer

Study this chart carefully. The Sale Contract is can have responsibilities under that contract so,
separate from (although allied to) the Contract of for example, the Carrier has no responsibilities
Finance. The Contract of Carriage incorporates under the Contract of Finance to comply with
terms of recourse as an incentive to care to the UCP500, that is a matter between the Bank and
Carrier but it is not a Contract of Indemnity, the Buyer/Seller, nor under the Sale Contract to
which requires totally different criteria. comply with INCOTERMS, which are solely a
INCOTERMS are relevant only to the Sale matter between Seller and Buyer.
Contract and have absolutely nothing to do with
If the information in this chart is borne in mind
the Contract of Carriage (to talk of an FOB or
the advice in the ensuing sections will be more
CIF Bill of Lading is a nonsense). Similarly only
readily comprehensible.
someone who is a party to one of the contracts

1
Part 1
Section 2: Combined Transport
Terminology
A Combined Transport Document (CTD) be required by Merchants. According to how the
Multimodal Transport Document (MTD) Bill of Lading is prepared, every variety of
Two names for the same document. This is a carriage can be covered. The flexibility of the
document issued by a Combined/Multimodal P&O Nedlloyd Bill of Lading is explained in Part
Transport Operator (CTO/MTO) that covers the 2 Section 2B, Clause 6: Carrier's Responsibility -
multi-modal transport on a door-to-door basis in Combined Transport.
one contract of carriage. The CTO/MTO, by
The policy of the company is that, whilst they
issuing the CTD/MTD, undertakes to perform, or
are willing to issue a Bill of Lading covering the
in his own name carry out the performance of,
entire transit from anywhere to anywhere, they
the Combined/Multimodal Transport. Thus a
restrict the application of Combined Transport
CTD/MTD is a document issued by a Carrier who
liability from/to those areas where they have
contracts as a principal with the Merchant to
representation and control. Since the merger of
effect a Combined/Multimodal Transport.
P&O and Nedlloyd, these areas are now much
Therefore the CTO/MTO issuing the CTD/MTD
wider than applied to either company
is primarily liable to the Merchant under the
beforehand, so the areas not covered by
terms of the CTD/MTD throughout carriage.
Combined Transport are relatively few and far
between. However, where there is a requirement
B Through Transport Document (TTD) to issue Bills either from or to an area that does
The TTD is a contract of carriage involving more not qualify, a suitable Transhipment Clause is
than one Carrier. The Carrier who issues the added to the face of the Bill making P&O
TTD acts as a principal only during the carriage Nedlloyd a TTO instead of a CTO for the period
on his own vessel(s) and as an agent only at all whilst the goods are in the hands of a carrier
other times. Therefore the liabilities and outside a Combined Transport area. Being on the
responsibilities are spread over several Carriers face of the Bill and not the reverse, any such
and the Merchant is in contract with different deviation from the normal pattern of liability is
Carriers under different (and probably unknown) clearly drawn to the attention of the Merchant.
conditions at different stages of carriage.
D How the P&O Nedlloyd Bill of Lading
Many so called CTDs/MTDs are in fact, by the
compares to Conventional Break-Bulk
above definitions, TTDs, so the fact a Bill of
Bills of Lading
Lading bears the wording “Combined Transport
Document / Bill of Lading” is no guarantee that Most conventional Bills are drafted as “shipped
it is so. Only examination of its terms and on board” documents as traditionally Merchants
conditions will reveal it in its true colours. have required “shipped” Bills of Lading. This is
because, until the goods are shipped, the Carrier
accepts no liability for them and the Merchant
C P&O Nedlloyd Optional Combined
cannot be sure that they have commenced transit
Transport or Port to Port Bill of Lading
towards the Buyer. Therefore it is standard
The P&O Nedlloyd document is designed to cover practice for the Buyer to require a “shipped” Bill
all the possible variations of service which may in his Letter of Credit to protect his position.

2
By contrast, when a P&O Nedlloyd Combined shipping) so that the inland movement prior and
Transport Bill of Lading is issued, unless clearly subsequent to sea carriage is effected by the
claused on the face to the contrary, the Carrier is Merchant.
liable as soon as his sub-contractor has received
It is possible to encounter movements involving
the goods from the Merchant. The Merchant can
more than one basis. Thus “Door (or
rest assured that the goods are in transit to the
House)/Depot” would describe a movement
Buyer as well as being at the risk of the Carrier
starting at the Shipper's premises and finishing
at all times until delivery, subject, of course, to
at the CFS in the importing area. Once details of
the terms of the contract of carriage.
FCL or LCL are added, a full picture of the type
If necessary the “Shipped on Board” of movement is possible from a short description.
endorsement can be applied once the goods have For instance:
been shipped.

“FCL Door (or House)/LCL Depot” would

E Terminology of CT Movements describe a movement where a haulier (trucker),
This is an area where there is substantial scope who is the sub-contractor of the Carrier, takes an
for confusion between the U.S. and the rest of empty container to a Shipper's premises for the
the world as the terminology used is often Shipper to pack, after which he takes the loaded
different. Accordingly care is necessary when container back to the Container Yard (CY) for
using these terms in a Transatlantic injection into the Operator's Combined Transport
communication to ensure that both parties' system for the trade. At the importing end, the
interpretations of the discussion coincide. loaded container would then be unpacked at the
CTO's Depot by the subcontractor of the Carrier,
This confusion is compounded by the fact that, in who would effect delivery at the Depot to the
the North American Trade, the U.S. terms are Consignee (or his agent) for carriage to the
frequently used in Europe as well as in the U.S. Consignee's premises. The CTD in this instance
instead of the European terms, which are used in would cover movement between Shipper's
all other European based trades! premises and the importing Depot and, subject to
the CTD terms and conditions, the CTO would
In Europe & the rest of the World
accept responsibility for the goods from the time
All of these terms are OPERATIONAL terms
of receipt of the loaded container at the Shipper's
whereas, in the U.S., some are operational and
premises until the time of delivery of the
some are Tariff. These are terms in general use
unpacked goods to the Consignee's haulier at the
OUTSIDE of the U.S.
importing depot. Thus (for example):
“House” or “Door” A movement starting or
“LCL Door/LCL Depot” Carrier collects from
finishing at the Customer's premises. Thus
Shipper, takes to Depot for groupage and
“House/House” or “Door/Door” starts at the
delivers to Consignee at importing Depot.
Shipper's premises and ends at the Consignee's
premises (i.e. a true Combined Transport “FCL Port/FCL Depot” Carrier receives from
movement) with the Carrier accepting primary Shipper at vessel's side a container packed by
responsibility as a Principal Carrier throughout. Shipper and delivers same to Consignee at
Take particular care with these terms and note importing Depot, for Consignee to take away to
different U.S. meanings. own premises for unpacking. Empty container is
subsequently returned to Carrier at the
“Depot” A movement starting or finishing at a
importing Depot (or elsewhere as may be
Container Freight Station (CFS) so that delivery
agreed).
to or collection from the Depot is effected by or
on behalf of the Merchant. In the U.S.
“Ocean” (represented by the letter “O”)
“Port” A movement starting or finishing at the
indicates that goods are packed into/discharged
vessel's side (as with conventional breakbulk
from a container by the Merchant, who delivers

3
the loaded container to or receives the loaded movement.
container from the Carrier at the Carrier's Ocean
“Point”” (no letter designation). Point is a
Terminal. Thus O/O indicates (by European
Tariff term that is the same as Door (so “D” is
equivalent) FCL Port/FCL Port. This is a Tariff
used as the Bill of Lading designator). The only
and an operational term.
difference is that with Door a full name and
“House” (represented by the letter “H”) is an address of Shipper/Consignee is provided,
operational term used to indicate a movement whereas with Point an address only is provided.
starting (or finishing) at the Shipper's
“Rail” (represented by the letter “R”)
(Consignee's) premises but for which the Shipper
indicates that the Merchant delivers exports to
(Consignee) provides the transport to (from) the
the Carrier and receives imports from the
Ocean Terminal.
Carrier at the railhead where the rail operator,
It has no Tariff implications. acting as the agent of the Carrier,
receives/delivers the container from/to the
“Pier” (represented by the letter “P”) is the
Merchant. There is no European equivalent. A
LCL equivalent of the European term “Port”
Tariff and operational term.
indicating receipt of breakbulk goods by the
Carrier at the port for loading into the container “Motor” (represented by the letter “M”) is
by the Carrier or discharge from the container by the same as “Rail” excepting that a motor
the Carrier at the port of discharge for collection trucker is involved instead of a railroad.
from the port by the Merchant. Thus P/P
It should be borne in mind that there are no
indicates (by European equivalent) LCL
Inland Clearance Depots in the U.S. so that, so
Port/LCL Port. It is a Tariff and an operational
far as the Carrier is concerned, away from the
term.
Ocean Terminal all consignments are FCL only.
“Door” (represented by the letter “D”) Any LCL Merchants would need to use the
indicates that the Carrier delivers an empty services of a third party groupage agent if they
container to the Merchant's premises for packing wanted goods containerised locally or a Freight
or a loaded one for discharging. Thus D/D Forwarder to arrange collection/delivery from/to
indicates (by European equivalent) FCL the port if they wanted a P/P movement.
Door/FCL Door. It is a Tariff term and indicates
that freight quoted includes the relevant inland

4
Part 1
Section 3: Sales Contract &
INCOTERMS
A SALES CONTRACT point of view, it would be prudent to give a little
The Sales Contract is arranged between the more consideration to drafting the Sales
Seller and the Buyer (or more precisely between Contract carefully to ensure that the Letter of
the Seller's salesman and the Buyer's Credit spawned from it does not contain onerous
procurement manager). It frequently occurs that terms, with which the shipping manager will
the salesman does not know his shipping have difficulty complying. The salesman needs to
manager colleague and gives no thought be briefed properly on what terms he should aim
whatsoever as to how he can make his colleagues to secure in the Sales Contract and those upon
task easier. All he is concerned with (the which he can compromise (and to what degree)
culmination of all his sales training!) is to close and those upon which he cannot, without prior
the sale to count towards meeting his target approval. He needs to understand the reasons for
and/or earn his commission. Therefore any these restrictions so that he can debate their
restrictions which the shipping manager may acceptance with Customers in a knowledgeable
wish to avoid in the Sales Contract but which fashion. In short, a salesman needs to have an
the Buyer wants in are invariably resolved in appreciation of the commercial process, as well
favour of the Buyer without a second thought, as his product, and both he and the shipping
however unreasonable or defunct they may be. manager could benefit from regular dialogue
with resultant benefit accruing to both parties
The point is that the shipping manager has the and the Seller.
task of procuring compliance with the terms of
the Letter of Credit based on the Sales Contract Vienna Convention: There is an International
if the Seller is to be paid and the Sales Contract Convention governing contracts for the
is the Seller's only opportunity to control what International Sale of Goods: the Vienna
the Buyer puts into that Letter of Credit. The Convention on the International Sale of Goods,
sorts of points that might help the Seller's 1980, which applies to contracts which apply the
shipping manager are that no outdated law of a contracting state. Approximately 60% of
requirements are included. An example is “no worldwide trade involves contracting states so
transhipment” (see Part 1 Section 4B for details) the Convention is one of which to be aware. It
and, if shipment is with a Combined Transport applies to most cargoes but specifically excludes
Service, that a Combined Transport Bill of consumer goods, securities, ships & aircraft and
Lading/Document is called for instead of a electricity, and specified contracts (auctions or
Marine Ocean Bill of Lading, which is a port-to- judicial sales). The Convention governs the
port only contract. Use of the correct Combined formation of the contract and attendant rights
Transport INCOTERM (see B below) will ensure and obligations of the parties but not the legal
less chance of the sort of dispute which could validity of the contract, matters relating to title
arise with the outdated conventional and certain liability matters. The terms of the
INCOTERMS, such as FOB, CFR and CIF, Convention are not mandatory and may be
which is explained in B below. varied by agreement. At present the U.K. is not
a signatory to this Convention.
A successful export is one where the Seller has
been paid in full on time, so, from the Seller's

5
B INCOTERMS the vessel. With containers, inspection of goods
INCOTERMS are a set of uniform rules codifying at shipside is not possible, so that FOB, CFR
the interpretation of trade terms defining the (C&F) and CIF are inappropriate. The ICC have,
rights and obligations of both Buyer and Seller accordingly, drafted three Combined Transport
in an international transaction, thereby enabling equivalents, which you are advised to use when
an otherwise complex basis for a Sales Contract availing yourself of Combined Transport services
to be accomplished in three letters. INCOTERMS if you wish to avoid disputes. They are FCA, CPT
are drafted by the International Chamber of and CIP, for which risk transfers from Seller to
Commerce (the ICC, not to be confused with the Buyer at the inland place at which the Carrier
U.S. Interstate Commerce Commission, which is takes charge of the goods. INCOTERMS can be
also referred to as the ICC) and, on the 1st divided into recommended usages by mode of
January 2000, a new set of rules were published carriage. The division recommended by the ICC
as INCOTERMS 2000, which detail the following is:
INCOTERMS in order of minimum to maximum
All modes (i.e. Combined Transport)
risk for the Seller.
EXW, FCA, CPT, CIP, DAF, DDU, DDP

Conventional Port-to-Port/Sea Carriage only

The 13 Incoterms 2000
FAS, FOB, CFR, CIF, DES, DEQ

EXW Ex Works...(named place) You are strongly recommended to equip yourself

with either INCOTERMS 2000 (ICC Publication
FCA Free Carrier...(named place) 560) or the more comprehensive explanatory ICC
FAS Free Alongside Ship (named port of GUIDE TO INCOTERMS 2000 (ICC Publication
shipment) 620). These are obtainable from your local ICC
FOB Free On Board (named port of representative. For example
shipment)
in the U.K. this is:
ICC United Kingdom
CFR Cost and Freight (named port of
14/15 Belgrave Square, London SW1X 8PS
destination)
Telephone: 020-7823-2811
CIF Cost, Insurance and Freight...(named
Fax: 020-7235-5447
port of destination)
Website: www.iccuk.net
CPT Carriage Paid To...(named place of
destination) in the United States it is:
CIP Carriage and Insurance Paid to...(named ICC Publishing Co.,
place of destination) 156 Fifth Avenue, Suite 820,
New York, NY 10010
DAF Delivered At Frontier...(named place) Telephone: (212) 206-1150
DES Delivered Ex Ship...(named port of Fax: (212) 633-6025
destination)
DEQ Delivered Ex Quay (duty paid)...(named whilst in France it is:
port of destination) ICC Publishing S.A.
DDU Delivered Duty Unpaid...(named place of 38, Cours Albert 1er
destination) 75008 - Paris (France)
DDP Delivered Duty Paid...(named place of Telephone: 49.53.29.23
destination) Fax: 49.53.29.02

The ICC international website is

INCOTERMS are designed to arrange for the
“www.iccwbo.org”, from whence other national
transfer of risk from Seller to Buyer at an
committee websites can be identified.
unambiguous convenient place where goods can
be inspected. Hence FOB, CFR (C&F) and CIF Using the appropriate INCOTERM is important
arrange for this to occur upon loading on board and a good example is as follows. Consider a

6
contract applying FOB or CFR (C&F) take the particular circumstances of sale, the
INCOTERMS for a containerised shipment of prevailing commercial situation etc. into account.
goods where the risk transfers from Seller to Two charts are shown, one for the Seller and one
Buyer on loading on board. At destination for the Buyer. The final choice of the
damage is discovered. It is impossible to INCOTERM used in the contract is for
ascertain whether damage arose before or after negotiation between Buyer and Seller; however
shipment. Under FOB/CFR (C&F) INCOTERMS, there are occasions when the choice of
a dispute would ensue. Under FCA/CPT INCOTERM is stipulated by outside factors. For
INCOTERMS it would be clear that the risk example, in order to preserve foreign exchange
would be with the Buyer once the goods are in and national shipping interests, a government
the hands of the Combined Transport Operator may require all imports to be bought on an FOB
(CTO) for carriage. (See Diagram on Page 20.) basis, and all exports sold on CIF. In some
commodity trades there are standard
USE OF CORRECT INCOTERMS PREVENTS
international contracts of sale which relate to
DISPUTES.
specific INCOTERMS. In these circumstances
Choice of INCOTERMS neither the Buyer nor the Seller has any choice
to make. However, in most cases the Buyer and
The charts overleaf are included for guidance
Seller can choose the amount of responsibility
purposes only. When choosing which
and risk appropriate to their contract.
INCOTERM to use, the Buyer and Seller should

NOTE:
Under INCOTERMS, where the Seller is responsible for arranging insurance (e.g. CIF/CIP), the
obligation, unless qualified to the contrary, is to arrange cover on minimum terms only (e.g. total loss as
in IUA ICC Clauses C). To avoid this stipulate cover required in the Letter of Credit (e.g. Cover required
on IUA ICC Clauses A plus War (WSRCC)).

7
Incoterms 2000
DECISION CHART FOR THE BUYER

8
Incoterms 2000
DECISION CHART FOR THE SELLER

9
Incoterms 2000
COST DISTRIBUTION BETWEEN SELLER & BUYER

ALL MODES OF TRANSPORT

.. .. .. .. .. .. DDU

.. .. .. .. .. .. EXW
.. .. .. .. .. .. DDP

.. .. .. .. .. .. DAF

.. .. .. .. .. .. CPT

.. .. .. .. .. .. FCA
.. .. .. .. .. .. CIP
S = Seller pays

B = Buyer pays

Cost heading
Loading at seller's premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S S B
Domestic precarriage/Local cartage (after delivery to Carrier) . . . . . S S S S S B B
Contract of carriage and dispatch . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B B
Trade documentation in country of exportation . . . . . . . . . . . . . . . . S S S S S S B
Customs clearance in country of exportation . . . . . . . . . . . . . . . . . . S S S S S S B
Export charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S S B
Terminal handling charge at port of loading . . . . . . . . . . . . . . . . . . S S S S S B B
Loading at carrier's terminal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B B
Transportation equipment and accessories . . . . . . . . . . . . . . . . . . . . S S S S S B B
Transport (Cargo) insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - S - - -
International main carriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B B
Unloading at terminal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B B
Terminal handling charge at port of discharge . . . . . . . . . . . . . . . . . S S S S S B B
Trade documentation in country of transit/importation . . . . . . . . . . S B B B B B B
Customs clearance in country of importation . . . . . . . . . . . . . . . . . . S B B B B B B
Import charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S B B B B B B
Local charges/Domestic on-carriage . . . . . . . . . . . . . . . . . . . . . . . . . S/B S/B S/B S/B S/B B B
Unloading at buyer's premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S B B B B B B

OTHER COSTS - COST DISTRIBUTION ACCORDING TO PARTY AGREEMENT NOT REGULATED IN

INCOTERMS. DISPOSITION SHOWN ABOVE IS USUAL DISTRIBUTION AND MAY VARY IN CERTAIN
CIRCUMSTANCES. ACCORDINGLY, THIS IS A GUIDE ONLY AND REFERENCE SHOULD BE MADE TO ICC
INCOTERMS 2000 FOR MORE PRECISE AND DETAILED INFORMATION.

Useful pointers
EXW
If you buy “Ex Works” be prepared to have to load your own container if service is FCL. If you want Shipper to
load, buy “Ex Works and loaded into Container”. Alternatively buy “FCA Shippers Premises”.

EXW/FCA
If you buy Ex Works or FCA be prepared to arrange the contract of carriage on your own behalf. As Shipper
does not receive the Bill of Lading a Letter of Credit calling for a Bill of Lading from the Shipper is not
possible.

As the above tables suggest INCOTERMS cannot stand alone without further clarification on the point of delivery by
Seller to Buyer. For example CIP alone is uninformative whereas CIP Barcelona or CIF Sydney clearly states the
exact points of delivery.

As suggested in the comment on EXW above, INCOTERMS are not sacrosanct and can be supplemented or varied to
suit requirements or clarify an obscure point (e.g. “CIF and THC Tilbury”, “and arrange carriage to Sydney”).

10
Incoterms 2000
COST DISTRIBUTION BETWEEN SELLER & BUYER

SEA TRANSPORT ONLY

. .. .. .. .. .. . DEQ

. .. .. .. .. .. . FOB
. .. .. .. .. .. . CFR
. .. .. .. .. .. . DES

. .. .. .. .. .. . FAS
. .. .. .. .. .. . CIF
S = Seller pays

B = Buyer pays

Cost heading
Loading at seller's premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S S
Domestic precarriage/Local cartage . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S S
Contract of carriage and dispatch . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S B B
Trade documentation in country of exportation . . . . . . . . . . . . . . . . S S S S S B
Customs clearance in country of exportation . . . . . . . . . . . . . . . . . . S S S S S S
Export charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B
Terminal handling charge at port of loading . . . . . . . . . . . . . . . . . . S S S S S B
Loading at carrier's terminal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S S B
Transportation equipment and accessories . . . . . . . . . . . . . . . . . . . . S S S S B B
Transport (Cargo) insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - S - -
International main carriage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S S S S B B
Unloading at terminal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S B S/B S/B B B
Terminal handling charge at port of discharge . . . . . . . . . . . . . . . . . B B B B B B
Trade documentation in country of transit/importation . . . . . . . . . . S B B B B B
Customs clearance in country of importation . . . . . . . . . . . . . . . . . . B B B B B B
Import charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B B B B B B
Local charges/Domestic on-carriage . . . . . . . . . . . . . . . . . . . . . . . . . B B B B B B
Unloading at buyer's premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B B B B B B

OTHER COSTS - DISTRIBUTION ACCORDING TO PARTY AGREEMENT NOT REGULATED IN INCOTERMS

FOR GUIDANCE ONLY - SEE ICC INCOTERMS 2000 FOR MORE PRECISE AND DETAILED INFORMATION

Diagram shows (as explained on page 15) that with FOB/CFR/CIF risk passes between Seller and Buyer at the
moment the cargo passes over the ship's rail upon loading on board the vessel because, with traditional port-to-port
shipping, Bills of Lading reflected tally and condition at this time, which is the last opportunity prior to marine
transit. This opportunity is not possible with containers packed away from quay/terminal as goods are packed at
Shipper's premises or CFS (i.e. where Carrier receives goods). FCA/CPT and CIP reflect this and with them risk
passes when/where goods are received by the Carrier or his agent.

If FOB/CFR used for containerised goods packed at A and found damaged at F where did loss/damage occur? Between
A&B or B&C or between C&D, D&E or E&F? The former are the Shipper's responsibility whereas the latter are the
Consignee's. Scope for a dispute which would not have arisen if FCA/CPT had been used (with appropriate price
adjustment).

11
Part 1
Section 4: Letters of Credit
(Contract of Finance & UCP500)
A CONTRACT OF FINANCE Seller, the Buyer approaches his Bank with a
The Contract of Finance is the Letter of Credit Credit Application to open a Letter of Credit in
(Documentary Credit). Whilst it is closely allied favour of the Seller. The Letter of Credit starts
to and bound to follow the terms of the Sales off as a contract between Buyer and Bank but
Contract, it is a totally separate contract once issued becomes a contract between Bank
involving different parties and different rules, in and Seller direct. It stipulates what documents
this case the Uniform Customs and Practice for the Seller has to produce in order to get paid. A
Documentary Credits: ICC Brochure 500 typical Letter of Credit may call for the
(UCP500 for short). following:

If the Letter of Credit process is to work it has to ! Commercial Invoice & Packing List (" copies)
meet the requirements of the parties involved.
! A Certificate of Origin
These are:

The Seller - who wants to secure payment ! A full set (" in number) of Clean Shipped on
before he relinquishes control of Board Bills of Lading made out to order and
his goods. blank endorsed, marked “Freight Paid” (few
Merchants are sufficiently up to date to
The Buyer - who wants to gain control of the recognise that, as they now require a door-to-
goods before he parts with his
door service, they should call for a Combined
money in payment.
Transport (or Multi-Modal) Document
The Bank - who traditionally requires to deal instead of a Marine Ocean Bill of Lading,
in paper only and for whom the which is more appropriate for the break-bulk
whole process must therefore be port-to-port service of 30 years ago and most
document-based. In most areas the Letters of Credit still call for this dinosaur of
Bank requires control of the goods the liner trade).
without becoming a party to the
Contract of Carriage, which ! An Insurance Certificate for invoice amount
contains numerous indemnities in +10% against Marine and War Risks. (It is
favour of the Carrier which the advisable to stipulate extent of cover
Bank prefers to avoid. required – e.g. ICC Clauses A plus War.)

n.b. See Part 1 Section 9C for comments It is probable that the Credit will provide that it
regarding electronic credits is issued subject to UCP500, how payment is to
be made and any period of credit to the Buyer,
In the Documentary Credit process the Bank
the INCOTERM applied in the Sales Contract
acts as the agent of the Buyer to pay the Seller
(and any amendments thereto), the sale price
against the presentation of compliant documents.
and date of expiry for the presentation of
These documents at present usually include a
documents and/or shipment.
Bill of Lading as a document of title representing
the goods (see Part 2 Section 1A) and the system The provisions of UCP500 relevant to the above
operates as follows: are commented on in B below:

(i) Opening the Credit Commercial Invoice : Article 37

Having concluded a Sales Contract with the

12
Transport Documents : Articles 23-30 This may be inconvenient/unacceptable to the
(according to which Seller, who may prefer to involve the Advising
transport document is Bank in the contract with responsibility for
chosen) payment. In most cases, for a fee, the Advising
Bank may be willing to add its promise of
Insurance Documents : Articles 34-36. payment to that of the Issuing Bank and become
In relation to the Bill of Lading requirements a Confirming Bank. In this case the Seller may
stated above, the following explanations are proceed against the Confirming Bank in his own
offered: country for remedy for any breach of the
Contract of Finance.
Clean : see Article 32
Credits may be Revocable or Irrevocable and
Shipped : see Article 23 - Section (a)(ii) Confirmed or Unconfirmed. A Revocable Credit's
terms may be amended by the Buyer at any
To Order and
time, without any prior agreement of the Seller,
Blank Endorsed : see Part 2 Section 1D :
whereas the terms of an Irrevocable Credit, once
“Consignee or Order”.
issued, can only be amended by agreement
Freight Paid : If the terms of the between the parties. Accordingly, an Irrevocable
sale are such that the price Credit is the only Credit worth having and a
paid by the Buyer to the Seller Revocable Credit is really not worth the paper
includes freight (i.e. CIP/CIF upon which it is written. This point is confirmed
rather than FCA/FOB) then the by the fact that UCP500: Article 6(c) provides
Buyer requires evidence of that, if a Credit is silent on revocability, it is
payment of freight by the Seller deemed to be irrevocable, as it is assumed that
in the form of a “freight paid” this is the normal requirement.
endorsement on the Bill of
Lading. Clearly a Confirmed Credit is more secure than
an Unconfirmed Credit but it is also more
(ii) Advising the Credit expensive. Accordingly, the decision on which
The Buyer's Bank, who issues the Letter of one to use is subjective, based on experience,
Credit, is unsurprisingly known as the Issuing relationships and the current situation and
Bank. It issues the Letter of Credit as a Contract circumstances.
of Finance between itself and the Shipper/Seller.
This contract provides that, if the Seller provides Thus the most secure Credit is Irrevocable
the documents required by the Letter of Credit, Confirmed and the least secure is Revocable
in compliance with all the terms of that Letter of Unconfirmed with the former being, accordingly,
Credit, then the Seller will be paid by the Bank more expensive.
in exchange for the documents.
The Issuing Bank does not usually advise the (iii) Presentation
terms of the Credit to the Seller direct but The Seller now has a Sales Contract with the
usually does so via a Bank in the country of the Buyer and a Contract of Finance (Letter of
Seller as a Correspondent Bank (this may be a Credit) with the Buyer's Bank. The two must be
branch of its own bank (if it has one in position) compatible and the first thing that the Seller
or a third party Bank engaged for this purpose). should do on receiving a Letter of Credit advice
is to check that this is so and that he can comply
If the Correspondent Bank merely passes the with ALL of the terms of the Credit, as this is a
advice of the Credit to the Seller, it is known as prerequisite of unqualified payment (i.e. without
the Advising Bank and has acted as an agent having to give a letter of indemnity to the Bank,
only to create a contract between its principal: against documents being refused by the Buyer on
the Issuing Bank and the Seller, in which it has account of any discrepancy, in order to obtain
no personal responsibilities. In the event of any payment) (see Part 1 Section 8: “Merchants’
breach of the terms of the Credit by the Issuing Checklists”). This being the case, the folly of not
Bank, the Seller must proceed against the making such checks cannot be overemphasised
Issuing Bank in the domicile of that Bank (where but far too many Shipping Managers consign
it has assets to satisfy any judgement obtained). Letters of Credit unread into a drawer on

13
receipt, until the goods have been shipped and his Bill of Exchange (Term Credit). The Bank
the time comes to collect and prepare the checks the documents against the terms of the
required documents for presentation to the Bank credit applying UCP500 as guidance to
to secure payment. interpretation of the documents and, if the
documents are in order, effects
Errors or items that must be amended (perhaps payment/acceptance in accordance with the
because they are incapable of performance) can terms of the Credit. If the documents are not
be rectified comparatively easily and cheaply at compliant with the Credit they are rejected or, in
this stage but, if these points are left certain circumstances where discrepancies are
unchallenged until just before presentation of minor, a Bank may be prepared to effect
documents, when the goods are already in payment against a Letter of Indemnity from the
transit to the Buyer and compliant documents Shipper to the Bank to cover potential rejection
cannot be produced, then the Buyer has a clear of the documents by the Buyer, when they are
upper hand and may well exact a price (in the presented to him for acceptance in a non-
shape of a discount on the price) for agreeing to compliant condition (as he is fully entitled to do
any amendment, when the Seller discovers (for as the doctrine of “strict compliance” applies to
example) that the Carrier will not commit Letter of Credit transactions: only documents
perjury and put false dates on the Bill of Lading that comply exactly with the requirements of the
(expiry of shipment date requirements is a Credit (as interpreted by UCP500) are good
common cause of failure to comply with a Letter enough. Documents that are equivalent to,
of Credit) just so that the Seller can obtain nearly as good as, or even better than, are
prompt payment. unacceptable - only documents that strictly
comply will suffice).
So, LESSON NUMBER ONE! (on receipt by the
Shipping Manager of a Letter of Credit): CHECK The doctrine of strict compliance and the sad
THAT YOUR LETTER OF CREDIT COMPLIES lack of knowledge and competence in the
WITH YOUR SALES CONTRACT AND THAT international trade forum leads to over half of
ALL REQUIREMENTS THEREIN ARE the sets of documents being tendered against
CAPABLE OF PERFORMANCE IF YOU WISH Letters of Credit being refused at first
TO SECURE A FULL AND PROMPT presentation on account of discrepancies. In a
PAYMENT. 1997 survey, Lloyd's Bank Commercial Service
Dept. in the U.K. ascertained that 55% of all
Banks deal in documents not in goods (UCP500 documents were rejected on first presentation.
Article 4). They do not like having their marble The same discrepancies recurred with
halls sullied by having crates of cargo dumped in monotonous regularity and 10 types of
them. Now that the Seller's Shipping Manager discrepancy accounted for 80% of the failures.
has the Letter of Credit, the pressure is on to put They were as follows:
together the required documentation to secure
the earliest payment because, whether the %
Credit is a “Sight” Credit (payment in return for # Inconsistency between documents 28
documents) or a “Term” Credit (documents # Inappropriate signature on transport
exchanged in return for acceptance of a Bill of documents 9
Exchange with a period of credit before # Documents not presented within
“maturity” when payment is due), payment is specified time 8
calculated from the time when the Bank accepts # Absence of a specified document 8
the documents as being compliant with the # Documents not marked as “original” 8
requirements of the Credit and pays (or agrees to # L/C expired 4
pay at some certain future date) the Seller. # B/L or insurance documents not
endorsed 4
These documents are listed in the Credit and # Goods' description in invoice not as
usually comprise/include those to which per L/C 4
reference was made above under (i) Opening the # Unauthenticated alteration of addition
Credit. When the Shipping Manager has to a document 4
assembled these he submits them to the # Late shipment 3
Correspondent/Advising/Confirming Bank to
secure payment (Sight Credit) or acceptance of 80%

14
This is an indictment on the level of expertise in named Consignee is a “Straight” Bill (see Part 1
the field of export and import. It wastes time and Section 9A) and cannot be used as a vehicle to
costs money on account of delayed payments and transfer rights to goods). Letters of Credit almost
time spent resolving discrepancies that, with a invariably call for the Bill to be made out “To
little more care and expertise, should never have order” and blank endorsed. “To order” means to
occurred in the first place, so this is an area to the order of the Shipper, who is thus the
which it is well worth giving attention, as it is an Consignee as well, so it is to him that the
area where effort can bear fruit. Everyone Carrier must look for delivery instructions.
involved in the export or import process should These instructions can be given in a variety of
have a working knowledge of INCOTERMS 2000 ways:
and UCP500, together with the working of the
# by issue of a delivery order
various payment processes, especially
Documentary Credits. INCOTERMS are # by a specific endorsement on the Bill
explained in Part 1 Section 3 whilst the sorts of
requirements likely to cause problems in # by blank endorsement on the Bill.
Documentary Credits are outlined in Part 1
(A blank endorsement is the Shipper's stamp and
Section 4B. Study of these sections will bring
signature without instructions whereas a specific
dividends.
endorsement has specific delivery instructions
(iv) Bill of Lading as a Document of Title above the signature.) A blank endorsed Order
Of the documents required by the Letter of Bill of Lading is a bearer document. That is to
Credit the one that is usually the most say that title to goods can now be passed merely
important, and is most often the cause of by passage of the document without further
problems, is the Bill of Lading (see Part 2 endorsement, in the same way as is possible with
Section 1A). The Bill of Lading has three a Bill made out “To Bearer”. Thus the Bank can
functions: a receipt, a contract of carriage (both control the goods by holding the blank endorsed
of which are usually easy enough to understand) Order Bill without becoming a party to the
and thirdly (and of vital importance in the contract of carriage and exposing itself to the
Documentary Credit process) it is a transferable various indemnities to the Carrier therein.
document of title (which is often less easily
It is because the Bill of Lading acts as a
understood).
documentary token denoting entitlement to the
In the context of a document of title a Bill of goods represented thereon that the Bank is able
Lading should be regarded as a “cheque for to act as the agent of the Buyer in a
goods” because everything that a cheque is to Documentary Credit transaction to pay the
money a Bill of Lading is to goods. The Carrier is Seller against surrender of compliant documents
the Bank, the Seller/ Shipper is the account stipulated in the Credit, even though Buyer and
holder and the Buyer/Consignee is the Seller may be thousands of miles distant at the
beneficiary. Anyone would be rightly annoyed time the transaction takes place. It enables
with their Bank who allowed a third party to international transactions to take place rather in
withdraw cash from their account without a the fashion of going into a pawnbrokers to sell
cheque from them. Strangely, approaching a the family silver. As the silver goes across the
Carrier for delivery of goods without surrender of counter the money concurrently travels in the
a duly endorsed original Bill of Lading (an exact opposite direction. In an international
corollary) does not seem to attract a similar transaction documents required by the terms of
reaction. It should! Like a cheque a Bill of the Credit pass over the Bank's counter in
Lading, with endorsements in order, bestows exchange for payment or acceptance of a Bill of
upon its holder rights to money/goods (or if you Exchange.
prefer, it is like a cloakroom ticket - no ticket: no
This process meets the requirements of all
coat, no Bill: no goods). Thus he who holds the
parties as outlined at the beginning of this
Bill controls the goods.
section in that payment to the Seller coincides
Only a Bill made out “To order”, “To the order of with the transfer of the control of goods to the
. . .”, or “To Bearer”, can be a transferable Buyer (via his Bank) and the blank endorsed
document of title (a Bill made out directly to a “Order” Bill of Lading gives the Bank the control
over the goods without it becoming a party to the

15
Contract of Carriage and thus being exposed to the payment terms in the Credit (e.g.
any liabilities thereunder. Because the Bill of Sight/Deferred) and, if the latter, it discounts the
Lading as a transferable document of title Bill of Exchange to give the Seller immediate
facilitates this process it has been the lynchpin payment, if the Seller so requires.
in the growth of international trade. It has
almost been too successful in that many people The Correspondent Bank, having paid, accepted
are unable to countenance any form of or negotiated the draft of the Seller, now
international seaborne transaction without one despatches the documents to the Issuing Bank
and this attitude is holding up the development for reimbursement. The Issuing Bank is then in
of Waybills and paperless trading (see Part 1 a position to pass the documents through to the
Section 9). Buyer against payment, who is then in
possession of the necessary document of title to
(v) Payment approach the Carrier for delivery.
Not only must the Letter of Credit stipulate the
If, by chance, the Buyer has become insolvent in
amount of the payment to the beneficiary (Seller)
the interim, the Issuing Bank must still pay on
but also it must stipulate when and how such
the Credit but, as the Bank holds a blank
payment is to be made. The following are the
endorsed Order Bill of Lading, which is a bearer
usual alternatives:
document, the Bank has some security and can
Sight Payment: The nominated Correspondent foreclose and take delivery of the goods for sale
Bank pays the beneficiary (Seller) upon to offset its loss.
presentation of a full set of compliant documents.
Alternative Trading Arrangements
Deferred Payment: Payment is made by the Whilst the Documentary Credit offers the safest
Correspondent Bank in accordance with the method of conducting an international
terms of the Credit upon expiry of the stipulated transaction, it is by no means foolproof and is
period of credit to the Buyer (e.g. 30 days' sight = also quite costly. It is necessary where there is
30 days after deposition of a full set of compliant no trust between Buyer and Seller but, where
documents). there is a degree of trust, the parties concerned
may be tempted to avoid the cost by considering
By Acceptance: With an Acceptance Credit, in alternative arrangements. These include:
addition to the required documents the Seller
also prepares a Bill of Exchange drawn on a Open Account Trading: In this arrangement
party nominated in the Credit (usually the the Seller sends the documents directly to the
Correspondent Bank acting as agent for the Buyer and relies upon him to honour the terms
Issuing Bank (Unconfirmed) or as principal of payment in the Sales Contract and remit
(Confirmed) or even the Buyer). Acceptance payment accordingly.
Credits almost always provide for deferred
payment. (A Bill of Exchange is a forward dated Payment In Advance: This is the other end of
cheque in favour of the beneficiary (Seller) to pay the spectrum where the Buyer remits payment
a certain sum on a stipulated date signed by the to the Seller before the Seller despatches the
party undertaking to make the payment.) goods and relys upon him to honour the terms of
the Sales Contract and despatch compliant goods
Once the Seller has an accepted Bill of Exchange within the terms of that contract.
he can either wait until it “matures” before
cashing it or he can “discount” it by selling it Documentary Bills: In a Documentary Credit
(usually to a Bank) for its face value less the Bank acts as the agent of the Buyer to pay
commission based on the length of time to run to the Seller against surrender of compliant
maturity and the credit rating of the acceptor. documents. In a Documentary Bill/Collection the
roles are reversed and the Bank acts as the
By Negotiation: In a Credit available by agent of the Seller to present documents to the
Negotiation the Correspondent Bank authorised Buyer against payment (cash against
by the Issuing Bank pays the Seller according to documents).

16
17

Summary of Procedure
Seller Buyer

Advising/Confirming Bank Issuing Bank

1. The Buyer and the Seller conclude and is satisfied that he can meet its terms 7. The Bank checks the documents against Bank, sends the documents to the Issuing paid, accepted or negotiated under the
a Sales Contract providing for payment by and conditions, he is in a position to load the Credit. If the documents meet the Bank. Credit.
Documentary Credit. the goods and dispatch them. requirements of the Credit, the Bank will 9. The Issuing Bank checks the documents 10. When the documents have been checked
2. The Buyer instructs his Bank - the 6. The Seller then sends the documents evi pay, accept, or negotiate, according to the and, if they meet the Credit requirements, by the Issuing Bank and found to meet the
“Issuing” Bank - to issue a Credit in dencing the shipment to the Bank where terms of the Credit. In the case of a Credit either Credit requirements, they are released to
favour of the Seller (Beneficiary). the Credit is available (the Bank). (This available by negotiation, the Issuing (a) effects payment in accordance with the the Buyer upon payment of the amount
3. The Issuing Bank asks another Bank, may be the Issuing Bank, or the Bank or the Confirming Bank will negotiate terms of the Credit, either to the Seller if due, or upon other terms agreed between
usually in the country of the Seller, to Confirming Bank, or any Bank named in without recourse. Any other Bank, includ he has sent the documents directly to the him and the Issuing Bank.
advise or confirm the Credit. the Credit as the Paying, Accepting or ing the Advising Bank if it has not con Issuing Bank or the Bank that has made 11. The Buyer sends the transport document
4. The Advising or Confirming Bank informs Negotiating Bank, or it may be the firmed the Credit, may negotiate, but will funds available to him in anticipation, or to the Carrier who will then proceed to
the Seller that the Credit has been issued. Advising Bank or any Bank willing to do so with recourse. (b) reimburses in the pre-agreed manner deliver the goods.
5. As soon as the Seller receives the Credit negotiate under the Credit.) 8. The Bank, if other than the Issuing the Confirming Bank or any Bank that has
The respective security of the alternative Article 29 Courier and Post Receipts
payment arrangements is shown in the following Article 30 Transport Documents issued by
chart: Freight Forwarders.

Most Secure Payment in Least Secure In this brochure we are concerned primarily with
for Seller Advance for Buyer Articles 23, 24 and 26.

Documentary Article 23
Credit
Marine/Ocean Bill of Lading
Documentary a) If a Credit calls for a bill of lading covering a
Bill/Collection port-to-port shipment, banks will, unless
otherwise stipulated in the Credit, accept a
Least Secure Open Account Most Secure document, however named, which:
for Seller Trading for Buyer
i. appears on its face to indicate the name
of the carrier and to have been signed or
B DOCUMENTARY CREDITS & UCP500 otherwise authenticated by:
On 1st January 1994 UCP400 was replaced by
- the carrier or a named agent for or on
UCP500. In format there is a substantial
behalf of the carrier, or
difference between them but, so far as Bills of
Lading and Contracts of Carriage are concerned, - the master or a named agent for or on
there is little change in content, excepting that, behalf of the master.
for the first time ever, the Rules make provision Any signature or authentication of the
for the use of Waybills in Documentary Credits carrier or master must be identified as
(see Part 1 Section 9 for a more detailed carrier or master, as the case may be. An
appraisal of this opportunity). Merchants would agent signing or authenticating for the
be well advised to obtain a copy of UCP500, carrier or master must also indicate the
which is obtainable through their Bankers or name and the capacity of the party, i.e.
direct from the ICC at the addresses listed in carrier or master, on whose behalf that
Part 1 Section 3 or through any local national agent is acting.
committee of the ICC. The following points are of
particular interest in relation to Contracts of and
Carriage: ii. indicates that the goods have been
loaded on board, or shipped on a named
In order to simplify the work of the practitioner
vessel.
in the application of the Rules, UCP500 has
adopted an approach whereby a separate Article Loading on board or shipment on a
is allocated to each type of transport document named vessel may be indicated by pre-
likely to be called for in a Letter of Credit. printed wording on the bill of lading that
Thereafter the relevant Article provides all of the the goods have been loaded on board a
Rules relevant for that particular type of named vessel or shipped on a named
document. This means that there is substantial vessel, in which case the date of issuance
repetition between these Articles, making the of the bill of lading will be deemed to be
Rules longer, but it means that all the the date of loading on board and the date
requirements for any type of document are of shipment.
grouped in one Article, making the work of the
In all other cases loading on board a
practitioner that much simpler.
named vessel must be evidenced by a
The types of document recognised by UCP500 notation on the bill of lading which gives
are: the date on which the goods have been
Article 23 Marine/Ocean Bill of Lading loaded on board, in which case the date
Article 24 Non Negotiable Sea Waybill of the on board notation will be deemed
Article 25 Charter Party Bill of Lading to be the date of shipment.
Article 26 Multimodal Transport Document If the bill of lading contains the
Article 27 Air Transport Document indication “intended vessel”, or similar
Article 28 Road, Rail or Inland Waterways qualification in relation to the vessel,
Transport Documents loading on board a named vessel must be

18
 evidenced by an on board notation on the b) For the purpose of this Article, transhipment
bill of lading which, in addition to the means unloading and reloading from one
date on which the goods have been vessel to another vessel during the course of
loaded on board, also includes the name ocean carriage from the port of loading to the
of the vessel on which the goods have port of discharge stipulated in the Credit.
been loaded, even if they have been
c) Unless transhipment is prohibited by the
loaded on the vessel named as the
terms of the Credit, banks will accept a bill of
“intended vessel”.
lading which indicates that the goods will be
If the bill of lading indicates a place of transhipped, provided that the entire ocean
receipt or taking in charge different from carriage is covered by one and the same bill
the port of loading, the on board notation of lading.
must also include the port of loading
d) Even if the Credit prohibits transhipment,
stipulated in the Credit and the name of
banks will accept a bill of lading which:
the vessel on which the goods have been
loaded, even if they have been loaded on i. indicates that transhipment will take
the vessel named in the bill of lading. place as long as the relevant cargo is
This provision also applies whenever shipped in Container(s), Trailer(s)
loading on board the vessel is indicated and/or “LASH” barge(s) as evidenced
by preprinted wording on the bill of by the bill of lading, provided that the
lading. entire ocean carriage is covered by one
and the same bill of lading,
and
and/or
iii. indicates the port of loading and the port
of discharge, ii. incorporates clauses stating that the
carrier reserves the right to tranship.”
and/or
Articles 24 and 26 of UCP500 are similar in
(b) contains the indication “intended” or
format to Article 23 and incorporate equivalent
similar qualification in relation to the
provisions.
port of loading and/or port of discharge,
as long as the document also states the The following points are worthy of note:
ports of loading and/or discharge (except where indicated the same points
stipulated in the Credit, appear in all three Articles)

and a)i Signature

This revised requirement has (as we
iv. consists of a sole original bill of lading
predicted) caused substantial problems in
or, if issued in more than one original,
the shipping industry, because few Carriers'
the full set as so issued,
Bills had signature clauses that met UCP500
and requirements. P&O Nedlloyd was confident
that it had adequately anticipated these
v. appears to contain all of the terms and
requirements but pedantic application by
conditions of carriage, or some of such
certain Bankers caused even us some
terms and conditions by reference to a
problems, necessitating a minor amendment.
source or document other than the bill of
So serious was the problem that the ICC
lading (short form/blank back bill of
issued a “Position Paper” designed to clarify
lading); banks will not examine the
the situation, which raised as many
contents of such terms and conditions,
problems as it solved. The present position is
and that the Carrier must be positively identified
vi. contains no indication that it is subject in the signature box, e.g. “For P&O Nedlloyd
to a charter party and/or no indication Ltd as Carrier”. If it is signed by an agent,
that the carrying vessel is propelled by he and his capacity for signature must also
sail only, be clearly stated e.g. “Thos C Smith as agent
for the Carrier”. (Just “as agent” is
and insufficient, it must state as agent for who.)
vii. in all other respects meets the a)ii Shipped on Board Endorsements
stipulations of the Credit. Unless otherwise stipulated in the Credit,

19
 UCP unfortunately no longer requires Banking world but we are stuck with this, at
shipped on board (SOB) endorsements to be least until the next revision of UCP.)
signed or authenticated. This makes it even
Article 32
easier for the forgers and fraudsters, who are
Clean Transport Documents
always active, calling for Received for
(a) Defines a clean transport document as “one
Shipment (RFS) Bills before adding their
which bears no clause or notation which
own SOB endorsement from their set of
expressly declares a defective condition of
counterfeit stamps to produce forged
the goods and/or the packaging”.
documents.

b)-d) No Transhipment (c) Provides that a requirement of “Clean on

Articles 23 and 24 provide for a “No Board” is met if the transport document
Transhipment” provision in a Letter of complies with a) above and the appropriate
Credit to be ignored if the goods are Article for the relevant document (23-30).
containerised (and remain so throughout)
So it is not necessary to clause a Bill “Clean on
and the whole transit is covered by the one
Board” in order to meet a Letter of Credit
contract of carriage. Article 26 regards
requirement to this effect.
Multi-modal Transport as automatically
incorporating transhipment and merely Article 37
provides for a Multimodal Bill to be issued. Commercial Invoices
Other clauses which are particularly relevant to (c) The description of the goods in the
Combined Transport are: commercial invoice must correspond with the
description in the Credit. In all other
Article 20 documents the goods may be described in
Ambiguity as to the Issuers of general terms not inconsistent with the
Documents - “Original” Documents description of the goods in the Credit.”
In Documentary Credits documents must be
originals and 20(b) defines what Banks must This is the clause that provides that you do not
obtain to satisfy these requirements. need long descriptions on Bills of Lading and
need only describe the goods “in general terms
Unless otherwise stipulated in the Credit, banks not inconsistent with the description of the goods
will also accept as an original document(s), a in the Credit.”
document(s) produced or appearing to have been
produced:
C eUCP
(i) by reprographic, automated or computerized The astonishing speed of growth of e-commerce
systems over the past few years has been breathtaking.
Many commercial systems and procedures in
(ii) as carbon copies
common use as little as five years ago have been
provided that it is marked original and, where almost entirely abandoned as they were paper-
necessary, appears to be signed . . . based and have been replaced by electronic based
systems, which are faster, cheaper and more
Hence all Bills of Lading must be marked accurate. One area of commerce which, so far,
“Original” if they are not to risk rejection by a has been unable to benefit from these advances
Bank who is overlooking the fact that the judge is the arrangement for payment in international
in the “Bank of China” case, which identified this trade. This is because the system relies upon the
requirement, specifically exempted Bills of existence of a transferable document of title: a
Lading from the “Original” requirement (and Bill of Lading which cannot be an electronic
many do!). As Bills of Lading are invariably message and must be a tangible document. This
computer produced, or at least appear to be so, is a stumbling block which is proving difficult to
they run a risk of rejection if they do not carry negotiate.
the magic word “Original”.
In Part 1 Section 9 there are brief details of
(The “Bank of China” case, which gave rise to the three attempts to circumnavigate this problem so
need for the unintended requirement, has been a that international trade may be managed
source of some embarrassment in the Doc. Credit electronically throughout and not have to revert

20
to paper when the matter of payment arises. In Thus it may be seen that, whilst the
an attempt to encourage and facilitate these Importer/Buyer opens (and therefore controls the
efforts the ICC has produced a supplement to terms of) the Letter of Credit, the Exporter/Seller
UCP 500 to allow interpretation of those Rules may restrict that control by judicious wording of
with electronic messages replacing the paper the Sale Contract. Indeed, the first thing an
documents provided for in UCP 500. Colloquially Exporter should do on receiving a Letter of
referred to as “eUCP” the full title of these Credit is to read it and check that:
supplementary rules is “ Supplement to the
Uniform Customs and Practice for Documentary ! It is in accordance with the terms of the
Credits for Electronic Presentation”. They consist Sales Contract.
of 12 short rules of interpretation to provide a
! It does not contain any provisions with
bridge between the current UCP and the
which he cannot comply.
processing of the electronic equivalent of paper-
based Credits and are not a revision of the UCP Do this immediately you receive your
500. They allow for changes should developments Letter of Credit, not 5 minutes before
necessitate so the current version is numbered setting off to your Bank to demand
Version 1.0. payment. Then if there are errors you have
time to rectify them.
eUCP came into operation on the 1st April 2002
and, like UCP 500, it needs to be contractually
incorporated into the Credit in order to operate, E SUMMARY
as it is rules for voluntary adoption and not
# Control Letter of Credit details through
mandatory law. If eUCP is incorporated but no
carefully worded Sales Contracts.
mention is made of UCP 500 the latter is
automatically incorporated, as eUCP is only a # Use the correct INCOTERM (see Part 1
supplement to UCP 500 and cannot stand alone. Section 3B).
Whilst eUCP does not appear to be in regular
operation (or indeed in operation at all) at # If you want a door-to-door service ask
present, it is a creditable move by the ICC to for a Combined Transport Document
assist electronic development in this area and NOT a Marine/Ocean Bill of Lading.
prepare Banks to be ready for demand, once # Avoid “Shipped on Board”
acceptable systems are in place and Customers requirements if you want earlier
are prepared to make the necessary changes to payment.
adopt one of the systems outlined in Part 1
Section 9C or some other alternative that may be # Do not prohibit Transhipment for
launched. Combined Transport Shipments.

# Do not ask for detailed Bill of Lading

D RECOMMENDATIONS descriptions.
The price of a satisfactory transaction (like
# Avoid calling for Clauses or Certificates
freedom) is eternal vigilance and Merchants
that may not be obtainable from
would do well to note the advice given in this
Carriers.
Guide. In addition, a little attention to the
following could avoid a lot of unnecessary hassle. # If you must have a Temperature Clause
for refrigerated goods ensure it is
Remember the terms of the Letter of Credit, with
reasonable and feasible (see Part 1
which the Exporter must comply if he is to get
Section 5C(iii)).
paid, are determined by the terms of the Sale
Contract negotiated between the Seller and the # Check your Letter of Credit as soon as
Buyer. If that Sale Contract is specific on all you get it to ensure you can meet its
important points, then the Exporter leaves the requirements.
Importer with no scope for interpretation to the
Exporter's detriment. If it is not, the Importer is
free to put his own interpretation on matters.

21
ICC Publications: The following ICC official UCP511: Documentary Credits: UCP500 and 400
publications are available to provide more compared.
detailed advice and commentary on
Documentary Credit Operations. They are all UCP515: The New ICC Guide to Documentary
obtainable through the offices listed in Part 1 Credit Operations Recommendations.
Sections 3A or any local National committee of eUCP: Supplement to the Uniform Customs &
the ICC. Practice for Documentary Credits for Electronic
UCP500: Uniform Customs and Practice for Presentation.
Documentary Credits.

22
Part 1
Section 5: Contract of Carriage
Booking and Export Documentation
P&O Nedlloyd is conscious that, as it asks its A EXPORTS IN THE U.K.
Exporters to provide a substantial amount of (i) Shipping Instructions
information, either electronically or in To facilitate the data input of Shipper’s
documentary form, a brief explanation of the instructions to its computer and to ensure that
need and use of this might be helpful. (See Part all relevant data is provided, P&O Nedlloyd
1 Section 7 for Importers.) would prefer that shipping instructions be
submitted in a standard format, whether
Inevitably local requirements differ to meet
despatched by post, fax or e-mail. In the United
different criteria operated by local authorities
Kingdom the standard format is the Export
and various custom and usage arrangements.
Cargo Shipping Instruction (ECSI), one of
This makes it impossible to cover all variations
SITPRO’s aligned export documents collectively
worldwide in one Section. The following advice,
known as Top Form. In countries where no such
relating primarily to procedures in the U.K., and
document is used, the Bill of Lading details and
U.S., is a good guide to operations elsewhere in
instructions should be conveyed in the customary
the world, although Merchants should check
form. Written instructions must be submitted by
with local agents to avoid confusion.
a named signatory of the Shipper or his
Exporters and their agents require us to provide representative as soon as possible after making a
them with accurate documentation issued booking but, in any event, before the vessel sails.
promptly after receipt of goods into the system. This is critical for exports to the U. S. where
To facilitate fast processing of Bills of Lading, (under the Container Security Initiative) P&O
Invoices and Manifests etc, we operate a Nedlloyd is obliged to provide U.S. Customs with
sophisticated computerised system and, in order manifest data no later than 24 hours before
to meet your requirements, it is important that departure from the port of origin, which in turn
accurate data is received within an acceptable requires the Shipper to provide us with written
timescale. Not only does a computer enable large data no later than 72 hours before the vessel is
volumes of data to be processed in a fraction of due to load. For exports to the U.S. P&O
the time of a manual operation, it also ensures Nedlloyd provides a specific template for
that we have a consistency of information shipping instructions.
throughout the documentary chain. It further
(ii) U.K. Standard Shipping Notes (SSNs)
allows the production of the Bill of Lading and
In the U.K. the above document, prepared by the
Invoice immediately goods have been packed into
Shipper, has historically accompanied the
a container, provided that P&O Nedlloyd has in
delivery of goods to the terminal and a copy of
its possession accurate and complete source
the same has been accepted by H.M. Customs as
documentation.
a pre-shipment advice under their Simplified
Initially when a booking is made, whether FCL (Export) Clearance Procedure. Since the
or LCL, the Booking Party is allocated a unique introduction of electronic clearances (see below)
Booking Reference Number. This should be the SSN no longer serves the latter function but
quoted on all source documents to ensure it is still required to be completed to reconcile
immediate identification of the consignment in the loaded and booked data upon arrival of the
question. container at the port.

23
(iii)Dangerous/ Hazardous Goods including the World Customs Organisation
If the goods to be shipped are classified as (WCO) recommended format of a Unique
dangerous or hazardous, it is essential that they Consignment Reference (UCR). In order that
are not presented to P&O Nedlloyd for carriage P&O Nedlloyd in the UK can confirm the arrival
until written instructions are received by P&O and departure of goods to the Customs computer,
Nedlloyd from the Shipper detailing the it is necessary for the Shipper to specify the UCR
International Maritime Organisation (IMO) covering the goods at the time of booking.
classification and United Nations (U.N.) number,
At some EC ports P&O Nedlloyd can offer a
together with a full description of the goods,
Customs clearance service to Exporters. It is in
(including the correct technical name as well as
the Shipper’s interest to forward to P&O
any trade name) and P&O Nedlloyd agrees to
Nedlloyd or other Freight Forwarder (if he is
carry the goods and gives instructions for their
using one) the necessary documentation and/or
receipt.
information to enable a Customs declaration to
Special documentation is also required if be submitted as early as possible and to deliver
dangerous or hazardous goods are to be carried. the goods to the port in time for any Customs or
A Dangerous Goods Note (DGN) and a other statutory examination to be completed
Container/Vehicle Packing Certificate are before the vessel sails as otherwise there is
required in lieu of an SSN if the goods are of a always a risk that the consignment will miss its
hazardous nature. This document must always designated sailing.
accompany the goods and the Container/Vehicle
Exports to other EC countries
Packing Certificate section must be completed
EC goods shipped on P&O Nedlloyd’s intra-
for any Shipper-packed FCL containers and must
community (i.e between EC ports) services are
be signed by the Shipper. For FCL containers,
not subject to export Customs clearance by
the Shipper is responsible and legally liable for
reason of the Customs union of the EC.
attaching four labels of the appropriate class to
the container.
B EXPORTS IN THE U.S
On the inland transport document and on the
(i) U.S. - Export Cargo Shipping
transport emergency (TREM) card, which must
Instructions
accompany the goods, the Accord European
At the time of booking the Shipper or his agent,
relation du transport international des
customarily a Freight Forwarder, must supply to
merchandise Dangereux par Route (ADR)
P&O Nedlloyd all the information necessary for
classification and U.N. number must be shown,
acceptance of the booking and issuance of a
as well as the description of the goods. These
“Booking Number”. This typically includes
cards are prepared by the European Chemical
details of the Places of Receipt and Delivery
Industry Council (CEFIC) of Brussels according
and/or the Ports of Loading and Discharge (as
to the regulations of the ADR.
appropriate), a description of the goods and the
(iv) Customs Requirements type of container required as well as the
Customs clearance procedures within the Shipper’s particulars. Subsequent to the booking
European Community are governed by the the Shipper must supply the necessary
Community Customs Code (Regulation 2913/92) additional information required by P&O
and the implementing Regulation 2454/93 (as Nedlloyd to facilitate preparation of the Bill of
amended). Throughout the EC the Single Lading, including identification of the freight
Administrative Document (SAD) is specified for payer. This is normally done by the submission
submission to Customs to secure the clearance of of standard shipping instructions by the
exports to third (non EC) countries (in addition Exporter or his Freight Forwarder. The other
to any other document such as an export licence method of receiving shipping instructions is
etc). In some EC countries (such as the UK) the through our E-commerce system and the direct
Customs authorities provide for export EDI Transmission of the instructions from our
declarations to be submitted electronically, Customers.

24
In either case the shipping instructions must be necessary for exports, including Bills of Lading,
supplied to the Carrier no later than 24 hours Export Declarations, Dock Receipts, Certificates
before the vessel’s sailing. If the Carrier does not of Origin and Consular Invoices as well as
receive the instructions within the time period contracting for export packing and pre-shipment
allowed, the Carrier is not allowed to load the warehousing. Through our offices in Europe we
goods until they are received. Formerly the can also arrange for Customs Entries to be
Exporter also provided the Carrier with an prepared and lodged at destination.
Export Declaration (U.S. Customs form 75- 25-
(iv) Dangerous/Hazardous Goods
V). The Carrier then submitted the Export
All shipments of dangerous/hazardous goods
Declaration to U.S. Customs when he submitted
must conform with the current International
his Export Manifests. The data on the Export
Maritime Organisation (IMO) IMDG regulations.
Declarations was used to compile export
A complete reprint of these regulations (27/94)
statistics for all goods leaving the U.S. This has
became effective with effect from 1st January
been replaced by a new system called “ AES “
2000. For international shipments IMDG
(Automated Export System). This is a reporting
regulations supersede the U.S. Department of
system in which the Exporter transmits his
Transportation regulations that apply to
export data electronically direct to the U.S.
domestic transportation. The IMDG code number
Department of Commerce and U.S. Customs via
and U.N. code number must be shown on all
the AES system. Over 95 per cent of all US
shipping documents for dangerous/hazardous
exports are now reported to Customs and the
goods.
Department of Commerce through AES.
In addition, the Code of Federal Regulations
(ii) U.S. - Receipt for Carriage
Title 49, part 171-102 (Hazardous Materials
If P&O Nedlloyd arranges collection, receipt of
Regulations) requires that a 24 hour emergency
goods for carriage is normally acknowledged on a
telephone number be shown on all shipping
dock receipt. This 4-part form, supplies of which
documents. It is the Shipper’s responsibility to
are available from P&O Nedlloyd or your Freight
provide an emergency response telephone
Forwarder, should be given to the Trucker
number. Companies registered with
picking up the goods for carriage to the Port of
CHEMTREC, an organisation established by the
Loading, either prior to or at the time of
Chemical Manufacturers Association, can use the
collection. The Trucker will sign one copy of the
number available from this service. IMO also
dock receipt and return it to the Shipper to
requires the labelling of individual packaging in
acknowledge receipt of the goods. In some places
accordance with detailed regulations. The
the Trucker's documents, in the form of a short
labelling requirement includes the container
form Trucker's Bill of Lading/Waybill/SCAR Bill
itself and Shippers must ensure that appropriate
or “Truckers Pro”, may be used instead of the
labels are provided to the Trucker with the dock
dock receipt.
receipt.
If the Customer opts to deliver the loaded
(v) Intermodal Safe Container Act
container to a terminal (rail or sea) himself, the
W.E.F. 9th April 1997 the Intermodal Safe
Terminal Operator will prepare a Trailer
Container Act became operational in the U.S.
Interchange Receipt (TIR). This records the
Under this Act it is a requirement that any load
details of the container, including its condition
with a gross cargo weight exceeding 29,000
and seal number, and one copy is signed and
pounds must be declared to the trucker by means
given to the Customer as his receipt for the
of “Intermodal Certification” in an acceptable
loaded container.
form before the load is taken on to the highway.
(iii)Value Added Services Accordingly a Merchant needs to be careful to
P&O Nedlloyd offers a variety of value added declare heavy cargoes to the Carrier and his
supplementary services to Customers. These trucker (see Part 2 Section 4 - National Laws:
include the preparation of documentation U.S.).

25
(vi) Customs Requirements usually a requirement to certify that the
Without stressing any one particular aspect of vessel is less than 25 years old. Whilst the
export documentation, it is perhaps timely to vast majority of P&O Nedlloyd's fleet
remind Exporters that all exports are subject to comprises modern tonnage well within this
US Customs Service control in one form or parameter, there are a few vessels trading in
another. Certain goods must be presented to the Grand Alliance (and other trades in
Customs prior to packing/shipment in order to which P&O Nedlloyd participates and upon
protect duty, including authorisation of certain which Merchants' goods could be carried)
refunds, such as drawback, which may be that exceed this parameter. If such a vessel
available on previously imported goods, and to happens to be the next one on the berth
control restricted goods. when a Merchants' goods are presented for
Before automobiles can be exported, the Owner shipment, either no such certificate can be
or Shipper must present their Certificate Title of issued or the goods must await the next
Ownership to U.S. Customs. The title must be vessel in order to obtain such a certificate,
validated by Customs before the automobile can during which time the Letter of Credit may
be loaded on a vessel. The U.S. Department of expire. If a deep sea cellular containership is
Agriculture may require certain special forms for trading in a consortium operation only
certain products or foodstuffs. Compliance with between well charted major ports and
these requirements is a pre-requisite for handled only with custom-built gear it is
shipment from the U.S. quite feasible that its useful life may exceed
25 years. Accordingly, such clauses are best
(and quite safely) avoided if problems of the
C CLAUSES AND CERTIFICATES THAT
nature outlined above are to be avoided.
MAY CAUSE PROBLEMS
Furthermore, now that a survey by a leading
From time to time various specific (but often
P&I Club has established that crew error
ambiguous) requirements appear in Credits
rather than vessel age is the primary cause
which are not foreseen in UCP and which often
of major casualties, it would seem that the
cause problems. Such requirements are best
Classification Clause ought to take account
avoided, if at all possible, but, if they are
of, and require compliance with, the ISM
essential, then they must be crystal clear and
Code (see Part 2 Section 3A (vii) for details)
not require knowledge of some obscure
rather than place the main reliance on the
abbreviation or little used name for a clause that
vessel's age, where the requirement could
is not internationally recognised. Many is the
reasonably be extended to 30 years for
Credit requirement which has caused blank
cellular vessels exceeding (say) 25,000 gross
looks from Bankers and Carriers!
tons.
The following are but a few of the requirements
iii) Temperature Clausing: Increasingly strict
which may cause DELAY (at the very least) in
food regulations have led to an increase in ill
the processing of a set of documents.
conceived requests for temperature clausing
i) Certificate of Cover in a P&I Club: Clubs on Bills of Lading. “What is the problem?”
will not issue such certificates as to do so ask many Merchants, “Why can't you clause
would increase their administration costs my Bill: To be carried at -18 C”? Perhaps the
dramatically, so such certificates are NOT following may assist in understanding why
available and should not be requested. the problem is not as simple as it appears.

ii) Certificate of Vessel's Age: In order to The Anatomy of a Temperature Clause

comply with the Classification Clause found Most reasonable Shippers would accept that
in most Merchants' Open Cover Cargo a Carrier should only be asked to insert in
Insurance arrangements, one occasionally his Bill of Lading purely factual clauses
encounters requirements for Vessel's Age giving undertakings which can be controlled
Certificates in Letters of Credit. This is and the effect of which can be monitored.

26
 This being the case no Carrier could clause a If a clause evidencing temperature
Bill: maintenance throughout Combined
Transport is required the matter becomes a
“To be carried at -18 C”
little more complicated. The clause cannot refer
Why not? you say. It sounds innocuous to air delivery or air return and it has to exclude
enough. Consider the following points: transfer periods. Whether the control is by air
delivery or air return the purpose and effect of
- virtually all refrigerated goods shipped the monitoring is to control the supply of air to
in containers are FCL packed, so the the goods. Thus the following might be possible:
Carrier never has any opportunity to
ascertain the temperature of the goods “At all times during carriage, except during
(as he would have done conventionally transfers between modes of Carriage, Carrier will
by taking spear temperatures during exercise due diligence to ensure that a supply of
loading of the vessel). Accordingly he cold air designed to maintain a cargo
cannot warrant a temperature of the temperature of -18 C is provided by this
goods. Container.”

- his information comes via monitoring Obviously before a Carrier could consider
air delivery and/or return temperatures, applying this clause the Shipper would have to
and different models of refrigerated pay a door-to-door freight reflecting the provision
containers may be controlled in different of refrigeration throughout, including during
ways. Some by air delivery, others by air inland transits.
return.
Development of Refrigeration Capabilities
- containers cannot supply cold air The design and capabilities of refrigerated
continuously from receipt through to containers are advancing rapidly so that the
delivery in a Combined Transport latest containers are capable of a far more
movement as they will be “off power” for sophisticated performance than those
short periods during transfers between manufactured just a few years ago. The latest
modes of carriage (e.g. transport - integral refrigerated containers record via Data
terminal point - vessel -terminal point - Loggers, which record both air delivery and air
transport). return temperatures electronically whereas
earlier models monitor via Partlow Charts,
- to carry at a set temperature is an which are only capable of recording air return
impossibility as there will always be OR air delivery (not both) by means of a paper
minor fluctuations (during defrosting for chart. As the life of a refrigerated container is
example). Thus any undertaking approx 12 years a diminishing number of
regarding temperature during carriage Partlow Chart models will continue in service for
must always be a range of temperatures some years yet, although a substantial part of
(e.g. -18 to -20 C) or colder than a set the P&O Nedlloyd fleet is already of the Data
temperature (e.g. colder than -18 C). Logger variety.

Taking these criteria into account what type The existence of integral refrigerated containers
of temperature clausing could a Carrier offer of varying control performance makes the
to Shippers? formulation of firm rules for temperature
clausing difficult. The basic rule must always be
If a clause evidencing temperature of
that, when required, such clauses must be:
air delivery restricted to the period
whilst on the vessel were sufficient the # Factual
following might suffice: # Evidencing requirements which Carrier can
control and monitor
“Carrier confirms it will exercise due diligence to
# Unambiguous
ensure that air delivery to this Container will be
maintained at colder than -18 C whilst on board
the Vessel.”

27
Shippers Responsibilities Traditionally Carriers have preferred not to
If Shippers are to expect Carriers to meet their clause Bills of Lading to reflect carriage
requests for temperature clausing they must be temperatures. Having read the above Shippers
prepared to play their part in the arrangement will have a better appreciation of the
to ensure that everything runs smoothly. complications involved and the reasons why.
P&O Nedlloyd recognises that, in a changing
1. Firstly, and most importantly, Shippers
environment, the time is coming when some
must ensure that their loaded containers are
concession is necessary on this matter. They
made available to the Carrier at the agreed
trust that Shippers will recognise this as an
place of receipt on time with the goods at the
honest and positive approach to produce a
correct required carriage temperature. Given
mutually acceptable solution to this problem.
the increasingly strict regulations applying
to refrigerated foodstuffs, Shippers must be (iv) Values in Bills of Lading: If a Carrier puts
prepared to receive rejection of containers if a value in a Bill of Lading (however
the initial monitoring of the container by the obliquely e.g. 500 cartons x 24 items each at
Carrier suggests that the goods are not at U.S.$2.50 = an ad valorem declaration of
the required carriage temperature. U.S.$30,000) this amends his limitation of
liability to the stated value (see Clause 7(3)
2. Secondly there must be no attempted “arm
of Bill of Lading in Part 2 Section 2B). This
twisting” of the Carrier to accept any
increases the Carrier's liability and breaches
misleading clauses even “just this once” on
his insurance warranty so a surcharge is
the grounds that “I must have it to comply
made for Ad Valorem Bills of Lading. Unless
with my Letter of Credit”.
you are prepared to pay such surcharges,
The terms of the Credit are set by the Buyer but avoid requirements for values in Bills of
he is constrained by the terms of the Sale Lading. In this context note UCP Article
Contract. Therefore Shippers must draft tightly 37(c) re the detail required in Bills of Lading
worded Sale Contracts that only permit to which reference is made in Part 1 Section
reasonable clauses along the lines outlined 4B.
above.
(v) Supplementary Documents and Clauses:
Furthermore, Shippers must check their Letters If at all possible these are best avoided. If it
of Credit as soon as they are received and secure is intended to require them then it is
amendment of any unreasonable clause essential to check to ensure that they are
requirement. Do not leave it too late and only available before so doing as otherwise a
look at your Credit five minutes before going to frustrated transaction may ensue.
the Bank with your documents. That is too late
and will leave you at the mercy of your Buyer.

Track & Trace:

P&O Nedlloyd has introduced a “Track and Trace” facility for customers on its web site:
WWW.PONL.COM
This facility enables you to track the current status of your shipment using your P&O Nedlloyd Booking
Reference Number, Bill of Lading Reference or Container Number. The system is continuously updated
from the P&O Nedlloyd in-house systems and does not display any commercially sensitive information so
access does not require prior registration.

28
Part 1
Section 6: Contract of Indemnity
& CONCISE
Full Liability Bill of Lading claim every time. If both A and B were charged a
In the same way as people tend to confuse common “Full liability” rate of freight, A would
Contracts of Sale and Finance (see Part 1 be subsiding B. There would be no risk
Sections 3 & 4), there is a frequent assumption management incentive to care on B to mend his
that the Contract of Carriage is also the Contract ways, in the form of a higher premium for
of Indemnity: “If my goods are damaged in your indemnity.
care you should reimburse me in full” is a
Accordingly, whilst a “full liability” Bill of Lading
frequently heard assertion. This somewhat
appears to be a good idea, on closer inspection it
simplistic approach overlooks the fact that loss
is inequitable and impractical as the two forms
or damage can occur without the Carrier being
of contract (Carriage and Indemnity) require two
negligent and that some goods are more valuable
very different approaches to rating. That is not
than others. A Carrier must cover his costs in his
to say that the two contracts cannot be processed
freight rate so paying higher recourse to Shipper
concurrently to simplify matters and offer one-
A than to Shipper B, who is shipping a less
stop shopping to the Merchant. This is perfectly
valuable cargo, means that B is subsidising A.
possible and P&O Nedlloyd has adopted this
Clearly a Carrier must have a liability for loss or
approach with its CONCISE Cargo Insurance
damage attributable to his negligence as a risk
Service.
management incentive to care but this liability
need only be adequate to create the incentive to
care and need not be total. CONCISE
CONCISE Cargo Insurance is a cargo insurance
The “full liability” Contract of Carriage
service that is easy, quick and convenient to
envisaged by this school of thought is something
operate and offers highly competitive premiums.
which P&O Nedlloyd explored extensively in its
The scheme is administered by P&O Nedlloyd
earlier life as Overseas Containers Ltd (OCL) at
Logistics as one of its logistics products
the birth of Combined Transport. It was never
additional to combined transport carriage.
adopted for a number of reasons, the chief
amongst which was that the two contracts rely Insurance for the cover offered by CONCISE is
on entirely different criteria for their rating. arranged with AIG, one of the world’s largest
marine cargo insurers. This creates an ideal
Whether a Merchant has a good or bad record on
partnership of unimpeachable security and speed
cargo claims is largely immaterial to rating the
of action on both underwriting and claims
Contract of Carriage but is vital to the Contract
matters as the Carrier is the insurer and in
of Indemnity. An example will clarify. Consider
possession of data which normal insurers would
that time honoured cargo: widgets. Suppose we
have to arrange surveys to obtain.
have two Shippers: A and B. A uses strong
cartons secured on pallets and effects a good CONCISE is particularly geared to insuring
tight stow in the container with proper securing those consignments where P&O Nedlloyd is also
at the door end. B packs in second-hand sacks the Principal Carrier at favourable rates, which
and, when the container arrives for packing, just reflect the excellent claims record of the P&O
throws the bags into the container. Inevitably A's Nedlloyd service. It is also flexible enough to
outturn is good and B's is bad and precipitates a insure shipments by other carriers, containerised

29
or otherwise, at competitive rates, so that P&O the period when he is at risk. However, whilst
Nedlloyd can offer a complete cargo insurance risk may have passed to a Buyer under the
service. The attractive “one-stop shopping” Contract of Sale, it is not unknown for a less
facility which this creates makes the lives of reputable Buyer to fail to honour his
those Merchants who avail themselves of this responsibility to take up the documents at the
service simpler and easier. Isn't it time you bank, particularly if the market falls or he
investigated the Contract of Indemnity aspect of becomes aware that the goods have been
your business? For an immediate quotation call involved in a casualty. In so doing he exposes
your local P&O Nedlloyd office or contact: himself to legal action for breach of the Contract
of Sale but, in some countries, sensitive to
Tom Utberg
foreign exchange losses, he may take this risk,
Cargo Insurance Manager
secure in the knowledge of a favourable hearing
P&O Nedlloyd Logistics
in his national court and the fact that the Seller
Beagle House
will be deterred by the difficulty of pursuing him
Braham Street
in a foreign court.
London
E1 8EP This means that title and risk revert to the
Seller and, if the goods are damaged and, if he
Tel: +44 20 7441 1252
has no insurance, he incurs a loss. Prudent
Fax: +44 20 7441 8444
Shippers, particularly when trading to less
trustworthy Consignees in parts of the world
Contingency Cover where they would not wish to pursue legal
INCOTERM's clearly provide for when the action, often protect themselves in such
responsibility for risk to the goods passes from situations by effecting Contingency Cover, to
Seller to Buyer and, except for CIF/CIP, no provide cover if title unexpectedly reverts to
mention is made of any responsibility to effect them despite risk having passed to the Buyer
insurance. This means that it is for each party to under the Contract of Sale.
effect cover (if he so wishes) to protect himself for

30
Part 1
Section 7: Import Procedures

In Part 1 Section 5 there are details of the delivery of the goods cannot be effected until
Export Procedures in the UK and U.S. In this payment has been made.
Section you will find details of the equivalent
(iii) Commercial and Statutory Restraints
Import Procedures operating in these areas.
Normally there are three restraints which have
to be dealt with before the goods can be released
A IMPORTS IN THE UK
to Customers:
P&O Nedlloyd has facilities at the ports of
arrival and inland regional depots to clear goods Clearance by Customs or any other
and is keen to ensure that Consignees' lmports relevant statutory authority e.g.
are made available to them at the earliest Veterinary and Forestry Authorities
opportunity after the arrival of the containers in
Surrender of an original Bill of Lading
which their goods are stowed.
correctly endorsed (unless Waybill issued)
Customers will appreciate that there are a
Payment of all outstanding charges.
number of documentary restraints, both
commercial and statutory, which have to be In countries and ports where the consignment is
removed prior to goods being released and our delivered into and shipped out of a “Freeport”
computerised system is designed to assist some of the above requirements may not be
Customers to facilitate the speedy clearance of applicable.
their goods.
(iv) Customs Clearance
(i) Notice of Arrival Customs clearance procedures within the
Prior to the arrival of the vessel P&O Nedlloyd European Community are governed by the
will despatch a Notice of Arrival to the Notify Community Customs Code (Regulation 2913/92)
Party and Consignee named on the Bill of and the implementing Regulation 2454/93 (as
Lading or Waybill. This document provides amended). Throughout the EC the Single
details of the imported goods, expected vessel, Administrative Document (SAD) and
arrival date and the relevant regional office accompanying documents, such as a Commercial
which will be dealing with the consignment. It is Invoice, Packing List, Import Licence, GSP
important that the regional office is advised Certificate etc are submitted to Customs to
without delay if there are any amendments to secure the clearance of goods imported from
delivery requirements or a transfer of interest in third (non EC) countries. In some EC countries
the goods. (such as the UK) the Customs authorities
provide for import declarations to be submitted
(ii) Invoice
electronically and without accompanying
If sea freight and/or other charges are payable at documents, which may be held by the Importer
destination, an invoice detailing these charges subject to audit by Customs.
will be despatched to the nominated payer. In
such instances it is important to arrange At most EC ports P&O Nedlloyd can offer a
payment of these charges at the earliest Customs clearance service to Importers. It is in
opportunity, as freight and charges were due at the Consignee’s interest to forward to P&O
the time of issue of the Bill of Lading and Nedlloyd or other Freight Forwarder (if he is

31
using one) the necessary documentation to on the 2nd December 2000. The new law
enable Customs clearance to commence as soon dramatically affects the way manifests are
as possible. Normally Customs entries can be transmitted to U.S. Customs. The new law
lodged prior to the arrival of the vessel and requires that all Carriers must transmit their
therefore, if P&O Nedlloyd is acting as agent, manifests to U.S. Customs at least 24 hours in
documents should be posted to the appropriate advance of loading any goods at a foreign port.
regional office no later than four working days As an example, for a vessel loading at
prior to the vessel's arrival, in order to gain a Rotterdam, Hamburg and Felixstowe, we must
speedy clearance and avoid demurrage charges. transmit a manifest 24 hours before we load at
Rotterdam. We must send a second manifest 24
Imports from Other EC Countries
hours before we load at Hamburg and a third
EC goods shipped on P&O Nedlloyd’s intra manifest 24 hours before we load at Felixstowe.
community (i.e. between EC ports) services are After each manifest has been transmitted, U.S.
not subject to import Customs clearance by Customs has 24 hours to place “holds” on any
reason of the Customs union of the EC. goods that they want to have inspected before
they are loaded onto the vessel. These
(v) Bill of Lading inspections will take place in co-ordination with
Unless carriage is effected under a Waybill, the local foreign Customs authorities.
before goods can be released an original Bill of
Although this new system will place additional
Lading correctly endorsed, must be surrendered
burdens on Carriers and Exporters at foreign
to P&O Nedlloyd. This should be lodged as early
ports, it will expedite the delivery of goods at
as possible, since any delay in receiving this
U.S. ports because almost all manifest reviews
document could result in additional charges
by U.S. Customs will have already taken place
accruing. If you lodge your Bill of Lading at a
overseas. As a result, there should be very few
P&O Nedlloyd office other that at the point of
delays at U.S. ports.
clearance, please ensure that the latter office is
advised of this fact. (i) Arrival Notice

As mentioned earlier, payment of any freight Approximately seven (7) days prior to the arrival
charges must be made prior to the release of the of the vessel at a U.S. port, P&O Nedlloyd
goods. P&O Nedlloyd can effect FCL haulage at dispatches an “Arrival Notice” (AN) to the Notify
rates in accordance with the relevant Tariff. It is Party and Consignee named in the Bill of Lading
possible to effect LCL haulage at a cost which (or Waybill if the latter is used). This document
can be quoted on request. provides details of the imported goods, expected
arrival date of the vessel and the location of the
P&O Nedlloyd regional office which will be
B IMPORTS IN THE U.S.
dealing with the consignment. It is important
Customhouse Brokers have facilities at U.S. that this regional office is advised without delay
arrival ports and inland regional depots to clear if there are any amendments to delivery
goods. P&O Nedlloyd can assist with these requirements or a transfer of interest in the
arrangements if requested. Customers will goods.
appreciate that there are a number of
documentary restraints, both commercial and (ii) Customs Clearance
statutory, which have to be removed prior to It is in the Consignee's interest to forward to the
goods being released. Our computerised systems Customhouse Broker the necessary
are linked to the U.S. Customs Service to documentation to enable Customs clearance to
facilitate the speedy clearance of goods. commence promptly. Normally Customs entries
can be lodged three (3) days prior to arrival of
A new law was passed by the U.S. Congress and
the vessel.
signed by the President which became effective

32
The documents required for clearance may (iii) Bill of Lading
include: Before goods covered by a Bill of Lading can be
released, it must be correctly endorsed and
Certificate of Origin
surrendered to P&O Nedlloyd. This should be
Supplier's Invoice
done as soon as possible, since delay in receiving
Import Licence
the document could result in additional charges,
Packing List
such as terminal detention or container
Health Certificate, etc., as applicable
demurrage per diems which may accrue. In
Copy of the Bill of Lading
addition, Importers should be aware that goods,
If ocean freight is to be paid at destination, a which are not cleared and removed from the
Freight Invoice detailing the freight and charges ocean terminal within 8 days, may be taken into
due will be dispatched to the nominated General Order status, although actual practice
responsible party. In such instances it is may vary from one Customs District to another.
important to arrange payment of these charges General Order involves seizure by Customs. If
at the earliest opportunity, as freight and such goods are subsequently not released they
charges were due at the time of issue of the Bill may be sold without prior notice to the Importer
of Lading and delivery of the goods cannot be and expenses incurred deducted before remitting
effected before payment has been made. any balance to the Importer.

Normally there are three prerequisites to the (iv) Payment of Charges

Carrier releasing the goods to a Customer: As mentioned earlier, payment of freight and
charges must be made prior to the release of the
! Clearance by Customs or any other relevant
goods. P&O Nedlloyd can effect FCL trucking at
governmental agency, e.g. U.S. Department
rates provided in the relevant Tariff. It is
of Agriculture or the Food and Drug
possible to effect inland delivery of LCL
Administration.
shipments, where permitted by the rules of the
! Surrender of the original Bill of Lading applicable Tariff. Costs will be quoted on request
correctly endorsed through to party claiming as appropriate. A composite supplementary
delivery or proof of identity if the contract of account will be issued to cover charges for
carriage is not a Bill of Lading (e.g. a ancillary work or supplementary services that
Waybill). are performed.
! Payment of outstanding freight and charges.
(v) Imports into U.S. from China with Solid
Apart from the clearance of goods for domestic Wood Packing
use, there are many other potentially applicable (See Part 2 Section 4)
Customs procedures, relating to re-exportation,
for example. P&O Nedlloyd staff will be happy to
endeavour to provide relevant information on
request.

TRACK AND TRACE:

P&O Nedlloyd has introduced a “Track and Trace” facility for customers on its web site:
WWW.PONL.COM
This facility enables you to track the current status of your shipment using your P&O Nedlloyd Booking
Reference Number, Bill of Lading Reference or Container Number. The system is continuously updated
from the P&O Nedlloyd in-house systems and does not display any commercially sensitive information so
access does not require prior registration.

33
Part 1
Section 8: Merchants' Checklists
Whilst we make no claim that the following lists a reasonable period of time for the Credit to
are detailed and exhaustive, Merchants may find remain valid to give myself a chance to ship
them a useful aide memoire to physical and in time etc.). (Advice/assistance from
documentary points that need attention during Bankers/Carriers/ Chambers of Commerce
an international transaction. Clearly there will etc.)
be variations, according to local practices and the
Receipt of Documentary Credit
natures of the goods involved, but it is hoped
that these checklists will at least direct CHECK IMMEDIATELY. Does it contain any
Merchants' attention to matters where a little requirements with which I cannot comply (e.g.
attention now may prevent a lot of hassle later dates, routes, no transhipment, special clauses)?
and lead to a smooth uneventful transaction. If so NOW is the time to revert to the Buyer for
amendment. If you leave it until after shipment,
Viewed first from the standpoint of the Shipper... the Buyer has you over a barrel and will
probably want a discount to agree to any
SHIPPERS' CHECKLIST amendment, however minor.
A DOCUMENTARY
B PHYSICAL
Contract of Sale
1. How trustworthy is my Buyer? What is his Shipment
payment record? What steps do I need to 1. Do goods require any special attention
take to ensure I get paid and paid on time? during carriage (e.g. refrigeration,
(Advice/assistance from Bankers/Credit ventilation etc.)? If so the Carrier must be
Agencies). informed and the correct type of container
requested.
2. What INCOTERM do I use as the basis for
my Sale Contract? (See Part 1 Section 3.) 2. Is shipment FCL or LCL? This will affect
the level and type of packing and marking
3. Are there any statutory regulations in
required.
exporting or importing country which affect
this transaction and if so what must be done 3. Are any of the goods classified as hazardous
to comply with them? (Advice/assistance by IMO? Have all necessary declaration and
from Bankers/Chambers of Commerce). packing requirements been observed?

4. What vital points in the Sale Contract 4. ALL FCL containers must be inspected
do I need to control to ensure that my upon receipt and prior to packing to ensure
Buyer is not free to insert that they are clean and watertight (by
problem-causing provisions in the Letter internal visual inspection). Any that are not
of Credit when he opens it? (e.g. do I must be rejected.
nominate a Carrier, stipulate transhipment
allowed, not call for a Shipped-on-Board 5. If goods are refrigerated they MUST be at
endorsement - I get paid quicker that way, the correct temperature at the time of
call for a Combined Transport Document shipment and FCL packing must be such as
and not a Marine/Ocean Bill of Lading, to permit free circulation of cool air to avoid
stipulate places of receipt/delivery/ports of “hot spots”. Circulation channels must be so
loading/ discharge that are viable, stipulate constructed as not to collapse during transit.

34
6. Packing and securing must be such as to 2. Which INCOTERM do I use (see Part 1
prevent movement within the container Section 3)?
during transit (regular shipments of
cartonned goods should be designed with 3. Am I unhappy with any stipulations/
dimensions to create a tight fit module restrictions which the Shipper is insisting
within the container). Do not stow heavy upon in the Sale Contract?
items over light, nor liquids over solids.

7. DON'T overload. Ensure even weight Opening Letter of Credit

distribution within container, especially of 1. Is the Letter of Credit in conformity with
any large and/or irregularly shaped loads. the Contract of Sale?
Use dunnage where necessary to spread the
weight of heavy loads. 2. Are all of the stipulations/restrictions which
I am inserting in the Letter of Credit really
DO secure stow adequately, especially at
necessary? (Look carefully at each one and
door end to prevent fallout at discharge.
justify its inclusion or leave it out. Include
REMEMBER - if you pack the container you NOTHING on the basis of “might as well”,
are liable for any injury or damage caused “usual practice”, “doing no harm”).
by your failure to do a good job and need Particularly think carefully about the
insurance against this potential liability following:
(see Part 2 Section 6A Note).
a) No transhipment clause - Bank will
8. If consignment is FCL, has driver presented ignore anyway if goods containerised
a Carrier's seal (and not just some and Multimodal Bill of Lading issued -
nondescript model so he can swap to the see Part 1 Section 4B - so why put it in?
right one down the road after helping
b) Have I asked for the correct document
himself!)? Have YOU affixed seal and
as contract of carriage? (If you have
checked it is in position? Have you recorded
asked for a Marine/Ocean Bill of Lading
seal number on your documents? (see Part 2
then you must be thinking of Port-to-
Section 8).
Port shiping only. If you want Combined
If you have correctly dealt with all the above Transport then you should be requiring
points you should now be on your way to the a Combined (or Multi-modal) Transport
Bank confident of having your documents Document). Have I considered the
accepted and receiving payment. You can also be advantages of Waybills (see Part 1
confident that your risk management approach Section 9)?
has reduced or removed the chance of your goods
c) If the carriage is Combined Transport, is
being damaged in transit or of your incurring
a shipped-on-board endorsement really
liabilities as a result of this transaction.
necessary?

CONSIGNEE'S CHECKLIST d) Given the nature and frequency of

services from the Port of Loading, have I
allowed a sufficient period of validity for
Contract of Sale
the Credit to facilitate shipment?
1. Do I need to take steps to control the
quality/quantity of goods ordered to ensure 3. Are any special stipulations put into the
that what I order is what I get (e.g. preship Letter of Credit clear and unambiguous?
ment survey/tally into container etc.)? (Any abbreviations or references to
(Advice/ assistance from Bankers/ Chamber “standard” clauses or requirements MUST be
of Commerce). internationally recognised or confusion will
ensue and the transaction may be delayed
or incur additional expense).

35
Delivery 4. If delivery is FCL ensure that the advice in
1. Respond promptly to Arrival Notification Part 2 Section 8C(ii) relating to seals is
Form when received. observed.

2. If Bill of Lading issued, lodge an original 5. If delivery is LCL ensure that apparent
(duly endorsed) with Carrier and pay any order and condition is noted on delivery note
outstanding freight and charges due at time of delivery and any discrepancy is
destination promptly to preclude delay in additionally notified promptly to P&O
delivery. Nedlloyd.

3. Give prompt instructions relating to 6. If goods are damaged advise Cargo Insurers
Customs clearance to P&O Nedlloyd or your as well as P&O Nedlloyd so that a joint
Freight Forwarder, providing all necessary survey can be arranged where appropriate
data and documentation. and steps to mitigate loss agreed.

36
Part 1
Section 9: Straight Bills,Waybills
& E-commerce
There is much confusion on the precise nature To qualify as a “Straight Bill” the relevant U.S.
and function of Bills of Lading, Straight Bills of Statute requires the Bill to be made out direct to
Lading and Waybills under U.S. law and the a nominated Consignee and marked “Not
laws of most other countries in the world. To Negotiable” (as most U.S. trade Bills are). (See
avoid compounding this confusion the following top of specimen U.S. Trades Bill on Page 52.)
comparison is made between U.S. law and Presently this Act refers only to U.S. exports and
English law. Almost all other countries follow Inter-State traffic but, if and when the U.S.
the English law interpretation. MLA's proposed revision of U.S. COGSA 1936
comes into effect (see Part 2 Section 4: National
A STRAIGHT BILLS
Laws relevant to Combined Transport), the
Outside U.S. Law there is presently no definitive application of the Act will be extended to U.S.
authority as to the precise nature of a “Straight” Imports also.
Bill of Lading. In U.S. Law we have the guidance
of the Federal Bill of Lading Act 1916 (the Elsewhere in the world the position of the
Pomerene Act) but even there the updating Carrier delivering against a “Straight Bill” is
legislation now refers to “Non/Not Negotiable” unclear. There is reluctance to see the “Straight
Bills rather than use the term “Straight” which Bill” as being analogous to a Waybill and it is
appears in the original Act. (Latest update ref. general practice to require surrender of a
49 USC 80103 - United States Code.) “Straight Bill” in return for delivery of the goods
in the same way as for an “Order Bill”.
A “Straight Bill” is one where the “Consignee” is Clarification on this point is badly needed.
clearly nominated by name without any
qualification (“to the order of . . . ” or similar). It Meanwhile we suffer a potential conflict of laws
is the opposite of an “Order” or “Bearer Bill”, in U.S. trades. U.S. law says deliver U.S. exports
which is one where the “Consignee” is shown as on “Straight Bill” without surrender of
being “To Order” or with a name qualified by the documents. Local law at the point of import is
word “To the Order of . . . “ (or similar) or with a inclined to see all Bills of Lading as a means of
Consignee shown as “To Bearer”. controlling delivery, even if not transferring title.
Presently the U.S. Pomerene Act applies to U.S.
Worldwide a “Straight Bill” is not negotiable and exports only but U.S. Importers press for
cannot be used to transfer title by endorsement delivery without documents against a “Straight
(or passage of a blank endorsed Bill) in the way Bill”. To give itself protection to meet U.S.
that an or “Bearer Bill” can. Importers requirements P&O Nedlloyd may
make “Straight Bills” for U.S. imports “SCAR”
In the U.S. the Pomerene Act provides that
Bills”, by printing across the face “Straight
delivery of goods represented by a “Straight Bill”
Consignment - Automatic Release”: SCAR.
can be made to the nominated Consignee without
surrender of any documentation but merely upon
production of proof of identity. In short, in U.S.
law a “Straight Bill” is analogous to what we call
a Waybill - hence Americans have little use for
Waybills!

37
 Specimen of P&O Nedlloyd Waybill
Non-Negotiable Waybill for Combined Transport shipment or Port to Port shipment

Shipper Waybill No.:

Reference:

(If the name shown in this space is a Bank, the Bank named is specifically excluded from the list of parties coming within the definition of Merchant
Consignee in the Carrier’s contract of carriage and incurs no liability to the Carrier under said contract unless applying for delivery in its own name.)

Notify Party/Address (It is agreed that no responsibility shall attach to the Carrier or his Agents for failure Place of Receipt (Applicable only when this document is used as a Combined Transport Waybill)
to notify)

Vessel and Voy. No. Place of Delivery (Applicable only when this document is used as a Combined Transport Waybill)

Port of Loading Port of Discharge

Undermentioned particulars as declared by Shipper, but not acknowledged by the Carrier

Marks and Nos; Container Nos; Number and kind of Packages; description of Goods Gross Weight (kg) Measurement (cbm)

L L
B I
A Y
W
* Total No. of Containers/Packages received by the Carrier Movement Freight payable at

Received by the Carrier from the Shipper in apparent good order and condition (unless otherwise noted herein) the total number or quantity of Containers or other packages or units indicated in the box above entitled “*Total No. of Containers/Packages received by the Carrier” for
Carriage from the Place of Receipt or the Port of Loading, whichever applicable, to the Port of Discharge or the Place of Delivery, whichever applicable, SUBJECT TO THE TERMS OF THE CARRIER’S STANDARD BILL OF LADING TERMS AND CONDITIONS AND TARIFF
FOR THE RELEVANT TRADE, WHICH ARE MUTATIS MUTANDIS APPLICABLE TO THIS WAYBILL (copies of which may be obtained from the Carrier or his agents). Except for live animals and Goods which are stated herein to be carried on deck and are so carried, these
terms and conditions are warranted by the Carrier in respect of the sea portion of the Carriage to apply the Hague Rules or Hague Visby Rules, whichever would have been applicable if this Waybill were a Bill of Lading. In either case the provisions of Article III Rule 4 of the
Hague Visby Rules are deemed to be incorporated herein.
The contract evidenced by this Waybill is deemed to be a contract of carriage as defined in Article 1 (b) of the Hague Rules and Hague Visby Rules. However this Waybill is not a document of title to the Goods.
Delivery will be made to the Consignee named, or his authorised agents, on production of proof of identity at the Port of Discharge or the Place of Delivery, whichever applicable. Should the Consignee require delivery to a party and/or premises other than as shown above in the
“Consignee” box, then written instructions must be given by the Consignee to the Carrier or his agent. Unless the Shipper expressly waives his right to control the Goods until delivery by means of a clause on the face hereof, such instructions from the Consignee will be subject to
any instruction to the contrary by the Shipper.
Unless instructed to the contrary by the Shipper prior to the commencement of Carriage and noted accordingly on the face hereof, the Carrier will, subject to the aforesaid terms and conditions, process cargo claims with the Consignee. Claims settlement, if any, shall be a complete
discharge of the Carrier’s liability to the Shipper. The Shipper accepts the said standard terms and conditions on his own behalf, on behalf of the Consignee and the Owner of the Goods, and authorises the Consignee to bring suit against the Carrier in his own name but as agent of
the Shipper, and warrants that he has authority so to accept and authorise. The Shipper further undertakes that no claim or allegation in respect of the Goods shall be made against the Carrier by any person other than in accordance with the terms and conditions of this Waybill.

This Waybill is issued subject to the CMI Place and Date of Issue IN WITNESS whereof this Waybill is signed.
Uniform Rules For Sea Waybills

01
Beagle House, Braham Street, London E1 8EP 3/DRS W/B 3/03

38
STOP PRESS Exporters to use Waybills as an alternative to
The Singaporean Court of Appeal has just (Oct. the ubiquitous Bill of Lading with growing
2002) handed down a decision (APL v Peer Voss) success.
upholding the document of title status of a
Waybills have obvious advantages in situations
Straight Bill of Lading. The court appeared to
where a document of title is not required to act
consider that, because there is an alternative
as a “cheque for goods”, either to facilitate
document available where a contract of carriage
security of payment and delivery in an
that is not a document of title is required
international transaction or to facilitate
(Waybill), where a Bill of Lading is used it
negotiation whilst the goods are in transit to
should always be a document of title and
enable the goods to be sold and title passed. This
surrendered in return for the delivery of the
may be because shipment is to an associated
goods, even if it is not a negotiable document
company where payment is a book entry or
which can be used to transfer title (Straight Bill).
where alternative payment arrangements have
Thus both “Order” Bills and “Straight” Bills are
been made. The advantages include the absence
documents of title but only the former is
of the need to transmit paper documents to
negotiable, according to this decision.
destination to secure delivery, as delivery is
However there are also decisions elsewhere in made to the nominated Consignee (“Order”
the world (other than in the U.S.) that go the Waybills are not possible) against proof of
other way so nothing is settled. “The Brij” case in identity (usually a Delivery Order on Consignee's
the Hong Kong Court of First Instance is just headed stationery). In short a Waybill facilitates
one example. paperless transactions.

Accordingly, where a Bill of Lading is the However, until recently it was thought that there
contract of carriage, whatever type of Bill it is, was no way of using Waybills where security of
the Carrier’s only safe course of action, in the payment/delivery or subsequent sale whilst in
absence of clear provision to the contrary, is to transit was involved and that this would always
demand surrender of an Original in return for require a Bill of Lading, which, being a document
delivery. This conflict of law is regrettable and is of title, must always be a paper document. Thus,
likely to be the cause of further problems in the whilst the use of Waybills has increased, growth
future. (The effect of Clause 20 (7) of the PONL has been slow.
Bill of Lading may well negate the effect of this
Clearly, if a way could be found to use Waybills
decision where PONL is the Carrier.)
in Documentary Credits, whilst still meeting all
CMI and UNCITRAL are endeavouring to secure the requirements of the parties involved, their
uniformity in this area in a new transport use and application could be boosted.
convention but this will inevitably take time.
(ii) Waybill Approach to E-commerce
Firstly it is necessary to identify the parties
B WAYBILLS
involved (other than the Carrier) and their
(i) Introduction
requirements. Only if a Waybill can be adapted
A Waybill is a receipt and evidence of a contract to meet these requirements can it hope to
of carriage but not a document of title - rather succeed in the vast majority of international
like a “Straight Bill” under U.S. law excepting trade transactions, where presently a Bill of
that, not being a Bill of Lading, it is not Lading is viewed as the only acceptable
mandatorily subject to the relevant Carriage of document.
Goods by Sea Act (applying the Hague or Hague
Visby Rules which only apply to Bills of Lading 1. The Shipper: The Shipper's requirement is
and thus do apply to a “Straight Bill” but not a to be paid and to retain control over his
Waybill). goods until he is paid or has his Bill of
Exchange accepted.
Over the past 10 years or so some Carriers (or
groups of Carriers) have tried to persuade 2. The Consignee: Conversely the Consignee

39
 requires assurance that his Seller does not through a central registry of title (the Bank),
get paid without giving up control of the through whom all changes of title would be
goods to him or his agent (usually his Bank). registered, except that it is envisaged that the
Carrier acts as that (unpaid?) central registry.
3. The Bank: In a Documentary Credit, if a
The original title of these rules was “Rules for
Bank is advancing funds against documents,
the Electronic Transfer of Rights to Goods in
a Bank is looking for security for the
Transit” and this is a more accurate description
payment it makes (or promises to make) on
of them. Such a system would introduce
behalf of the Consignee in case of default by
substantial additional costs. The correct question
the Consignee (e.g. insolvency). A Document
is: “What do I use a Bill of Lading as a Document
of Title can provide this security.
of Title for and how can I achieve the same effect
4. The Insurer: The Insurer wishes to ensure in a different way capable of being controlled by
that, in the event he has to pay a claim, he EDI messages and, most importantly, without
has adequate recourse under subrogation to increasing costs?”
the Carrier on acceptable terms to minimise
Bearing in mind that any system suggested must
his net exposure.
meet the requirements of the four parties listed
The present Documentary Letter of Credit earlier, let us consider whether a Waybill can be
process using a Bill of Lading meets the adapted to do the job. In recent years the
requirements of all parties concerned but what introduction of new rules and laws have
happens when the use of E-commerce becomes enhanced the status of Waybills to a point where
more widespread and traders start looking for a what was not possible recently now appears to
paperless system so that they can trade wholly offer a distinct possibility in the near future.
electronically? The present system is paper based
Sellers & Buyers: Let us firstly consider the
but all the documents, other than the Bill of
conflicting requirements of Seller and Buyer,
Lading, can be converted into EDI messages. As
which can be met only if it can be arranged that
a Document of Title, the Bill of Lading, as we
payment to the Seller coincides with him
presently know it, has to be a paper document
relinquishing control of the goods to the Buyer or
and thus stands in the way of progress. Various
his agent (usually a Bank). Can a Waybill
suggestions have been made as to how to
facilitate this? Remember a Waybill is a contract
circumvent this problem but, so far, these have
between Shipper (Seller) and Carrier that was
failed for two reasons:
not subject to the 1855 Bill of Lading Act so that
1. The enquirer has asked the wrong question, (until recently) a Consignee acquired no rights
leading inevitably to a wrong answer. under a Waybill. The Shipper could vary the
identity of the nominated Consignee at will at
2. The suggestions made have involved a any stage of transit, so a Waybill, in its normal
complicated electronic process which would format, represents no security to a Consignee
increase costs without providing substantial (Buyer).
compensatory benefits.
The Carriage of Goods by Sea Act 1992 (which
The wrong question is: “how do I produce an repealed the 1855 Bill of Lading Act) went some
Electronic Bill of Lading”? Despite this being the way to redressing this problem by providing for
title of the Comite Maritime International (CMI) Consignees under Waybills to be in the same
Rules for Electronic Bills of Lading, it is a position as if they were Bill of Lading
misnomer. A Document of Title must be a Consignees, so far as becoming a party to the
tangible thing that cannot be reproduced in contract of carriage and being able to sue and be
original form so that its uniqueness assures sued on that contract in their own name, when
anyone with a full set of originals that they they approach the Carrier to claim delivery. As a
control the goods. The CMI Rules describe a Waybill does not need to be sent to destination to
process akin to the abortive “SEADOCS” system be surrendered to obtain delivery, it was not
of the Chase Manhattan Bank designed to perate possible to link the acquisition of this right to the

40
taking up of a document (as is the case with Bills Bill of Lading. The Bank has a vested interest in
of Lading) so this was the obvious “watershed” ensuring that the control of the goods passes
chosen for the Consignee to acquire contractual from the Shipper, so there should be no problem
rights and liabilities under a Waybill. in persuading the Bank to inform the Carrier of
its acceptance of the Waybill.
This was fine, so far as it went, but it did not
overcome the problem of synchronising the As it is not a document of title, a Waybill can be
payment to the Seller with the passing of control an electronic message or paper document. It is
of the goods to the Buyer. It did not remove the accordingly perfectly placed to bridge the gap
Shipper's right to vary the identity of the between paper trading and electronic trading,
Consignee of the goods during transit. either in part or in full. For example, a paper
Waybill can be used by the Shipper to negotiate
Some years ago SWEPRO (Swedish Simpler
the Credit with the Bank and thereafter the rest
Trade Procedures Board) attempted to
of the transaction can be EDI. Alternatively no
circumvent this problem with a suggested
paper need ever be issued. The Carrier would
NODISP (No Disposal) clause:
send an EDI Waybill message to Shipper and
“By acceptance of this Waybill the Shipper Bank and would receive by return an EDI
irrevocably renounces any right to vary the message from the Bank confirming that the
identity of the Consignee of these goods Waybill had been accepted against the Letter of
during transit.” Credit, thereby implementing the CONTROL
clause.
On the face of it this clause appears to achieve
its objective. Certainly it meets the requirements The beauty of this approach lies in the fact that
of the Consignee but what happens if, in a Letter Waybills, whether paper or electronic, cost no
of Credit transaction calling for a Waybill + more than Bills of Lading. Indeed many
NODISP clause, a Bank rejects the Shipper's Carriers, who charge for Bills of Lading, make no
documents for some reason? The Shipper has charge for Waybills, so there may be potential
irrevocably given up his right to vary the savings to be made. Furthermore the
identity of the Consignee without securing aggravation of procuring indemnities (at no
payment and the Consignee can receive the inconsiderable cost) to facilitate delivery of cargo
goods without paying for them. So the NODISP without production of Bill of Lading never arises
clause is fatally flawed for use in a Letter of with Waybills, thereby removing an irritating
Credit transaction. What is required is a clause source of aggravation for all concerned. All a
which brings into line the point at which the Consignee has to do to secure delivery under a
Shipper gets paid with that at which he gives up Waybill is to identify himself to the Carrier as
control of the goods. After researching the the manifested Consignee and claim delivery.
problem and discussing it with relevant parties, Documentation (other than as proof of identity)
P&O Nedlloyd offers the following alternative is not required. Hence a paperless transaction is
clause which, to avoid confusion, it calls a possible with security for the interests of Seller
CONTROL clause, as a possible solution: (Shipper) and Buyer (Consignee).

“Upon acceptance of this Waybill by a Bank If a Consignee wished to trade the goods whilst
against a Letter of Credit transaction (which in transit, the Electronic Bill of Lading system
acceptance the Bank confirms to the Carrier) provided for by the CMI rules may be more
the Shipper irrevocably renounces any right appropriate but, provided that trading is
to vary the identity of the Consignee of these restricted to destination, it is still possible to use
goods during transit.” Waybills. All that the Consignee under a Waybill
(with a CONTROL clause) needs to do is to
Using a Waybill with such a clause, the Shipper identify himself to the Carrier at destination
retains control of the goods until he gets paid but ahead of the arrival of the goods and request a
cannot get paid without giving up control of the Carrier's Delivery Order for the goods. He can
goods in the same way as with the passage of a then use that Delivery Order like a warrant for

41
the goods and give authority to a Buyer to collect So it would seem that a Waybill issued subject to
the goods by endorsing the Delivery Order over the CMI Uniform Rules for Sea Waybills (see
to him. In such a case the Buyer would not Appendix 2) ought to meet the criteria for
become a party to the contract of carriage and acceptability of Insurers, who can be as sure of
any claim against the Carrier would need to be their Hague/Hague-Visby Rules recourse with
routed via the original Consignee but at least he such a Waybill as if the contract of carriage were
is close to hand and not thousands of miles away, a Bill of Lading. All that is necessary is to
like the Shipper. require that the Waybill bears the legend:

Insurers: From the above it would seem that “This Waybill is issued subject to the CMI
there may be a way of satisfying Seller and Uniform Rules for Sea Waybills.”
Buyer in an international transaction, but what
This clause has appeared on all our Waybills
of the Insurer? What are his requirements?
since 1991.
The Insurer's main concern is that the contract
In addition to this, if the revision of U.S. COGSA
of carriage offers him reasonable right of
1936 proceeds as presently proposed (see Part 2
recourse against the Carrier after he has
Section 4: National Laws for details), Mandatory
indemnified the Merchant, against a signature
application of the new COGSA will extend to all
on a Letter of Subrogation. Insurers have
contracts of carriage, other than Charter Parties
traditionally favoured Bills of Lading and
(i.e. Waybills are included), thus further
opposed the use of Waybills because, if a Bill of
extending legislative recognition of Waybills and
Lading is issued, they can usually be assured of
further facilitating their use. This approach is
a minimum recourse based on the Hague or
already adopted in the legislation of some
Hague-Visby Rules through the Carriage of
countries (e.g. Australia).
Goods by Sea Act (COGSA) of the relevant
nation. This is a standard level of recourse out Bankers: A Banker needs security for his
of, or below which, a Carrier cannot contract and involvement in an international transaction, in
which is usually only available if a Bill of Lading which he makes a promise to pay the Shipper on
(or similar Document of Title) is issued. Hence behalf of the Consignee. Traditionally this was
Insurers have traditionally opposed the use of accomplished by being the “stakeholder” of the
Waybills, where there is total freedom of contract Bill of Lading in its capacity as a Document of
for the Carrier to offer inferior terms. Few (if Title (a “cheque for goods” or a “cloakroom ticket
any) do but the opportunity is there, whereas if a for cargo”, as this function has variously been
Bill of Lading is issued it is not and the Insurer described) which, as the Bill was made out to
does not have to read the contract to ascertain order and blank endorsed, thereby making it a
the level of recourse available to him. bearer document, meant that the holder of such
a Bill had control of the goods it represented.
In 1990 at their Paris meeting the Comite
Without possession of this “cheque for goods”
Maritime International (CMI), who were
how can a Bank exercise control over the cargo?
responsible inter alia for drafting the Hague
Rules, Hague Visby Rules and York Antwerp This can be done in two ways:
Rules for GA, approved adoption of the CMI
Uniform Rules for Sea Waybills. The title (a) The simplest way would be for the Banker to
referred to Sea Waybills to differentiate from Air be shown as Consignee on the Waybill. In
Waybills but the rules apply to Combined the normal way many Bankers refuse to
Transport Waybills as well as Sea Waybills. consider this as they do not wish to become a
Inter alia these admirably brief set of rules party to the contract of carriage and expose
provide that, if a Waybill is issued subject to themselves to the various indemnities to the
these Rules, then the contract of carriage which Carrier in the contract of carriage. In an
it evidences is in identical terms as would have effort to meet this objection P&O Nedlloyd
applied if a Bill of Lading were issued. puts the following clause against the legend:
“Consignee” in the Consignee Box on its
Waybills:
42
 “If the name shown in this space is a Bank, As explained earlier, using the system suggested
the Bank named is specifically excluded from by P&O Nedlloyd it should be possible to use
the list of parties coming within the Waybills instead of Bills of Lading in Letter of
definition of Merchant in the Carrier's Credit transactions with security for the
contract of carriage and incurs no liability to interests of all parties concerned: Seller, Buyer,
the Carrier under said contract unless Insurer, Banker and not forgetting the Carrier.
applying for delivery in its own name.” Such a Waybill would:

(b) Alternatively a “Bankers Lien” clause could 1. Be issued subject to the CMI Uniform
be used in the following terms: Rules for Sea Waybills

“Delivery of the Goods represented by this 2. Incorporate a CONTROL clause

Waybill can only be effected against written
and
authority from the . . . Bank who has a lien
on these Goods.” 3. Show the Bank as Consignee in the
Consignee Box on the Waybill, which
This approach would enable a Banker to act as
would be qualified by the waiver to the
“dog in the manger” and deny delivery to a
Bank outlined above,
Consignee but would not enable the Banker to
or
take delivery, so clearly the first mentioned
Bear a Banker's Lien clause.
alternative is preferable and the new qualifying
clause on P&O Nedlloyd's Waybills opens the Of course, if there is no need for security of
way for Banks to develop Documentary (or payment and delivery (e.g. payment is a book
Documentless!) Credits using Waybills by entry between sister companies or alternative
allowing themselves to be shown as Consignees payment arrangements are in operation) then
in Waybills qualified as suggested above. Waybills should already be in use (except to/from
countries where Bills of Lading are required by
(iii)Conclusion
statutory import/export procedures) without the
The possibility of using Waybills in Letter of
need for any of the above precautions, which are
Credit transactions is now recognised by the
needed only where a Letter of Credit is involved.
International Chamber of Commerce (ICC) in its
new Uniform Customs and Practice for It has been suggested that it would be far
Documentary Credits (UCP500) which came into simpler to adopt contractually the provisions of
effect on 1st January 1994. Unfortunately the Warsaw Convention that give the Air
neither UCP500 (the Rules) nor 511 Waybill a degree of pseudo document of title by
(Documentary Credits: UCP500 and 400 giving the Shipper the right to vary the identity
compared) mentions or explains the use of the of the Consignee if he can produce the
CONTROL clause, which is vital to a secure Consignor's copy of the Air Waybill. This would,
transaction where a Waybill is utilised and this of course, be possible and the system suggested
oversight will not assist in the promotion and mirrors the Air Waybill system to a large degree.
understanding of this concept. The difference is that the Sea Waybill system
takes a longer term view towards paperless
Nevertheless Waybills now enjoy recognition
E-commerce, which would be possible using the
from:
Sea Waybill system suggested but not with the
1. CMI - Uniform Rules for Sea Waybills current Air Waybill system.
(1990)
(iv) Advantages of Using Sea Waybills
2. English Law - Carriage of Goods by Sea
There are advantages to all parties in the use of
Act 1992
Sea Waybills instead of Bills of Lading:
and now
1. No requirement to send a document of title
3. ICC - UCP500. (1994) to destination to secure delivery, as is
necessary with a Bill of Lading.

43
2. No possibility of a requirement for a Letter Combined Transport Operators’ mutual insurer,
of Indemnity for delivery of cargo without both of whom have invested substantial funds in
Bill of Lading. the project. The basis of the Bolero procedure is
a Central Data Registry (or Core Messaging
3. In many trades Carriers charge for
Platform), available to members who join a
producing Bills of Lading but not Waybills,
“Club”, pay subscriptions and sign up to adhere
so chances to reduce costs as well as
to a substantial rulebook in order to be allowed
modernise systems.
to use the Bolero system and Central Data
4. Reduced chance of fraud or problems caused Registry for a fee. All participants: Shipper,
by lost or stolen documents. Consignee, Carrier, Bank, Forwarding Agent,
Insurer etc. must be paid up members of the
5. A Waybill can be a paper document or an Bolero “Club” and have signed to abide by the
electronic message. It is therefore the ideal rulebook before they can participate in a
medium to bridge the gap between paper transaction involving Bolero.
and Electronic Commerce in the most cost
effective way. The Bolero system bears many similarities to the
abortive SEADOCS system attempted by Chase
6. If a Waybill (with a Control Clause) is used Manhattan Bank some years ago, in that the
for the carriage of goods that the Merchant paper Bill of Lading as a document of title is
wishes to trade at destination prior to that replaced by a register of title holders held by a
arrival, this can be done using a Carrier's trusted third party, with whom contact is
Delivery Order, which the Merchant can authorised using secure electronic messages and
obtain from the Carrier at destination much unique codes known only to the current title
quicker than a Bill of Lading through a holder and the Central Data Registry. This
Documentary Credit System and which is replicates the document of title requirement, so
just as much a document of title as a Bill of that the contract of carriage is merely an
Lading. electronic Waybill or equivalent. This is the
Bolero Net system which was launched in 1999.
N.B. On account of local requirements for
In November 2001 the Bolero Surf system was
Bills of Lading, because exchange
launched to support it and to facilitate the
control/customs procedures are geared
automatic review of electronic documents. Other
towards use of this document, it is not
supporting services such as Bolero Advise and
possible to use Waybills in all trades.
Bolero Apply are also now available.
Most of the countries thus affected are
in the Middle East/South Asia area and Bolero has had a rather long gestation period
more specific information on this point dealing with the complexities of it’s rulebook and
is available from local P&O Nedlloyd the vagaries of various national laws in an
offices. international arena. This can be attributed
mostly to attempts to overcome the document of
C E-COMMERCE title problem by asking the wrong question (see
B (ii) above) which has led to an unnecessarily
Brief details of three schemes which seek to
complicated solution. In turn this has created the
facilitate paperless trading are shown below.
following four drawbacks to the Bolero system
There may be other projects in the pipeline
which any potential user must overcome or
elsewhere but the three below are known to be
accept.:-
currently available.
Cost
(i) Bolero
# Complexity costs money and the lawyers’
Bolero is a joint venture involving SWIFT
fees incurred preparing the rulebook alone
(Society for Worldwide Interbank Financial
must have been considerable.
Telecommunication), the inter bank settlement
# Operating a Central Data Registry is
organisation, and The TT Club, a major
expensive.

44
# Having to pay substantial subscriptions to It is evolutionary rather than revolutionary and
join a Club before having to pay to use it’s is flexible enough to handle any mixture of paper
services is quite a disincentive to potential and electronic messages (as well as 100% of
customers. either). One of the features of @GlobalTrade is
an "Electronic Bill of Lading" based on the
Complexity
claused Waybill idea outlined in B(ii) above.
# A good service should be simple at the point
of supply. Bolero can hardly claim to be this. Following pilot projects with international banks,
corporates and trade service providers in 2001
Flexibility
and 2002, the company says that it has found the
# Changing from paper to electronic messages
right approach to the market, focusing on
will not happen overnight so any new system
improving the handling of paper commercial
needs to be flexible enough to cope with a
documents and gradually moving to paperless
mixture of paper and electronic messages in
trade. The Company has answered the need of
the interim. Bolero does not have this
large Exporters that demand a multi-bank
flexibility and can handle electronic
solution for trade services.
transactions only.
# All parties needing to be subscribing and @GlobalTrade Export software together with
signed up members is an unattractive @GlobalTrade Network provides a solution that
restriction and if a non member becomes can be implemented in any country with any
involved the whole process has to revert to bank. The company is positioned on the market
paper and the time honoured procedure. as an Application Service Provider and software
development house for trade finance and trade
Liability
services solutions. It also manages
# If the Central Data Registry releases goods
@GlobalTrade Network which brings all parties
to the wrong party it limits it’s liability to
to a trade transaction onto the same electronic
US$100,000. This may be insufficient in
page.
many cases and, if so, who pays?
For more details see: www.cceweb.com
Nevertheless Bolero has secured several
customers who are in a position to accept or (iii)TradeCard
overcome these points and for whom the change TradeCard is a financial supply chain service
to 100% electronic trading is the major factor provider offering a secure transaction
and worth a premium. (A large retail outlet with infrastructure. It is revolutionary rather than
a large number of suppliers who is able to insist evolutionary and seeks to dispose of the UCP500
that any supplier must follow his procedures is rulebook and replace Letters of Credit with an
ideal.) However, at the time of going to print, it alternative system. This is probably why it has
has to be said that Bolero can hardly claim to not secured much support from the banking
have attracted a large clientele…..yet! community.

For more details see: www.bolero.net General Comment

Nobody doubts that eventually E-commerce will
(ii) @GlobalTrade
extend it’s tentacles to bring payment procedures
(@GlobalTradeTM. is a Secure Payment and
within it’s grasp. The only question is how and
Trade Management Network devised by CCE
when. It is rather like the development of video
Web. @GlobalTrade is capable of servicing
recorders, VHS or Betamax, which system will
multiple financial institutions around the world
prevail to overcome the problems which must be
and brings all parties in a trade transaction onto
solved before the changeover can take place?
the same electronic page. It incorporates
Watch this space!
straight-through processing by merging banks'
trade services systems with @GlobalTrade
Export system, thereby allowing users to
leverage their existing technology infrastructure.

45
Part 2 Contracts of Carriage
Section 1: Bills of Lading
A WHAT IS A BILL OF LADING? (i) Demise/ldentity of Carrier Clause
A Bill of Lading is a Receipt for Goods. In The means by which a Carrier, who is not the
the form of the P&O Nedlloyd document it is a owner of the vessel on which goods are shipped
receipt for goods received for carriage. Once a but who has issued Bills of Lading to Merchants,
shipped on board endorsement has been added (if withdraws from the contract once the goods are
required) it becomes a receipt for goods shipped loaded onto the vessel, leaving the contract of
on the nominated vessel. In a Doc. Credit the carriage as between the Merchant and the owner
P&O Nedlloyd document meets the requirements of the vessel direct. The vessel may fly a flag of
of both a Combined Transport Document and a convenience and be a one ship company, with all
Marine/Ocean Bill of Lading. the problems thereby posed to the Merchant in
trying to pursue any claim. Demise/IoC clauses
A Bill of Lading is Evidence of the Contract are valid in UK courts and most of the courts of
of Carriage. In most cases it is the contract. those countries whose law is based on English
However, the fact of it not being issued does not law but not in most European or U.S. courts.
mean that no contract exists, as the contract
commences at the time of booking and the The new provision in UCP500 requiring the
subsequent issue of the Bill merely confirms this Carrier to be identified in the signature box will
arrangement and provides the evidence of the overide IoC clauses on the reverse, as the order
contract thereby agreed. of precedence means that provisions on the front
overide provisions on the back.
An Order Bill of Lading is a Transferable
Document of Title to Goods. This means that (ii) Transhipment Clause
goods can be bought and sold merely by the The means by which a Carrier provides himself
passing of a Bill of Lading consigned “to order”, with the liberty to tranship and stipulates that,
whether of the Shipper or of a named Consignee, if he does so, the goods lie at the transhipment
provided that all the endorsements are in order. port at the Merchant's risk and are oncarried
(A Straight Bill is almost analogous to a Waybill upon the terms and conditions of the oncarrying
- see Part 1 Section 9A). vessel, with the Carrier acting as agent only, i.e.
the Carrier is a TTO not a CTO. (see Part 1
An apt comparison to bear in mind is that a Bill Section 2).
of Lading is to goods what a cheque is to money;
and all the criteria which apply to a cheque are (iii)Lighterage Clause
equally applicable to Bills of Lading. Which provides that, where goods are loaded
Alternatively think of it as a cloakroom ticket: no from or discharged into barge, lighterage is at
ticket = no coat: no Bill = no goods! the Merchant's risk.

None of the clauses described above appear in

B CLAUSES FOUND IN CONVENTIONAL the P&O Nedlloyd document, so that P&O
BREAKBULK BILLS OF LADING BUT Nedlloyd is the only party with whom you are
NOT IN THE P&O NEDLLOYD concerned, regardless of whether goods travel on
DOCUMENT a P&O Nedlloyd vessel, one of our partner's
vessels or a feeder vessel. Indeed, Clause 4
The following restrictive clauses, which
prevents you from dealing, or being required to
commonly appear in conventional Bills of
deal, with any other person. This is the situation
Lading, do not appear in the P&O Nedlloyd
unless the circumstances require otherwise (see
document, as they are considered to be
Part 1 Section 2C), in which case the face of the
inappropriate in a Combined Transport service.

46
Bill is clearly claused to draw the Merchant's such latitude and must be accurate.
attention to this departure from the norm.
(iii)Detail
Showing lengthy detail in a Bill of Lading wastes
C WHY IS THE CARRIER SO FUSSY time, money and is unnecessary. It is
ABOUT THE DETAIL IN A BILL OF discouraged where possible. Lengthy detail
LADING? should be restricted to the Letter of Credit and
Commercial Invoice (see Part 1 Section 4B -
As the Bill of Lading is usually a Document of
Comment on UCP500 Article 37(c)).
Title to the goods, goods can be bought and sold
merely by the passing of the Bill of Lading. It is
this transferability and negotiability that makes D THE FACE OF THE P&O NEDLLOYD
the document so valuable in international trade. UNIVERSAL BILL OF LADING
Only an Order Bill is negotiable and a
The P&O Nedlloyd Bill of Lading is an optional
transferable Document of Title (see Part 1
document which can be used as a Port-to-Port or
Section 9A). A Straight Bill is neither.
Combined Transport Bill of Lading according to
To allow payment to be made against the how it is completed (see definitions of Port-to-
passing of the document rather than the goods, Port Shipment and Combined Transport in
the Buyer has to be able to rely implicitly upon Clause 1). It has further flexibility to mix Port-
certain details shown on the Bill of Lading. to-Port at one end with Combined Transport at
the other (see Clause 6(3)).
The Carrier is legally prevented from denying
the accuracy of any detail which he has The identities of the Carrier and the agent
acknowledged on the Bill of Lading. In legal signing on his behalf are clear from the
terms this is known as “the doctrine of estoppel” signature clause. Thus the Bill complies fully
and applies once the Bill is in the hands of “an with the requirements of UCP500 on signature
innocent third party purchaser for value”. clauses (see Part 1 Section 4B(a)i).

Any Carrier, who knowingly shows incorrect (See page 56 for example of Bill of Lading face)
details in the Bill of Lading to comply with
Shipper
Letter of Credit requirements, joins the Shipper
This space must be completed with the name of
as a party to fraud on the Consignee.
the party with whom the contract of carriage has
Therefore, the Carrier has to be very careful been concluded by the Carrier. It may show the
about what detail he acknowledges in the Bill of actual Shipper or the Shipper's Freight
Lading. The basic rule that the Carrier will Forwarder, either as a principal or as a disclosed
apply, at all times when producing the Bill of or undisclosed agent (see Clause 3).
Lading, is that he can show anything so long as
Consignee or Order
it is true and not unduly restrictive.
This space may be completed in one of four ways:
The following examples illustrate this:
# With the name of the Consignee -
(i) Temperatures unqualified. (This is a “Straight” Bill - see
See Part 1 Section 5C(iii). Part 1 Section 9A.)

(ii) Dates # “To order”.

Two dates may appear on a Bill of Lading: the In this case the Shipper is also the
date of issue at the bottom and the date of Consignee and it is to him that the Carrier
shipment on board. The Bill of Lading is a must look for delivery instructions. These
receipt and, as such, may be dated for issue on instructions may be given:
any date after the goods come into the hands of
(i) By specific endorsement on the Bill of Lading
the Carrier for carriage (but not before). The
i.e. Deliver to J Smith and Co. (Stamp and
date of shipment on board, however, carries no
signature of Shipper).

47
(ii) By attaching authorised delivery instructions Notify Party/Address
on the Shipper's stationery - i.e. a Delivery The name of the party to whom, in most Trades,
Order from Shipper to Consignee. P&O Nedlloyd sends its Arrival Notification
Form advising of goods coming forward for
(iii) By means of a blank endorsement on the Bill
delivery. This is done gratuitously by P&O
of Lading and passing the document to the
Nedlloyd to ensure smooth delivery, but there is
Consignee i.e. Shipper's stamp and
no obligation upon it to do so and the
signature with no qualifications.
responsibility to monitor transit and present
# “To the order of” (a named party). himself to take delivery at the appropriate time
In this case it is the named party who must in theory still rests with the Merchant (see
give delivery instructions. (The difference Clause 20 (1)). However, as the ANF system has
between this and a “Straight” Bill is that been in operation for over 30 years now,
this Bill is a transferable document of title unilateral departure from it by the Carrier would
whereas a “Straight” Bill is not probably be viewed as unreasonable.
transferable.)
Vessel and Voyage Number/Port of
# “To Bearer”. Loading/Port of Discharge.
This is equivalent to an “Order” Bill blank If the Place of Receipt/Place of Delivery boxes are
endorsed. That is to say it can be used to blank, the Bill is a Port-to-Port contract, so the
transfer the goods merely by passage of the Ports of Loading and Discharge are the points of
document without any need for endorsement. commencement and termination of the contract
of carriage. Otherwise they are commercial
Note A blank endorsed “Order” and a “Bearer” detail, usually necessary for Doc. Credit
Bill of Lading are bearer documents and the purposes, but of no more significance than any
Carrier must make delivery to whoever presents other item of data on the document.
them (unless he has reason to suspect fraud). (Note the definitions of these items in Clause 1.)

Thus it will be seen that, like a bearer cheque, a Place of Receipt/Place of Delivery
blank endorsed “Order” or “Bearer” Bill is a Only used if Combined Transport is involved (see
dangerous document. However, it is a much used Clause 6(3)), in which case they indicate where
document on account of the requirements of the contract of carriage commences and
Banks advancing money against documents to terminates.
finance foreign trade.
Undermentioned Particulars as Declared
A Bill contains indemnities to the Carrier which by Shipper but not acknowledged by the
impose liabilities upon the Merchant (see Part 2 Carrier (see Clause 11).
Section 2). A Bank advancing funds requires the The main details shown in the Bill of Lading are
security of documents, which it can use to commercial details provided and required by the
foreclose on the goods if need arises, but does not Shipper for commercial purposes, the accuracy of
wish to become a party to the contract of which the Shipper warrants (Clause 12 (2) & (3))
carriage, in case it thereby incurs any liabilities. and for which the Carrier accepts no
Thus the Bank can use the Bill as a document of responsibility.
title to take delivery of the goods if it has to but,
if it becomes aware of liabilities attaching to the It is superfluous for a Shipper to require the
goods, it can effectively conceal its interest and same full description of the goods here as is
avoid them. required in the commercial invoice. Certainly it
is not required by the Bank under the terms of
Hence blank endorsed “Order” Bills of Lading the Letter of Credit, unless the Credit
are the usual requirement in a Doc. Credit specifically requires it (see Part 1 Section 4B).
transaction, despite the dangers they represent.

48
 Specimen of P&O Nedlloyd Bill of Lading
Bill of Lading for Combined Transport shipment or Port to Port shipment

Shipper B/L No.:

Reference:

Consignee or Order (for U.S. Trade only: Not Negotiable unless consigned ‘To Order’)

Notify Party/Address (It is agreed that no responsibility shall attach to the Carrier or his Agents for failure Place of Receipt (Applicable only when this document is used as a Combined Transport Bill of Lading)
to notify (see clause 20 on reverse))

Vessel and Voy. No. Place of Delivery (Applicable only when this document is used as a Combined Transport Bill of Lading)

Port of Loading Port of Discharge

Undermentioned particulars as declared by Shipper, but not acknowledged by the Carrier (see clause 11)
Marks and Nos; Container Nos; Number and kind of Packages; Description of Goods Gross Weight (kg) Measurement (cbm)

* Total No. of Containers/Packages received by the Carrier Movement Freight payable at

Received by the Carrier from the Shipper in apparent good order and condition (unless otherwise noted herein) the total number or quantity of Containers or other packages or units indicated in the box
above entitled “*Total No. of Containers/Packages received by the Carrier” for Carriage subject to all the terms and conditions hereof (INCLUDING THE TERMS AND CONDITIONS ON THE REVERSE
HEREOF AND THE TERMS AND CONDITIONS OF THE CARRIER’S APPLICABLE TARIFF) from the Place of Receipt or the Port of Loading, whichever is applicable, to the Port of Discharge or the
Place of Delivery, whichever is applicable. If the acknowledged tally is of Containers, this indicates that the Container has been packed and sealed by the Merchant at his premises without the Carrier
being represented and able to check or verify either the tally of Goods or the stowage, which are consequently unknown to him (See Clause 8). The Merchant accepts that, except by special arrangement or
pursuant to Clause 9 hereof, Containers are not weighed by the Carrier at any time. If the Carrier so requires, before he arranges delivery of the Goods one original Bill of Lading, duly endorsed, must be
surrendered by the Merchant to the Carrier at the Port of Discharge or at some other location acceptable to the Carrier. In accepting this Bill of Lading the Merchant expressly accepts and agrees to all its
terms and conditions whether printed, stamped or written, or otherwise incorporated, notwithstanding the non-signing of this Bill of Lading by the Merchant. Without prejudice to the generality of this
reference, attention is drawn, inter-alia, to Clauses 12 (Shipper's/Merchant's Responsibility), 19 (Dangerous Goods) and 24 (Law & Jurisdiction).
Number of Original Bills of Lading Place and Date of Issue IN WITNESS of the contract herein contained the number of originals
stated opposite has been issued, one of which being accomplished
the other(s) to be void
EXCESS VALUATION: REFER TO CLAUSE 7 (3) ON REVERSE SIDE (U.S. TRADE ONLY). . . . . .

01
1/DRS B/L5 8/00

49
! Total Number of Containers/Packages from the days when various originals were sent
received by the Carrier by different means to destination to try to ensure
This is the tally which the Carrier acknowledges that at least one arrived before or at the same
and for which he accepts responsibility. In the time as the goods to facilitate delivery (see
case of FCL goods, it will be one or a number of penultimate sentence in Incorporation Clause).
container(s) and, in the case of LCL goods, it will As more than one original exists, any one of
be a tally of pieces or packages (note cross which carries title to the goods, the only way the
reference in Incorporation Clause and Clause Buyer can be sure of title is to ensure that he
11). In the case of Multiple Bill of Lading FCLs has all the originals (not copies of originals - to
it will be “1 of . . . part cargoes in the Container” say that would be a contradiction in terms). For
(see Clause 21(2)). this reason all Bills must state how many
originals have been issued so that any Buyer can
Movement
check whether or not he has a full set of
This information is incorporated to provide
originals.
details of the movement at both ends of the sea
transit. Place and Date of Issue
Place where the Bill of Lading was issued and
Freight payable at
date thereof. This date may be any date after the
This is an indication of where the Shipper has
goods have been received for carriage but not
told the Carrier that he wishes the freight to be
before. In this respect the Bill of Lading is
paid. It is not an undertaking by the Carrier that
viewed as a receipt. By contrast the date of any
freight is only payable at this place and if the
“Shipped on Board” endorsement must reflect
Carrier is unable to collect freight here he may
the precise date of shipment.
exercise his lien for freight to refuse delivery
until someone pays the freight or require the So far as place of issue is concerned, this
Shipper to pay it, notwithstanding that delivery assumes importance as it could trigger the
has been effected. application of Hague Visby or Hamburg Rules if
it is in a state whose law applies one of those
Incorporation Clause
sets of Rules. In these days of computer printing
This is the clause on the face of the Bill of
of documents from a central control at remote
Lading which links the terms and conditions on
locations in neighbouring countries, who may
the reverse of the Bill of Lading and in the Tariff
just be landlocked and thus not containing the
with the details set out on the face into one
port from which the goods are shipped, the
contract. Furthermore it is the Carrier's
correct identity of “place of issue” is debatable to
acknowledgement of the tally shown in the “$
say the least.
Total No. of Containers Packages received by the
Carrier” box and is thus an indication whether Signature Clause
the shipment is on FCL or LCL terms. It also Above the authenticating signature the provision
provides for the acceptance of the terms and in the Incorporation Clause for one original
conditions of the contract by the Merchant (see probably needing to be surrendered to secure
definition in Clause 1) and the probable need to delivery is reinforced with the provision that
surrender one original to secure delivery at after delivery has taken place against one
destination (see Signature Clause). This clause original Bill all other originals of the same
also brings some of the more important tenure become worthless. A full set of originals is
provisions of the contract to the attention of the not necessary to secure delivery, one only will do.
Merchant, who might not otherwise take the
Note that the Bill is signed “For P&O Nedlloyd
time to read the reverse where these provisions
Limited as Carrier” thus leaving no doubt as to
are set out in detail.
the identity of the contracting Carrier without
Number of Original Bills of Lading need to resort to the Definitions Clause. This
Bills of Lading are usually issued in sets of 2 or complies with the requirements of UCP500
3 originals together with a number of non- Articles 23-6 a(i) (see Part 1 Section 4B).
negotiable copies for office/filing use. This dates
See Part 1 Section 4B for advice re Signature Clause & Shipped on Board
endorsements and ways to avoid potential problems.
50
E THE FACE OF THE P&O NEDLLOYD of Lading and passing the document to the
NORTH AMERICAN BILL OF LADING Consignee - i.e. Shipper's stamp and
The P&O Nedlloyd North American Bill of signature with no qualifications.
Lading is an optional document which can be
“To the order of” (a named party). In this
used as a Port-to-Port or Combined/Through
case it is the named party who must give
Transport Bill of Lading according to how it is
delivery instructions. (The difference
completed (see definitions of Port-to-Port
between this and a “Straight” Bill is that
Shipment and Combined Transport in Clause 1).
this Bill is a transferable document of title
It has further flexibility to mix Port-to-Port at
whereas a “Straight” Bill is not transferable.)
one end with Combined Transport at the other
(see Clause 6 (3)). “To Bearer”.
This is equivalent to an “Order” Bill blank
The identity of the Carrier is shown on the face
endorsed. That is to say it can be used to
of the Bill in the Signature Clause and is
transfer the goods merely by passage of the
specified in the definition in Clause 1 Thus the
document without any need for endorsement.
Bill fully complies with the requirements of
UCP500 on Signature Clauses (see Part 1 Note: A blank endorsed “Order” and a “Bearer”
Section 4B(a)i). Bill of Lading are bearer documents and the
Carrier must make delivery to whoever presents
(See page 52 for example of Bill of Lading face)
them (unless he has reason to suspect fraud).
Shipper/Exporter
Thus it will be seen that, like a bearer cheque, a
This space must be completed with the name of
blank endorsed “Order” or “Bearer” Bill is a
the party with whom the contract of carriage has
dangerous document. However, it is a much used
been concluded by the Carrier. It must show the
document on account of the requirements of
actual Shipper not merely a Shipper's
Banks advancing money against documents to
Forwarding Agent (see Clause 3). Shipper
finance foreign trade.
Number is assigned by the Carrier for reference.
An NVOCC is a Shipper under U.S. law but A Bill contains indemnities to the Carrier which
must indicate its status as an NVOCC to the impose liabilities upon the Merchant (see Part 2
Carrier and maintain a Tariff and Bond with the Section 2). A Bank advancing funds requires the
Federal Maritime Commission (“FMC”). security of documents, which it can use to
foreclose on the goods if need arises, but does not
Consignee
wish to become a party to the contract of
This space may be completed in one of four ways:
carriage, in case it thereby incurs any liabilities.
With the name of the Consignee -
Thus the Bank can use the Bill as a document of
unqualified. (This is a “Straight” Bill - see
title to take delivery of the goods if it has to but,
Part 1 Section 9A.)
if it becomes aware of liabilities attaching to the
“To order”. goods, it can effectively conceal its interest and
In this case the Shipper is also the avoid them.
Consignee and it is to him that the Carrier
Hence blank endorsed “Order” Bills of Lading
must look for delivery instructions. These
are the usual requirement in a Doc. Credit
instructions may be given:
transaction, despite the dangers they represent.
(i) By specific endorsement on the Bill of Lading
The Consignee Number is assigned by the
i.e. Deliver to J Smith and Co. (Stamp and
Carrier for reference.
signature of Shipper).
Notify Party
(ii) By attaching authorised delivery instructions
The name of the party to whom, in most Trades,
on the Shipper's stationery - i.e. a Delivery
P&O Nedlloyd sends its Arrival Notice advising
Order from Shipper to Consignee.
of goods coming forward for delivery. This is
(iii) By means of a blank endorsement on the Bill done gratuitously by P&O Nedlloyd to ensure

51
 Specimen of P&O Nedlloyd North American Bill of Lading

P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
BILL OF LADING
NedlloydNedlloyd P&O FOR Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll
COMBINED TRANSPORT OR
O Nedlloyd
PORT TONedlloyd PORT SHIPMENT P&O NedlloydNedlloyd P&O www.ponl.com Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
NOT NEGOTIABLE UNLESS CONSIGNED “TO ORDER”

P&O Nedlloyd Limited • P&O Nedlloyd BV • Farrell Lines Incorporated • North American Trade
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O
BOOKING NUMBER
SHIPPER / EXPORTER
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&OBILL OF LADING NO.
Nedlloyd P&O Nedll BROKERAGE
Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedl
EXPORT REFERENCES
&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
O P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
CONSIGNEE FORWARDING AGENT - REFERENCES
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P Nedlloyd P&O
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd POINT ANDP&O
COUNTRY Nedlloyd
OF ORIGIN P&O Nedlloyd P&O Nedlloyd
NedlloydNedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll
(It is agreed that no responsibility shall attach to the Carrier or his Agents for failure
OtoNOTIFY
Nedlloyd PARTY
notify of the arrival ofNedlloyd
the goods (see clause P&O NedlloydNedlloyd P&O Nedlloyd
20 on reverse))
ALSO NOTIFY / ROUTING / INSTRUCTIONS
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedl
&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
*PRECARRIAGE BY * PLACE OF RECEIPT BY PRECARRIER
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
O P&O Nedlloyd P&O Nedlloyd PORT
EXPORTING CARRIER (VESSEL)
P&O Nedlloyd P&O Nedlloyd
OF LOADING
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
LOADING PIER / TERMINAL
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P Nedlloyd P&O
Nedlloyd
PORT OF DISCHARGE P&O Nedlloyd P&O Nedlloyd * PLACE OF DELIVERY P&O NedlloydTYPE
BY ONCARRIER P&O Nedlloyd P&O Nedlloyd P&O P&O Nedlloyd
OF MOVEMENT

P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O NedlloydP&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd H
P&O PARTICULARS NedlloydFURNISHED P&O Nedlloyd
BY SHIPPER (butP&O Nedlloyd P&O Nedlloyd
not acknowledged by the Carrier (see clause 11)
MARKS AND NUMBERS NO. OF PKGS. M DESCRIPTION OF PACKAGES AND GOODS GROSS WEIGHT MEASUREMENT
NedlloydNedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll
O Nedlloyd Nedlloyd P&O NedlloydNedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedl
&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
O P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P Nedlloyd P&O
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O NedlloydP&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
NedlloydNedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll
OEXCESS
Nedlloyd VALUATION: Nedlloyd
REFER TO CLAUSE P&O NedlloydNedlloyd
7 (3) ON REVERSE SIDE P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
ITEM NUMBER
P&OFREIGHT NedlloydCHARGES P&O PAYABLE Nedlloyd AT: P&O Nedlloyd BY P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O
** TOTAL NO. OF CONTAINERS/PACKAGES RECEIVED BY THE CARRIER
Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&OAND
FREIGHT Nedlloyd
CHARGES P&O Nedlloyd P&O Nedll COLLECT
PREPAID Nedlloyd
P&O
Received byNedlloyd P&O
the Carrier from the Shipper Nedlloyd
in apparent P&O
good order and condition (unless Nedlloyd
otherwise
noted herein) the total number or quantity of Containers or the other packages or units indicated in
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedl
&Osubject Nedlloyd
to all the terms andP&O Nedlloyd
conditions hereof (INCLUDING THE P&O TERMSNedlloyd
the box above entitled **“Total No. of Containers/Packages received by the Carrier” for Carriage
AND CONDI- P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
TIONS ON THE REVERSE HEREOF AND THE TERMS OF THE CARRIER’S APPLICA-
P&O
BLE TARIFF) Nedlloyd
from the Place of P&O Nedlloyd
Receipt or the P&O
Port of Loading, whichever Nedlloyd
is applicable,
Port of Discharge or the Place of Delivery, whichever is applicable. If the Carrier so requires,
to the P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
Obefore
P&O
rendered
he arranges delivery of the Goods one original Bill of Lading, duly endorsed, must be sur-
by theNedlloyd P&O
Merchant to the Carrier at the Nedlloyd
Port of Discharge or at P&Osome other Nedlloyd
location
acceptable to the Carrier. In accepting this Bill of Lading Merchant expressly accepts and agrees
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
to all its terms and conditions whether printed, stamped or written, or otherwise incorporated,
notwithstanding the non-signing of this Bill of Lading by the Merchant. P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P Nedlloyd P&O
Nedlloyd
IN WITNESS whereof P&O Nedlloyd P&O Nedlloyd
original Bills P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O Nedlloyd
of Lading (unless other-
wise stated above) have been signed, one of which being accomplished, the others shall be void.

P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O NedlloydP&O Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O
AS AGENT(S) ONLY Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
NedlloydNedlloyd
*APPLICATION FOR COMBINED TRANSPORT ONLY
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedll
EXCESS VALUE CHARGE (SEE CLAUSE 7 (3))
O Nedlloyd Nedlloyd P&O NedlloydNedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd
B/L NO. MO. DAY YEAR
TOTAL CHARGES CONVERTED TO USD
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd RESP. P&O CODENedlloyd P&O Nedlloyd P&O Nedlloyd P&O P&O

Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O TOTAL

Nedlloyd CHARGES
P&O Nedlloyd P&O Nedll Nedlloyd
P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedl
&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd P&O Nedlloyd REV. 6/2003

52
smooth delivery but there is no obligation upon Brokerage
them to do so and the responsibility to monitor Completed with an N or Y to indicate whether or
transit and present himself to take delivery at not Forwarding Agents Commission has to be
the appropriate time in theory still rests with the paid on the consignment in question.
Merchant (see Clause 20 (1)). However, as the
Export References
AN system has been in operation for over 30
This space is used by the Shipper or his
years now, unilateral departure from it by the
Forwarder for Bank or other references for his
Carrier would probably be viewed as
convenience.
unreasonable.
Forwarding Agent - References/FMC
The Notify Number is assigned by the Carrier for
Number
reference.
For shipments from the U.S., only FMC licenced
Precarriage by/Place of Receipt by Freight Forwarders can receive
Precarrier commission/brokerage from the Carrier for
If goods and container(s) are received from forwarding services. In order to do so the FMC
outports by feeder vessel for transhipment onto licence number of the Forwarder must be
the deep-sea vessel, these spaces will be used to inserted in the space indicated and the
show the port at which the Carrier received the Forwarder's name etc. must be shown. Note that
goods and container(s) for carriage. If they have a Freight Forwarder is the Merchant's agent
been received from an inland point, the place at whilst a Freight Broker is the agent of the
which he received the goods will be recorded Carrier and does not perform forwarding services
here. for the Merchant.

Exporting Carrier (Vessel)/Port of Point and Country of Origin

Loading/Port of Discharge. If P&O Nedlloyd do not effect the precarriage it
If the Place of Receipt/Place of Delivery boxes are will be the case that the contract of carriage does
blank, the Bill is a Port-to-Port contract, so the not commence at the point of origin of the goods.
Ports of Loading and Discharge are the places of As this is data often required by authorities,
commencement and termination of the contract provision is made to record it here.
of carriage. Otherwise, if Places of Receipt and/or
Also Notify/Routing/lnstructions
Delivery are shown, Ports of Loading/Discharge
A second Notify Party may be identified in this
are commercial detail, usually necessary for Doc.
space or special routing requests may be
Credit purposes, but of no more significance than
recorded, which P&O Nedlloyd will endeavour to
any other item of data on the document. (Note
accommodate but which they do not guarantee to
the definitions of these items in Clause 1.)
follow.
Place of Delivery by Oncarrier
Loading Pier/Terminal
If Combined Transport is involved (see Clause
The identity of the place at which the Carrier
6(3)), this space is used to indicate where the
accepts the loaded container for carriage.
contract of carriage terminates. It can also be
used in the case of Port-to-Port carriage where a Type of Movement
Connecting Carrier effects the final Delivery This space will be used to indicate the type of
after taking over the goods from the Contracting service (see Part 1 Section 2E).
Carrier at a transhipment port.
Particulars Furnished by Shipper (but not
Booking Number acknowledged by the Carrier (see Clause 11).
This is a unique reference number allocated at The main details shown in the Bill of Lading are
the time of booking to identify the Customer's commercial details provided and required by the
order. It should be quoted in all subsequent Shipper for commercial purposes, the accuracy of
dialogue and correspondence to facilitate speedy which the Shipper warrants (Clause 12(2) & (3))
reference to the correct data. and for which the Carrier accepts no
responsibility.

53
It is superfluous for a Shipper to require the provisions of the contract to the attention of the
same full description of the goods here as is Merchant, who might not otherwise take the
required in the commercial invoice. Certainly it time to read the reverse where these provisions
is not required by the Bank under the terms of are set out in detail.
the Letter of Credit unless the Credit specifically
Number of Original Bills of Lading
requires it (see Part 1 Section 4B).
Bills of Lading are usually issued in sets of 2 or
Excess Valuation 3 originals together with a number of non-
Unless this section is completed and additional negotiable copies for office/filing use. This dates
freight paid, the limitations in Clauses 6 and 27 from the days when various originals were sent
will apply. by different means to destination to try to ensure
that at least one arrived before or at the same
Freight Charges Payable at:
time as the goods to facilitate delivery (see
This is an indication of where the Shipper has
penultimate sentence in Incorporation Clause).
told the Carrier that he wishes the freight to be
As more than one original exists, any one of
paid. It is not an undertaking by the Carrier that
which carries title to the goods (see Signature
freight is only payable at this place and if the
Clause), in the event of sale of the goods, the
Carrier is unable to collect freight here he may
only way the Buyer can be sure of title is to
exercise his lien for freight to refuse delivery
ensure that he has all the originals (not copies of
until someone pays the freight or require the
originals - to say that would be a contradiction in
Shipper to pay it, notwithstanding that delivery
terms). For this reason all Bills must state how
has been effected.
many originals have been issued so that any
Item Number Buyer can check whether or not he has a full set
This is the Tariff Code and Item Number to show of originals.
what Tariff freight rate has been applied.
Signature Clause
!! Total Number of Containers/Packages Above the authenticating signature the provision
received by the Carrier in the Incorporation Clause for one original
This is the tally which the Carrier acknowledges probably needing to be surrendered to secure
and for which he accepts responsibility. In the delivery is here reinforced with the provision
case of FCL goods, it will be one or a number of that after delivery has taken place against one
container(s) and, in the case of LCL goods, it will original Bill all other originals become worthless.
be a tally of pieces or packages (note cross A full set of originals is not necessary to secure
reference in Incorporation Clause and Clause delivery - one only will do.
11). In the case of Multiple Bill of Lading FCLs
Note that the Bill is signed “For P&O Nedlloyd
it will be “1 of . . . . . . part cargoes in the
Limited as Carrier” thus leaving no doubt as to
Container” (see Clause 21(2)).
the identity of the contracting Carrier without
Incorporation Clause need to resort to the Definitions Clause. This
This is the clause on the face of the Bill of complies with the requirements of UCP500
Lading which links the terms and conditions on Articles 23-26 a(i) (see Part 1 Section 4B).
the reverse of the Bill of Lading and in the Tariff
Bill of Lading Number and Date of Issue
with the details set out on the face into one
Note that the date shown here is the date of
contract. Furthermore it is the Carrier's
issue of the Bill of Lading and not the date of
acknowledgement of the tally shown in the “$$
shipment on board.
Total No. of Containers/ Packages received by the
Carrier” box and is thus an indication whether Freight and Charges
the shipment is on FCL or LCL terms. It also Details of the Freight and Charges on the goods
provides for the acceptance of the terms and and whether they are to be prepaid or are for
conditions of the contract by the Merchant (see collection at destination. These details are
definition in Clause 1) and the probable need to usually only shown on the non-negotiable copies
surrender one original to secure delivery at of the Bill, where they constitute an invoice, the
destination (see Signature Clause). This clause space being left blank on the originals.
also brings some of the more important

54
Part 2
Section 2: The P&O Nedlloyd
Contract of Carriage
A INTRODUCTION and reference must be made to the full texts in
Shippers and Consignees need to acquire a basic the P&O Nedlloyd Bill of Lading for full details
knowledge of the contract of carriage for their of the contract. Therefore care should be taken in
goods, the terms of which have changed so much using the Guide, which is more of an index as to
with the advent of Combined Transport and where to look to find appropriate conditions than
consequent changes in legislation. Because an explanation of the conditions themselves.
different Carriers' Bill of Lading terms and
B BILL OF LADING TERMS &
conditions can vary so much (and are able to do
CONDITIONS
so on account of the absence of mandatory law in
parts of a Combined Transport movement),
Clause 1: Definitions
Merchants should familiarise themselves with
Words which are used extensively throughout
the terms of the contracts of carriage into which
the contract are defined to put their
they enter. As is explained in Part 1 Section 2,
interpretation beyond doubt and to allow one
the fact that a Bill bears the legend “Combined
word in the subsequent clauses to convey a full
Transport” is no guarantee that the Carrier
meaning, which might otherwise require more
accepts liability throughout transit and it may
than one word, thereby making the clauses
well be a “Through” or “Transhipment” Bill in
shorter and easier to read.
disguise.
Definitions warrant careful study because, apart
P&O Nedlloyd has done its best to produce its
from the effect outlined above, they determine,
contract of carriage in plain English and any
by reference to the manner in which the details
comparison with the terms and conditions of a
on the face are completed, when the movement is
conventional Bill of Lading will quickly illustrate
Combined Transport (CT) and when it is Port-to-
this point. However, in a situation where,
Port (P-to-P).
because it is a contract of adhesion, any
ambiguity in the contract is construed against Clause 2: Carrier's Tariff
the Carrier, it is vital that there is only one Incorporates the terms of the Tariff to the extent
interpretation of any clause. This, unfortunately, that these are not inconsistent with the Bill of
means that clauses have to be drafted carefully Lading (B/L) terms and conditions, which remain
in an all embracing way, rather different from paramount. Whilst there are no hard and fast
normal speech, where the context of the use of rules as to what is put in a Bill of Lading or a
some words supplements the meaning. In a Tariff, by and large the Bill is the contract of
contract it is not possible to do this. We must be carriage that the Carrier needs to bring to the
precise and this requirement militates against attention of “holders in due course for value” in
using clauses as brief as we would like. order to enforce its terms against them and the
Tariff covers activities at either end of the
It is important that all readers appreciate that
carriage; receipt, delivery etc., which are only of
this is a guide, nothing more nor less, to the
interest to Consignors and Consignees, who can
P&O Nedlloyd Bill of Lading. It in no way forms
see the Tariff in the Carrier's offices.
part of or supplements any contract of carriage
or Tariff issued by P&O Nedlloyd, which must be
entirely free standing. This is a rough guide only

55
 Terms & Conditions of P&O Nedlloyd Bill of Lading
TERMS AND CONDITIONS carriage by sea shall be deemed to include references to all waterborne
Carriage and the Hague Rules shall be construed accordingly.
undertaken) incurred or suffered in respect of the Goods, and shall
indemnify the Carrier in respect thereof.
(3) If the Merchant fails to take delivery of the Goods within thirty days
of delivery becoming due under Clause 20 (2), or if in the opinion of the
(Enlarged print available from the Carrier or his agents.)
(3) If the Place of Receipt or Place of Delivery is not named on the face (5) If Containers supplied by or on behalf of the Carrier are unpacked at Carrier they are likely to deteriorate, decay, become worthless or incur
1. DEFINITIONS hereof the Merchant’s premises, the Merchant is responsible for returning the charges whether for storage or otherwise in excess of their value, the
In this Bill of Lading the word:– Subject to Clauses 5 and 25, empty Containers free from labels etc, with interiors brushed clean, Carrier may, without prejudice to any other rights which he may have
“Carrier” means the party named in the Signature box on the face hereof. (a) if the Place of Receipt is not named on the face hereof, the Carrier odour free and in every respect fit for immediate reuse, to the point or against the Merchant, without notice and without any responsibility
“Merchant” includes any Person who at any time has been or becomes shall be under no liability whatsoever for loss, damage or delay to the place designated by the Carrier, his servants or agents, within the time whatsoever attaching to him, sell, destroy or dispose of the Goods and
the Shipper, Holder, Consignee, Receiver of the Goods, any Person who Goods, howsoever occurring, if such loss, damage or delay arises prior prescribed. Should a Container not be returned as required above within apply any proceeds of sale in reduction of the sums due to the Carrier
owns or is entitled to the possession of the Goods or of this Bill of to loading onto a Vessel. the time prescribed, the Carrier is entitled to take such steps as he from the Merchant.
Lading and any Person acting on behalf of any such Person. (b) if the Place of Delivery is not named on the face hereof, the Carrier considers appropriate for the account of the Merchant and the Merchant (4) Refusal by the Merchant to take delivery of the Goods in accordance
“Holder” means any Person for the time being in possession of (or shall be under no liability whatsoever for loss, damage or delay to the shall be liable for any detention, loss or expense incurred as a result with the terms of this Clause and/or to mitigate any loss or damage
entitled to the possession of) this Bill of Lading. Goods, howsoever occurring, if such loss, damage or delay arises thereof. thereto shall constitute a waiver by the Merchant to the Carrier of any
“Person” includes an individual, group, company or other entity. subsequent to discharge from a Vessel. (6) Containers released into the care of the Merchant for packing, claim whatsoever relating to the Goods or the Carriage thereof.
“Sub-Contractor” includes (but is not limited to) owners and operators (4) Notice of Claim unpacking or any other purpose whatsoever are at the sole risk of the (5) In the event of the Carrier agreeing to a request of the Merchant to
of any Vessels (other than the Carrier), stevedores, terminal and Unless Clause 25 applies, the Carrier shall be deemed prima facie to Merchant until redelivered to the Carrier. The Merchant shall indemnify amend the Place of Delivery stated herein without stipulating any
groupage operators, road, rail and air transport operators and any have effected timely delivery of the Goods as described in this Bill of the Carrier for all loss and/or damage to such Containers occurring
Lading unless notice of loss, damage or delay to the Goods, indicating during such period. The Merchant shall also indemnify the Carrier for particular terms and conditions to apply during said amended Carriage,
independent contractor employed by the Carrier in performance of the to the extent provided by the applicable Tariff the terms and conditions
Carriage and any sub-sub-contractors thereof. the general nature of such loss, damage or delay, shall have been given any loss, damage, injury, fines or expenses caused or incurred by such
in writing to the Carrier or to his representative at the Place of Delivery Containers whilst in his control. of this Bill of Lading shall continue to apply, but only until the Goods
“indemnify” includes defend, indemnify and hold harmless whether or are delivered by the Carrier to the Merchant at the amended Place of
not the obligation to indemnify arises out of negligent or non-negligent (or the Port of Discharge if no Place of Delivery is named on the face
hereof) before or at the time of removal of the Goods into the custody of 13. FREIGHT Delivery. Once the applicable Tariff ceases to provide for the continued
acts or omissions of the Carrier, his servants, agents or Sub-Contractors. application of the terms and conditions of the Bill of Lading or, if the
“Goods” means the whole or any part of the cargo received from the the Person entitled to delivery thereof under this Bill of Lading, or, if the (1) Freight shall be deemed fully earned on receipt of the Goods by the
loss or damage is not apparent, within three working days thereafter. Carrier and shall be paid and non-returnable in any event. Carrier declines to extend the Bill of Lading terms to the amended Place
Shipper and includes the packing and any equipment or Container not of Delivery, then the Carrier shall act as agent only of the Merchant in
supplied by or on behalf of the Carrier. (5) Time-bar (2) The Merchant’s attention is drawn to the stipulations concerning
Unless Clause 25 applies, the Carrier shall be discharged of all liability currency in which the Freight is to be paid, rate of exchange, devaluation arranging for delivery of the Goods to the amended Place of Delivery but
“Container” includes any container, trailer, transportable tank, flat or and other contingencies relative to Freight in the applicable Tariff. shall then be under no liability whatsoever for loss, damage or delay
pallet, or any similar article used to consolidate goods and any ancillary whatsoever in respect of the Goods, unless suit is brought and notice
thereof given to the Carrier within nine months after delivery of the (3) Freight has been calculated on the basis of particulars furnished by to the Goods, howsoever arising, for the period of amended Carriage.
equipment. or on behalf of the Shipper. If the particulars furnished by or on behalf If the Carrier agrees to make multiple point deliveries of an FCL
“Carriage” means the whole or any part of the operations and services Goods or, if the Goods are not delivered, ten months after the date of
issue of this Bill of Lading. of the Shipper are incorrect, it is agreed that a sum equal to double the Container, this contract terminates upon presentation of the sealed
undertaken by the Carrier in respect of the Goods covered by this Bill of correct Freight less the Freight charged shall be payable as liquidated Container at the first place of delivery. Thereafter the Carrier acts as
Lading. 7. SUNDRY LIABILITY PROVISIONS damages to the Carrier. agent only to arrange any further deliveries.
“Port of Loading” means any port at which the Goods are loaded on (1) Basis of Compensation (4) All Freight shall be paid without any set-off, counter-claim,
board any Vessel (which may not necessarily be the Vessel named (6) If, at the place where the Carrier is entitled to call upon the
Unless Clause 25 applies, compensation shall be calculated by reference deduction or stay of execution before delivery of the Goods. Merchant to take delivery of the Goods under Clause 20 (2) the Carrier
overleaf) for Carriage under this Bill of Lading. to the value of the Goods at the place and time they are delivered to the
“Port of Discharge” means any port at which the Goods are discharged 14. LIEN is obliged to hand over the Goods into the custody of any Customs, port
Merchant, or at the place and time they should have been delivered. For or other authority, such hand-over shall constitute due delivery to the
from any Vessel (which may not necessarily be the Vessel named the purpose of determining the extent of the Carrier’s liability for loss, The Carrier shall have a lien on the Goods and any documents relating
overleaf) after Carriage under this Bill of Lading. Merchant under this Bill of Lading.
damage or delay to the Goods, the sound value of the Goods is agreed to thereto for all sums payable to the Carrier under this contract. The (7) This Bill of Lading shall not be a negotiable document of title unless
“Vessel” means any waterborne craft used in the Carriage under this Bill be the FOB/FCA invoice value plus freight and insurance if paid. Carrier shall also have a lien against the Merchant on the Goods and any
of Lading which may be a feeder vessel or an ocean vessel. consigned “to order”, “to the order of....”, or “to bearer”. If not so
(2) Hague Rules Limitation documents relating thereto for all sums due from him to the Carrier consigned but instead consigned directly to a nominated party, this shall
“Combined Transport” arises if the Place of Receipt and/or the Place of If the Hague Rules are applicable by national law, the liability of the under any other contract. The Carrier may exercise his lien at any time
Delivery are indicated on the face hereof in the relevant spaces. be a “Straight” Bill and, at the sole discretion of the Carrier, delivery
Carrier shall in no event exceed the limit provided in the applicable and at any place at his sole discretion, whether the contractual Carriage may be made to the nominated party only upon proof of identity, as if
“Port to Port” arises if the Carriage is not Combined Transport. national law. If the Hague Rules are applicable otherwise than by is completed or not. In any event, any lien shall extend to cover the cost
“Shipped on Board” relates only to the Container into which the Goods this Bill of Lading were a Waybill. Such delivery shall constitute due
national law, in determining the liability of the Carrier the liability shall of recovering the sums due, and for that purpose the Carrier shall have delivery hereunder.
are manifested. in no event exceed £100 sterling per package or unit. the right to sell the Goods by public auction or private treaty, without
“Freight” includes all charges payable to the Carrier in accordance with (3) Ad Valorem notice to the Merchant, at any place at the sole discretion of the Carrier. 21. FCL MULTIPLE BILLS OF LADING
the applicable Tariff and this Bill of Lading. The Merchant agrees and acknowledges that the Carrier has no
“Hague Rules” means the provisions of the International Convention for 15. OPTIONAL STOWAGE AND DECK CARGO (1) Goods will only be delivered in a Container to the Merchant if all
knowledge of the value of the Goods, and that higher compensation than Bills of Lading in respect of the contents of the Container have been
the Unification of Certain Rules relating to Bills of Lading signed at that provided for in this Bill of Lading may not be claimed unless, with (1) The Goods may be packed by the Carrier in Containers and
Brussels on 25th August, 1924 and includes the amendments by the the consent of the Carrier, the value of the Goods declared by the Shipper consolidated with other goods in Containers. surrendered authorising delivery to a single Merchant at a single Place
Protocol signed at Brussels on 23rd February, 1968, but only if such prior to the commencement of the Carriage is stated in this Bill of (2) Goods, whether or not packed in Containers, may be carried on deck of Delivery. In the event that this requirement is not fulfilled the Carrier
amendments are compulsorily applicable to this Bill of Lading. (It is Lading and extra Freight paid, if required. In that case, the amount of the or under deck, at the sole discretion of the Carrier, without notice to the may unpack the Container and, in respect of Goods for which Bills of
expressly provided that nothing in this Bill of Lading shall be construed declared value shall be substituted for the limits laid down in this Bill of Merchant. All such Goods whether carried on deck or under deck, shall Lading have been surrendered, deliver them to the Merchant on an LCL
as contractually applying said Rules as amended by said Protocol). Lading. Any partial loss or damage shall be adjusted pro rata on the basis participate in general average and shall be deemed to be within the basis. Such delivery shall constitute due delivery hereunder, but will only
of such declared value. definition of goods for the purposes of the Hague Rules and shall be be effected against payment by the Merchant of LCL Service Charges
2. CARRIER’S TARIFF and any charges appropriate to LCL Goods (as laid down in the Tariff)
(4) Delay carried subject to those Rules.
The terms and conditions of the Carrier’s applicable Tariff are (a) Unless Clause 25 applies, the Carrier does not undertake that the (3) Notwithstanding Clause 15 (2), in the case of Goods which are together with the actual costs incurred for any additional services
incorporated herein. Particular attention is drawn to the terms and Goods shall arrive at the Port of Discharge or Place of Delivery at any stated on the face hereof as being carried on deck and which are so rendered.
conditions therein relating to container and vehicle demurrage. Copies of particular time or to meet any particular market or use, and the Carrier carried the Hague Rules shall not apply and the Carrier shall be under no (2) If this is an FCL multiple Bill of Lading (as evidenced by the
the relevant provisions of the applicable Tariff are obtainable from the shall in no circumstances whatsoever and howsoever arising be liable for liability whatsoever for loss, damage or delay, howsoever arising, qualification of the tally acknowledged overleaf to the effect that it is
Carrier or his agents upon request. In the case of inconsistency between direct, indirect or consequential loss or damage caused by delay. whether or not caused by negligence on the part of the Carrier, his “One of ...... part cargoes in the Container”), then the Goods detailed
this Bill of Lading and the applicable Tariff, this Bill of Lading shall (b) However, if Clause 25 applies, unless a latest date of delivery is servants, agents, or Sub-Contractors. overleaf are said to comprise part of the contents of the Container
prevail. shown on the face hereof and any required premium paid, timely indicated. If the Carrier is required to deliver the Goods to more than one
delivery shall be considered to have been made if the Goods are made 16. LIVE ANIMALS Merchant and if all or part of the total Goods within the Container
3. WARRANTY
available to the Merchant at the Port of Discharge or Place of Delivery, The Hague Rules shall not apply to the Carriage of live animals, which consists of bulk Goods or unappropriated Goods, or is or becomes mixed
The Merchant warrants that in agreeing to the terms and conditions as the case may be, within 60 days after the date published in the P&O are carried at the sole risk of the Merchant. The Carrier shall be under no
hereof he is, or has the authority of the Person owning or entitled to the or unmarked or unidentifiable, the Holders of Bills of Lading relating to
Nedlloyd Inbound Schedule against the Port of Discharge nominated liability whatsoever for any injury, illness, death, delay or destruction to Goods within the Container shall take delivery thereof (including any
possession of the Goods and this Bill of Lading. therein for the relevant ocean Vessel. The Carrier shall be entitled to all such live animals howsoever arising. Should the Master in his sole damaged portion) and bear any shortage in such proportions as the
4. SUB-CONTRACTING AND INDEMNITY the defences, exceptions and limitations provided in the applicable discretion consider that any live animal is likely to be injurious to any Carrier shall in his absolute discretion determine. Such delivery shall
international convention or national law and this Bill of Lading. other live animal or any person or property on board, or to cause the constitute due delivery hereunder.
(1) The Carrier shall be entitled to sub-contract the Carriage on any Vessel to be delayed or impeded in the prosecution of its voyage, such
terms whatsoever. (5) Scope of Application
(a) The terms and conditions of this Bill of Lading shall at all times live animal may be destroyed and thrown overboard without any liability 22. GENERAL AVERAGE & SALVAGE
(2) The Merchant undertakes that no claim or allegation shall be made attaching to the Carrier. The Merchant shall indemnify the Carrier
against any Person whomsoever by whom the Carriage govern all responsibilities of the Carrier in connection with or arising out (1) In the event of accident, danger, damage or disaster before or after
of the supply of a Container to the Merchant, not only during the against all or any extra costs incurred for any reason whatsoever in the commencement of the voyage, resulting from any cause whatsoever,
is performed or undertaken (including all Sub-Contractors of the connection with the Carriage of any live animal.
Carrier), other than the Carrier, which imposes or attempts to impose Carriage, but also during the periods prior to and/or subsequent to the due to negligence or not, for which, or for the consequences of which,
upon any such Person, or any vessel owned by any such Person, any Carriage. 17. METHODS AND ROUTES OF CARRIAGE the Carrier is not responsible, by statute, contract or otherwise, the
liability whatsoever in connection with the Goods or the Carriage of the (b) The rights, defences, limitations and liberties of whatsoever nature Merchant shall contribute with the Carrier in general average to the
provided for in this Bill of Lading shall apply in any action against the (1) The Carrier may at any time and without notice to the Merchant:
Goods, whether or not arising out of negligence on the part of such (a) use any means of carriage whatsoever, payment of any sacrifices, losses or expenses of a general average nature
Person and, if any such claim or allegation should nevertheless be made, Carrier for loss, damage or delay, howsoever occurring and whether the that may be made or incurred, and shall pay salvage and special charges
action be founded in contract or in tort and even if the loss, damage or (b) transfer the Goods from one conveyance to another, including but
the Merchant will indemnify the Carrier against all consequences not limited to transhipping or carrying them on a Vessel other than that incurred in respect of the Goods.
delay arose as a result of unseaworthiness, negligence or breach of a (2) Any general average on a Vessel operated by the Carrier shall be
thereof. Without prejudice to the foregoing every such Person or vessel fundamental term of this contract. named on the face hereof,
shall have the benefit of every right, defence, limitation and liberty of (c) Save as is otherwise provided for in this Bill of Lading, the Carrier (c) unpack and remove the Goods which have been packed into a adjusted according to the York/Antwerp Rules of 1994 or any subsequent
whatsoever nature herein contained or otherwise available to the Carrier shall in no circumstances whatsoever and howsoever arising be liable for Container and forward them in a Container or otherwise, amendment thereto authorised by the CMI at any port or place and in any
(including, but not limited to Clause 24 hereof) as if such provisions direct or indirect or consequential loss or damage or loss of profits. (d) proceed by any route in his discretion (whether or not the nearest or currency at the option of and by an adjuster appointed by the Carrier,
were expressly for his benefit and, in entering into this contract, the (6) Inspection by Authorities most direct or customary or advertised route), at any speed, and proceed with the test of reasonableness in the Rule Paramount being made on the
Carrier, to the extent of these provisions, does so not only on his own If by order of the authorities at any place, a Container has to be opened to or stay at any place or port whatsoever, once or more often and in any basis of what was known at the time of the general average act and not
behalf but also as agent and trustee for such Persons or vessel. for the Goods to be inspected, the Carrier will not be liable for any loss, order, subsequently with the benefit of hindsight. Any general average on a
(3) The provisions of Clause 4 (2), including but not limited to the damage or delay incurred as a result of any opening, unpacking (e) load or unload the Goods at any place or port (whether or not such Vessel not operated by the Carrier (whether a seagoing or inland
undertakings of the Merchant contained therein, shall extend to claims inspection or repacking. The Carrier shall be entitled to recover the cost port is named overleaf as the Port of Loading or Port of Discharge) and waterways Vessel) shall be adjusted according to the requirements of the
or allegations of whatsoever nature against other Persons chartering of such opening, unpacking, inspection and repacking from the store the Goods at any such place or port, operator of that vessel. In either case the Merchant shall give such cash
space on the carrying Vessel. Merchant. (f) comply with any orders or recommendations given by any deposit or other security as the Carrier may deem sufficient to cover the
(4) The Merchant further undertakes that no claim or allegation in government or authority, or any Person acting or purporting to act as or estimated general average contribution of the Goods. Any security, other
respect of the Goods shall be made against the Carrier by any Person 8. SHIPPER-PACKED CONTAINERS on behalf of such government or authority, or having under the terms of than cash deposits, must be given by a party acceptable to and with
other than in accordance with the terms and conditions of this Bill of If a Container has not been packed by or on behalf of the Carrier: any insurance on any conveyance employed by the Carrier the right to assets in a jurisdiction nominated by the Carrier. Such security must be
Lading which imposes or attempts to impose upon the Carrier any (1) The Carrier shall not be liable for loss, damage or delay to the Goods give orders or directions, provided before delivery if the Carrier so requires, or, if the Carrier does
liability whatsoever in connection with the Goods or the Carriage of the caused by matters beyond his control, including, inter alia, without (g) permit the vessel to proceed with or without pilots, to tow or be not so require, within three months of the delivery of the Goods, whether
Goods, whether or not arising out of negligence on the part of the Carrier prejudice to the generality of this exclusion: towed, or to be dry-docked, with or without Goods and/or Containers on or not at the time of delivery the Merchant had notice of the Carrier’s
and, if any such claim or allegation should nevertheless be made, to (a) the manner in which the Container has been packed, or board. lien. The Carrier shall be under no obligation to exercise any lien for
indemnify the Carrier against all consequences thereof. (b) the unsuitability of the Goods for Carriage in the Container supplied, (2) The liberties set out in Clause 17 (1) may be invoked by the Carrier general average contribution due to the Merchant.
5. CARRIER’S RESPONSIBILITY or for any purpose whatsoever, whether or not connected with the Carriage (3) Conversion into the currency of the adjustment shall be calculated at
PORT-TO-PORT SHIPMENT (c) the unsuitability or defective condition of the Container or the of the Goods, including but not limited to loading or unloading other the rate prevailing on the date of payment for disbursements and on the
incorrect setting of any temperature controls thereof, provided that, if the goods, bunkering, undergoing repairs, adjusting instruments, picking up date of completion of discharge of the Vessel for allowances,
If Carriage is Port-to-Port, the liability (if any) of the Carrier for loss, Container has been supplied by or on behalf of the Carrier, this or landing any persons, including but not limited to persons involved
damage or delay to the Goods occurring from and during loading onto contributory values, etc.
unsuitability, defective condition or incorrect setting could have been with the operation or maintenance of the Vessel and assisting vessels in (4) If a salving vessel is owned or operated by the Carrier, salvage shall
any Vessel up to and during discharge from that Vessel or from another apparent upon inspection by the Merchant at or prior to the time when all situations. Anything done in accordance with Clause 17 (1) or any
vessel into which the Goods have been transhipped shall be determined be paid for as fully as if the salving vessel or vessels belonged to
the Container was packed, or delay arising therefrom shall be deemed to be within the contractual strangers.
in accordance with any national law making the Hague Rules (d) packing temperature controlled Goods that are not at the correct Carriage and shall not be a deviation.
compulsorily applicable to this Bill of Lading, or in any other case in (3) By tendering Goods for Carriage without any written request for (5) In the event of the Master in his sole discretion or in consultation
temperature for Carriage. with owners considering that salvage services are needed, the Merchant
accordance with the Hague Rules, Articles 1-8 inclusive only. (2) The Shipper is responsible for the packing and sealing of all Carriage in a specialised Container, or for Carriage otherwise than in a
Unless Clause 25 applies, the Carrier shall be under no liability Container, the Merchant accepts that Carriage may properly be agrees that the Master may act as his agent to procure such services to
Shipper-Packed Containers and, if a Shipper-Packed Container is Goods and that the Carrier may act as his agent to settle salvage
whatsoever for loss, damage or delay to the Goods, howsoever delivered by the Carrier with its original seal as affixed by the Shipper undertaken in a general purpose container, carried on or under deck at
occurring, if such loss, damage or delay arises prior to loading onto or intact, the Carrier shall not be liable for any shortages of Goods the Carrier’s sole discretion. remuneration, without any prior consultation with the Merchant in both
subsequent to discharge from a Vessel. Notwithstanding the above, in ascertained at delivery. If, nevertheless, a claim for shortage is made cases.
case and to the extent that any applicable law provides for any against the Carrier by any Person whomsoever, the Merchant agrees to
18. MATTERS AFFECTING PERFORMANCE (6) If the Merchant contests payment of contribution to general average,
additional period of responsibility, the Carrier shall have the benefit of indemnify the Carrier against the cost of any such claim, plus any costs If at any time the Carriage, the Vessel or other goods on board the Vessel salvage, salvage charges and/or special charges to Goods on any grounds
every right, defence, limitation and liberty in the Hague Rules as incurred in respect thereof. are or are likely to be affected by any hindrance, risk, delay, difficulty or whatsoever or fails to make payment of contribution within three months
applied by this clause during that period, notwithstanding that the loss, (3) The Merchant shall indemnify the Carrier against any loss, damage, disadvantage of any kind (other than the inability of the Goods, due to of the issue of the adjustment thereof, whether or not prior security has
damage or delay did not occur at sea. liability or expense whatsoever and howsoever arising caused by one or their condition, safely or properly to be carried or carried further) and been provided, the Merchant shall pay interest for the period in excess of
In the event of the Goods being discharged at a port other than the Port more of the matters referred to in Clause 8 (1), save that, if the loss, howsoever arising (even though the circumstances giving rise to such three months on the contribution due at two percent per annum above the
of Discharge nominated in this Bill of Lading and forwarded to the damage, liability or expense was caused by a matter referred to in Clause hindrance, risk, delay, difficulty or disadvantage existed at the time this base lending rate of the central bank of the country in whose currency
nominated Port of Discharge by whatever means, the Hague Rules as 8 (1) (c), the Merchant shall not be liable to indemnify the Carrier in contract was entered into or the Goods were received for Carriage), the the adjustment is issued, in addition to the contribution due.
referred to in paragraph 1 of this clause shall continue to apply until respect thereof, unless the proviso referred to in that Clause applies. Carrier (whether or not the Carriage is commenced) may, without prior (7) In the event of any general average credit balances due to Merchants
delivery at the nominated Port of Discharge (or elsewhere), notice to the Merchant and at the sole discretion of the Carrier, either:- still being unclaimed 5 years after the date of issue of the adjustment,
notwithstanding that Carriage may not be by sea. 9. INSPECTION OF GOODS (a) Carry the Goods to the contracted Port of Discharge or Place of these shall be paid to the Carrier, who will hold such credit balances
6. CARRIER’S RESPONSIBILITY The Carrier or any Person to whom the Carrier has sub-contracted the Delivery, whichever is applicable, by an alternative route to that pending application by the Merchants entitled thereto.
COMBINED TRANSPORT Carriage or any Person authorised by the Carrier shall be entitled, but indicated in this Bill of Lading or that which is usual for Goods
under no obligation, to open any Container or package at any time and consigned to that Port of Discharge or Place of Delivery. If the Carrier 23. VARIATION OF THE CONTRACT
If Carriage is Combined Transport, the Carrier undertakes to perform to inspect, weigh and/or measure the Goods and/or weigh the Container. elects to invoke the terms of this Clause 18 (a) then, notwithstanding the No servant or agent of the Carrier shall have the power to waive or vary
and/or in his own name to procure performance of the Carriage from the provisions of Clause 17 hereof, he shall be entitled to charge such any of the terms of this Bill of Lading, unless such waiver or variation is
Place of Receipt or the Port of Loading whichever is applicable, to the 10. CARRIAGE AFFECTED BY CONDITION OF GOODS additional Freight as the Carrier may determine. in writing and is specifically authorised or ratified in writing by the
Port of Discharge or the Place of Delivery, whichever is applicable, and, If it appears at any time that, due to their condition, the Goods cannot or Carrier.
save as is otherwise provided for in this Bill of Lading, the Carrier shall safely or properly be carried or carried further, either at all or without (b) Suspend the Carriage of the Goods and store them ashore or afloat
be liable for loss, damage or delay occurring during the Carriage only to incurring any additional expense or taking any measure in relation to the upon the terms of this Bill of Lading and endeavour to forward them as 24. LAW AND JURISDICTION
the extent set out below. Container or the Goods, the Carrier may, without notice to the Merchant soon as possible, but the Carrier makes no representations as to the (1) Unless Clause 25 or 27 applies, any claim against the Carrier under
(1) If the stage of the Carriage during which loss or damage or delay (but as his agent only), take any measure and/or incur any additional maximum period of such suspension of Carriage. If the Carrier elects to
occurred is not known this Bill of Lading shall be determined only according to English law
expense to carry or to continue the Carriage thereof, and/or sell or invoke the terms of this Clause 18 (b) then notwithstanding the and exclusively in the High Court of Justice in London. The Merchant
(a) Exclusions dispose of the Goods, and/or abandon the Carriage and/or store them provisions of Clause 17 hereof, he shall be entitled to charge such
If the stage of the Carriage during which the loss, damage or delay irrevocably submits to this jurisdiction.
ashore or afloat, under cover or in the open, at any place, whichever the additional Freight as the Carrier may determine. (2) The Carrier shall be entitled to pursue any claim against the
occurred is not known, the Carrier shall be relieved of liability for any Carrier, in his absolute discretion, considers most appropriate, which or
loss, damage or delay if such loss, damage or delay was caused by: Merchant in London according to English Law or in any jurisdiction in
abandonment, storage, sale or disposal shall be deemed to constitute due (c) Abandon the Carriage of the Goods and place them at the which the Merchant has assets but then in accordance with the local law
(i) an act or omission of the Merchant, delivery under this Bill of Lading. The Merchant shall indemnify the Merchant’s disposal at any place or port which the Carrier may deem
(ii) insufficiency of or defective condition of packing or marking, of that jurisdiction.
Carrier against any additional expense incurred. safe and convenient, whereupon the responsibility of the Carrier in (3) Nothing herein shall prevent the parties to any claim or dispute
(iii) handling, loading, stowage or unloading of the Goods by or on respect of such Goods shall cease. The Carrier shall nevertheless be
behalf of the Merchant (see Clause 8), 11. DESCRIPTION OF GOODS entitled to full Freight on the Goods received for Carriage, and the under this Bill of Lading from agreeing to submit the claim or dispute to
(iv) inherent vice of the Goods, (1) This Bill of Lading shall be prima facie evidence of the receipt by Merchant shall pay any additional costs of the Carriage to, and delivery arbitration by mutually acceptable arbitrator(s) on mutually acceptable
(v) strike, lock-out, stoppage or restraint of labour, from whatever the Carrier from the Shipper in apparent good order and condition, and storage at, such place or port. terms at a mutually acceptable venue.
cause, whether partial or general, except as otherwise noted, of the total number of Containers or other If the Carrier elects to use an alternative route under Clause 18 (a) or to 25. VALIDITY
(vi) a nuclear incident, packages or units indicated in the box on the face hereof entitled “*Total suspend the Carriage under Clause 18 (b) this shall not prejudice his
(vii) any cause or event which the Carrier could not avoid and the No. of Containers/Packages received by the Carrier”. right subsequently to abandon the Carriage. In the event that anything herein contained is inconsistent with any
consequences whereof he could not prevent by the exercise of reasonable (2) Except as provided in Clause 11 (1), no representation is made by applicable international convention or national law which cannot be
diligence, the Carrier as to the weight, contents, measure, quantity, quality, 19. DANGEROUS GOODS departed from by private contract, the provisions hereof shall to the
(viii) any act or omission of the Carrier, the consequences of which he description, condition, marks, numbers or value of the Goods, and the (1) No Goods which are or may become dangerous, inflammable, extent of such inconsistency but no further be null and void.
could not reasonably have foreseen, Carrier shall be under no responsibility whatsoever in respect of such damaging or injurious (including radio-active materials), or which are or
(ix) compliance with instructions of any Person entitled to give them. 26. LIMITATION OF LIABILITY
description or particulars, which are unknown to him. may become liable to damage any property whatsoever or injure any
(b) Burden of Proof It is agreed that, whilst he retains the right so to do at his sole discretion, person whomsoever, shall be tendered to the Carrier for Carriage without For the avoidance of doubt it is hereby agreed by the Merchant that the
The burden of proof that the loss, damage or delay was due to one or the Carrier is not at any time under any obligation to weigh any his express consent in writing, and without the Container as well as the Carrier qualifies and shall be regarded as a person entitled to limit
more of the causes or events specified in this Clause 6 (1) shall rest upon Container or open any Container to make any check on the Goods Goods themselves being distinctly marked on the outside so as to liability under the relevant Convention on the Limitation of Liability for
the Carrier, save that if the Carrier establishes that, in the circumstances therein or their stowage (see Clause 9). indicate the nature and character of any such Goods and so as to comply Maritime Claims, notwithstanding that the Carrier may have procured
of the case, the loss, damage or delay could be attributed to one or more (3) If any particulars of any Letter of Credit and/or Import Licence with any applicable laws, regulations or requirements. If any such Goods space on board the Vessel concerned by means of a Slot Charterparty,
of the causes or events specified in Clause 6 (1) (a) (ii), (iii) or (iv), it and/or Sale Contract and/or Invoice or Order number and/or details of are delivered to the Carrier without such written consent and/or marking, Bill of Lading or some other contract of carriage. Except to the extent
shall be presumed that it was so caused. The Merchant shall, however, be any contract to which the Carrier is not a party are shown on the face of or if in the opinion of the Carrier the Goods are or are liable to become that mandatory law to the contrary applies in the appropriate jurisdiction
entitled to prove that the loss, damage or delay was not, in fact, caused this Bill of Lading, such particulars are included solely at the request of of a dangerous, inflammable, damaging or injurious nature, they may at (in which case said law shall apply), the size of the fund to which the
either wholly or partly by one or more of these causes or events. the Merchant for his convenience. The Merchant agrees that the any time be destroyed, disposed of, abandoned, or rendered harmless Carrier may limit liability shall be identical to that proportion of the
(c) Limitation of Liability inclusion of such particulars shall not be regarded as a declaration of without compensation to the Merchant and without prejudice to the limitation fund by which the actual carrier is entitled to limit which is (or
Except as provided in Clauses 7 (2), 7 (3), and 27, if Clause 6 (1) value and in no way increases the Carrier’s liability under this Bill of Carrier’s right to Freight. would be) available for the Carrier’s claims against the actual carrier.
operates total compensation for loss or damage shall in no circumstances Lading. The Merchant further agrees to indemnify the Carrier against all (2) The Merchant undertakes that such Goods are packed in a manner
whatsoever and howsoever arising exceed 2 SDRs per kilo of the gross consequences of including such particulars in this Bill of Lading. adequate to withstand the risks of Carriage having regard to their nature 27. USA CLAUSE PARAMOUNT (if applicable)
weight of the Goods lost or damaged. (SDR means Special Drawing The Merchant acknowledges that, except when the provisions of Clause and in compliance with all laws or regulations which may be applicable (1) If Carriage includes carriage to, from or through a port in the United
Right as defined by the International Monetary Fund). Limitation of 7(3) apply, the value of the Goods is unknown to the Carrier. during the Carriage. In particular but without prejudice to the generality States of America, this Bill of Lading shall be subject to the United
liability for delay shall be as provided in the applicable international of this Clause 19 (2), if the Goods are not packed into the Container by States Carriage of Goods by Sea Act 1936 (US COGSA), the terms of
convention or national law, in the absence of which the Carrier accepts 12. SHIPPER’S/MERCHANT’S RESPONSIBILITY or on behalf of the Carrier, the Merchant undertakes that incompatible which are incorporated herein and shall be paramount throughout
no liability whatsoever for delay, howsoever caused (see Clause 7 (4)). (1) All of the Persons coming within the definition of Merchant in Goods are not packed in the same Container. Carriage by sea and the entire time that the Goods are in the actual
(2) If the stage of the Carriage during which the loss or damage or Clause 1 shall be jointly and severally liable to the Carrier for the due (3) Whether or not the Merchant was aware of the nature of the Goods, custody of the Carrier or his Sub-Contractor at the sea terminal in the
delay occurred is known fulfilment of all obligations undertaken by the Merchant in this Bill of the Merchant shall indemnify the Carrier against all claims, losses, United States of America before loading onto the vessel or after
Notwithstanding anything provided for in Clause 6 (1) and subject to Lading and remain so liable throughout Carriage, notwithstanding their damages or expenses arising in consequence of the Carriage of such discharge therefrom, as the case may be.
Clauses 15 and 16, if it is known during which stage having transferred this Bill of Lading and/or title to the Goods to another Goods. (2) The Carrier shall not be liable in any capacity whatsoever for loss,
of the Carriage the loss, damage or delay occurred, the liability of the party. (4) Nothing contained in this Clause shall deprive the Carrier of any of
Carrier in respect of such loss, damage or delay shall be determined: damage or delay to the Goods while the Goods are in the United States
(2) The Shipper warrants to the Carrier that the particulars relating to his rights provided for elsewhere. of America away from the sea terminal and are not in the actual custody
(a) by the provisions contained in any international convention or the Goods as set out overleaf have been checked by the Shipper on
national law which provisions:- receipt of this Bill of Lading and that such particulars, and any other 20. NOTIFICATION AND DELIVERY of the Carrier. At these times the Carrier acts as agent only to procure
(i) cannot be departed from by private contract to the detriment of the particulars furnished by or on behalf of the Shipper, are adequate and (1) Any mention herein of parties to be notified of the arrival of the Carriage by Persons (one or more) under the usual terms and conditions
Merchant, and correct. The Shipper also warrants that the Goods are lawful goods and Goods is solely for information of the Carrier, and failure to give such of those Persons. If, for any reason, the Carrier is denied the right to act
(ii) would have applied if the Merchant had made a separate and direct contain no contraband. If the Container is not supplied by or on behalf notification shall not involve the Carrier in any liability nor relieve the as agent only at these times, his liability for loss, damage or delay to the
contract with the Carrier in respect of the particular stage of the carriage of the Carrier, the Shipper further warrants that the Container meets all Merchant of any obligation hereunder. goods shall be determined in accordance with Clause 6 hereof.
during which the loss, damage or delay occurred and received as ISO and/or other international safety standards and is fit in all respects (2) The Merchant shall take delivery of the Goods within the time (3) If US COGSA applies the liability of the Carrier and/or the Vessel
evidence thereof any particular document which must be issued in order for Carriage by the Carrier. provided in the Carrier’s applicable Tariff (see Clause 2). If the Merchant shall not exceed US$ 500 per package or customary freight unit (in
to make such international convention or national law applicable, or (3) The Merchant shall indemnify the Carrier against all claims, losses, fails to do so the Carrier shall be entitled, without notice, to unpack the accordance with Section 1304(5) thereof), unless the value of the Goods
(b) if no international convention or national law would apply by virtue damages, fines and expenses arising or resulting from any breach of any Goods if packed in Containers and/or to store the Goods ashore, afloat, has been declared on the face hereof, in which case Clause 7(3) shall
of Clause 6 (2) (a), by the Hague Rules, Articles 1-8 inclusive only if the of the warranties in Clause 12(2) hereof or from any other cause in in the open or under cover, at the sole risk of the Merchant. Such storage apply.
loss, damage or delay is known to have occurred during waterborne connection with the Goods for which the Carrier is not responsible. shall constitute due delivery hereunder, and thereupon the liability of the (4) Notwithstanding the provisions of Clause 24, if Carriage includes
Carriage, or (4) The Merchant shall comply with all regulations or requirements of Carrier in respect of the Goods stored as aforesaid shall wholly cease, carriage to, from or through a port in the United States of America, the
(c) by the provisions of Clause 6 (1) if the provisions of Clause 6 (2) (a) Customs, port and other authorities, and shall bear and pay all duties, and the costs of such storage (if paid or payable by the Carrier or any Merchant may refer any claim or dispute to the United States District
and (b) above do not apply. taxes, fines, imposts, expenses or losses (including, without prejudice to agent or Sub-Contractor of the Carrier) shall forthwith upon demand be Court for the Southern District of New York in accordance with the laws
For the purposes of Clause 6 (2), references in the Hague Rules to the generality of the foregoing, Freight for any additional Carriage paid by the Merchant to the Carrier. of the United States of America.

BEAGLE HOUSE, BRAHAM STREET, LONDON E1 8EP 1/DRS B/L5 8/00

56
Clause 3: Warranty limitation. Such claims would be invalid in
A warranty by the Merchant that he has an English court but, in the absence of a
authority to give instructions to the Carrier in clause like this, might succeed elsewhere.
relation to the goods concerned. This covers the
varying situations where the Shipper shown on Clause 5: Carrier's Responsibility - Port-to-
the face of the B/L may be: Port Shipment
(a) A Freight Forwarder acting for an Provides the basis for the Carrier's liability if
undisclosed Principal; Carriage is P-to-P to be Hague Visby if this is
mandatorily applicable (e.g. shipments from UK,
(b) A Freight Forwarder acting for a disclosed Germany, Holland, France, Belgium and
Principal; Scandanavia etc.) and Hague Rules if it is not.
(Read in conjunction with definition of Hague
(c) A Principal contracting with the Carrier Rules in Clause 1 and details of Hague Visby
direct or through an undisclosed Agent; Rules in Part 2 Section 3A (ii)).

(d) A Merchant contracting with the Carrier in The liability period is restricted from ship's hook
respect of the carriage of goods which will be to ship's hook, unless local law extends Hague
supplied direct to the Carrier by a Supplier; Rules to cover any period prior to
or loading/subsequent to discharge (e.g. Australia).
Also, if the Carrier discharges a Port-to-Port
(e) A Merchant contracting with the Carrier on
shipment at another port and forwards it by any
his own behalf.
means, land or sea, the Hague Rules are applied
throughout up to delivery at the nominated port.
Clause 4: Sub-contracting and Indemnity
(This clause is the only one in the B/L restricted
(1) Gives the Carrier the right to sub-contract
to P-to-P carriage only and all others, except 6,
but does not bind the Merchant to the terms
are applicable to both CT and P-to-P.)
of that sub-contract.

Clause 6: Carrier's Responsibility -

(2) Is the Circular Indemnity under which the
Combined Transport
Merchant undertakes that only he will claim
(This clause covers all the CT only provisions
in respect of the subject goods and claim only
and all other B/L clauses, except 5, are
against the Carrier under B/L terms and
applicable to both CT and P-to-P).
conditions. He indemnifies the Carrier for
liabilities incurred under his sub-contracts
In the preamble the Carrier undertakes to act as
with his sub-contractors if this undertaking
Principal throughout to arrange the CT. This
is breached. (The CT extension of the
means that the Carrier is personally liable to the
“Himalaya” clause which effectively allows
Merchant, subject to the Bill of Lading terms
servants, agents and sub-contractors to enjoy
and conditions, at all times throughout Carriage,
the protection of the B/L contract and which
and is at no time in an agent only position,
has been ratified by decisions in English and
unless specifically provided elsewhere (e.g.
Australian courts.)
qualifying clause on face of Bill - see Part 1
Section 2C).
(3) Extends (2) to cover fellow co-charterers/
consortium partners whose goods are carried
(1) As goods are usually packed into containers
on the same vessel as the subject goods.
and not inspected at each interchange, it is
often not possible to ascertain where loss or
(4) Is an indemnity from the Merchant to the
damage occurred - hidden damage. This sub-
Carrier to prevent any claims being brought
clause covers such a situation:
against the Carrier outside the terms of the
B/L contract by a party to whom the
(a) Lists the exclusions to liability;
Merchant has sold all or part of the goods
(b) Provides for how the burden of proof lies;
but who is not a party to the B/L and who
and
tries to sue the Carrier in tort to avoid

57
 (c) Provides for a limitation of liability of 2 both sub-clauses are prefaced to exclude where a
SDRs per kilo for claims for loss or compulsory law makes a different provision so
damage. that, for example, if loss could be shown to have
(2) This sub-clause provides for if the place occurred at sea the notice period would be 3 days
where loss or damage occurred can be - not 3 working days - and the time limit 12
ascertained and applies: months - not 9 months - because these are the
limits provided in the Hague/Hague Visby Rules.
(a) Any applicable international convention (In the unlikely event that Hamburg Rules apply
or national law (if there is one) i.e. it would be 2 years.)
a European international road movement: CMR
a European international rail movement: CIM Clause 7: Sundry Liability Provisions
an international air movement: Warsaw (1) Provides the basis upon which the value of
(for details of CMR, CIM and Warsaw see goods is calculated for claims purposes.
Part 2 Section 3B and C).
(b) Hague or Hague Visby Rules at sea and (2) Provides the limit of liability, if the Hague
Hague Rules during other waterborne Rules are statutorially applied, is that
carriage; provided in the relevant statute and, if they
or are contractually applied (i.e. during inland
(c) Clause 6 (1) if (a) or (b) do not apply. waterborne carriage or with shipments from
nations that have not ratified the 1924
(3) Provides the flexibility to allow the B/L to be Hague Rules), is £100 Sterling per package
used with a mixture of CT and P-to-P or unit.
according to how it is compiled.
(Ports of Loading and Discharge completed at all (3) Provides the approach to liability where the
times). shipment is Ad Valorem and extra freight is
paid to have the value of the goods inserted
Boxes on the Face
in the Bill of Lading.
Place of: Receipt Delivery

(a) CT throughout Completed Completed (4) (a) Provides that, unless some mandatory
law to the contrary applies, the Carrier
(b) CT at loading but makes no representation as to the date
not after discharge Completed Blank of arrival of the goods and accepts no
liability for direct, indirect or
(c) No liability until
consequential loss or damage caused by
loaded onboard but
delay;
CT after discharge Blank Completed
(b) Contains the provisions relating to delay
(d) P-to-P only Blank Blank
where a mandatory law prescribing
liability for delay applies without
(4) Provides the period within which notice of
providing all of the parameters for such
claim must be given to the Carrier.
liability.
(5) Provides the period after which the claim
(5) (a) Provides for the Bill of Lading contract
becomes time-barred.
to cover the supply of the container as
Much confusion often arises over the provisions well as the carriage of goods;
relating to notice and time bar. Firstly it should
(b) Provides for the Bill of Lading contract
be noted that failure to give notice only creates a
terms to be applied to all claims,
presumption of delivery in good order which the
including tortious claims;
Merchant must rebut by producing evidence of
loss/ damage whilst in the Carrier's care. In
(c) Provides that the Carrier accepts no
other words the onus of proof changes. Note that
liability for direct, indirect or

58
 consequential loss except as provided in Clause 11: Description of Goods
the Bill of Lading contract. (1) Links up with the Incorporation Clause to
make it clear that the Carrier acknowledges
(6) Clarifies the liability of the Carrier if local only the tally at the foot of the Bill of Lading
authorities make mandatory inspections of marked “!Total No. of Containers/Packages
containers of goods, such as occurs in Saudi received by the Carrier” and not the detailed
Arabian ports. information in the main body, which is
information provided by the Shipper.
Clause 8: Shipper-Packed Containers
(1) Provides the basis of liability (to the extent (2) Provides that, except as provided in (1), the
not already provided elsewhere) for FCL Carrier makes no representation relating to
packed containers, for which, as they are any details of the goods but retains the
packed by the Merchant, the Carrier rights in Clause 9, without incurring any
obviously cannot accept liability for stowage obligation to do so.
etc. The clause also makes the Shipper
responsible for checking the setting of the (3) Provides that showing details of Letters of
controls for refrigerated containers and for Credit or other documents in the Bill of
ensuring that refrigerated goods are at the Lading does not affect the Carrier's liability
correct temperature when packed. and takes an indemnity from the Merchant
should any court anywhere decide otherwise.
(2) Provides that the Merchant is responsible for
(This clause is necessitated by the view of
packing and sealing an FCL container and, if
some Middle Eastern courts, where such
the Carrier delivers it with the original seal
detail is taken as an indication of
intact, he does not accept any liability for
acknowledgement of value, making for an Ad
loss, as clearly this cannot have occurred in
Valorem Bill of Lading).
his care.
Clause 12: Shipper's/Merchant's
(3) Provides an indemnity from the Merchant to
Responsibility
the Carrier for all claims caused by the
(1) Makes it clear that all parties to the
Shipper's packing of a container etc.
contract, who come within the definition of
Clause 9: Inspection of Goods Merchant, are jointly & severally liable to
Allows the Carrier, or someone who he has the Carrier for the Merchant's obligations in
authorised, to have the right to inspect the goods the contract. Just because he has been paid
and/or weigh the container. This is necessary to under the Sale Contract does not mean that
make checks on the carriage of hazardous goods, the Shipper can “wash his hands” of
stowage generally and correct freighting. liabilities incurred by the goods under the
Contract of Carriage.
Clause 10: Carriage Affected by Condition of
Goods (2) Shipper warrants details on face of Bill of
If the Carrier discovers something amiss, which Lading (which he has provided) are correct,
makes safe delivery at destination questionable, that the goods contain no contraband and
this gives him the necessary rights of “sue and that, if the container is the Merchant's own
labour” and other rights. That is to say, it gives one, it is ISO compliant.
him the right to act as the Merchant's agent and
take such steps as are necessary and incur such (3) Merchant indemnifies Carrier for
expenses as are necessary on behalf of the inaccuracies or inadequacies of such details
Merchant, in the Merchant's best interest, and or from any other claim caused by the goods
recover same from the Merchant as Particular for which the Carrier is not responsible.
Charges, which are then recoverable from the
(4) It is the Merchant's duty to comply with all
Merchant's cargo insurer.
regulations (such as Customs etc.) and any
fines or expenses incurred by the goods are
for his account.

59
(5) Containers delivered to Customers for FCL (2) Goods, whether or not packed in containers,
discharge must be returned to the Carrier in may be stowed on deck without clausing the
a clean condition. If Customer's own Bill of Lading, in which case normal Bill of
transport (COT) is used, Containers must be Lading liabilities apply.
redelivered to the Carrier at the place
designated by him. (3) If goods are stowed on deck and the Bill of
Lading is claused to that effect, the Carrier
(6) Provides for the Merchant to be liable for accepts no liability for them.
damage to the Carrier's containers whilst in
his care and for injury or damage caused by Clause 16: Live Animals
any accidents during this period. The Carrier accepts no liability for live animals,
retains necessary extensive rights over them, in
Clause 13: Freight case they prejudice the prosecution of the voyage,
(1) “Freight is earned on receipt of the goods and takes a full indemnity from the Merchant for
and is nonreturnable in any event”. This is to all extra costs incurred in respect of them.
avoid double insurance, as an Exporter
insuring CIF/CIP terms or an Importer Clause 17: Methods and Routes of Carriage
insuring FOB, CFR/FCA, CPT terms is (1) Provides the liberties which the Carrier
already insuring the freight. takes unto himself during Carriage.

(2) Attention is drawn to the Tariff, especially (2) Provides the occasions on which the liberties
matters relating to currency, rates of in (1) may be exercised.
exchange etc.
(3) Provides for the Merchant to approve
(3) Freight is calculated from details provided carriage in a General Purpose Container on
by the Shipper. If these are inaccurate a or under deck, unless he specifically requests
surcharge is payable. a “Special”. This is to ensure that those
Merchants who require temperature control
(4) Unpaid freight cannot be set off against or some other special stowage facility request
unpaid claims and must be paid before the for it and pay the appropriate surcharge.
goods can be delivered. (This is the position
which would apply even without a clause like Clause 18: Matters Affecting Performance
this in the Bill, which is incorporated for This clause provides to cover circumstances
clarification purposes only.) which make for frustration of the carriage.
(a) Provides for use of an alternative route to
Clause 14: Lien avoid any hindrance, against payment of
The Carrier has a lien on goods and documents extra freight by the Merchant.
for sums due from the Merchant and General
Average contributions and may sell the goods to (b) Provides for suspension of carriage and
recover same. Against the “world at large” this is subsequent oncarriage upon payment of
a specific lien for charges due on the subject extra freight as an alternative to (a) without
consignment. However, if the Carrier holds both prejudice to the right subsequently to
goods and documents (thereby precluding further abandonment.
negotiation), the lien becomes a general lien and
(c) Provides for the abandonment of the goods
the Carrier may exercise it to cover unpaid
short of destination if all else fails.
charges from the current Holder on other goods.

Clause 19: Dangerous Goods

Clause 15: Optional Stowage and Deck
(1) Dangerous, inflammable or damaging goods
Cargo
must not be shipped without the Carrier's
(1) Goods may be packed in containers and
prior agreement and without the goods being
consolidated with other goods.
properly marked. If these provisions are not
complied with, or if, in the Carrier's opinion,

60
 the goods constitute a hazard, he can dispose and effectively loses control of the goods
of them at his discretion, without thereafter. In such circumstances it is only
compensation. equitable that such delivery should
constitute constructive delivery to the
(2) Merchant undertakes that dangerous goods Merchant and for the contract of carriage to
will be properly packed. terminate.

(3) Merchant indemnifies the Carrier in respect (7) Covers delivery in respect of “Straight” Bills
of claims etc., arising from carriage of of Lading.
dangerous goods.
Clause 21: FCL Multiple Bills of Lading
(4) The terms of this clause do not affect the (1) If FCL Multiple Bills of Lading are issued,
Carrier's rights provided elsewhere. goods will only be delivered FCL if all Bills
of Lading are surrendered, otherwise the
Clause 20: Notification and Delivery
Carrier will unpack and effect piecemeal
(1) Although the Carrier may send out Arrival
delivery to individual Bill of Lading holders
Notification Forms, he is not obliged to do so
against payment of additional charges.
and the Merchant's responsibility to present
himself to take delivery, as per conventional (2) If an FCL packed FCL Multiple Bill of
shipping, remains unaltered. Lading container is unpacked for LCL
delivery, Merchants must accept any
(2) The Merchant must take delivery in
shortages or surplus items of wrong mark
accordance with Tariff provisions, failing
etc. as alternative goods in proportions
which the Carrier can put the goods into
decided by the Carrier at his absolute
store for the account of the goods, which
discretion.
constitutes delivery, so that the goods are
then at the risk of the Merchant, who is also Clause 22: General Average & Salvage
liable for all subsequent charges. For an explanation of GA, please refer to Part 2
Section 9
(3) If the Merchant does not take delivery with
in 30 days of the time required under (2), or (1) New Jason Clause. This has been
if the goods appear likely to deteriorate or incorporated into the Bill only to cover the
become consumed with charges, the Carrier unlikely event of GA being adjusted in
can sell them to offset outstanding charges. America according to U.S. law, which
prevents Carriers recovering GA contribution
(4) If the Merchant refuses to take delivery of
in certain circumstances, unless they have
the goods whether or not damaged, he
made specific contractual provision to allow
prejudices his right to claim against the
this.
Carrier.
(2) GA Clause to make the necessary
(5) If the Carrier agrees to a change of
contractual provisions for the providing of
destination, without making any qualifying
security in respect of and adjustment of
stipulations, the Bill of Lading terms
General Average.
continue to apply to the amended Carriage,
provided the Tariff allows. If not the Carrier (3) As GA invariably involves dealing with
acts as agent only to arrange oncarriage. amounts in different currencies, provision is
made for exchange.
Liability for multi point deliveries ceases
upon arrival at the first delivery point, (4) Sister-ship salvage clause.
thereafter Carrier is agent only.
(5) Master is appointed as agent to engage
(6) In some ports the Carrier has no option but salvage services if needed and Carrier to
to deliver goods to some authority or other settle any salvage claim.

61
(6) Provides for the payment of interest on late Lading designed to operate worldwide, the
payments of General Average contributions. division of liability and defences being provided
for in a general way designed for universal
(7) Provides for the Carrier to act as banker for application. Some clauses, whilst being applied
any G.A. contribution unclaimed 5 years generally, are aimed at specific problems in
after publication of the adjustment. certain areas (e.g. 7(6) and 11(3)) but in the case
of the U.S. there is need to make special
Clause 23: Variation of the Contract
separate provisions designed solely to meet the
Contract can only be varied by the Carrier's prior
vagaries of the laws of that country. As P&O
agreement in writing.
Nedlloyd is engaged in trading to and from the
U.S., often with a transhipment between the
Clause 24: Law and Jurisdiction
U.S. and other destinations (or vice versa), there
Provides for the legislation and jurisdiction
is need for us to make such provisions, even in
which will be used to determine any dispute and
Bills of Lading for trades not directly involved in
allows the parties to agree to arbitration as an
U.S. trading.
alternative to litigation.

This clause makes provision for application of

Clause 25: Validity
the appropriate U.S. legislation, in a way in
If anything in the contract is invalid because of
which litigation has shown necessary, and
any international convention or national law, it
provides for an alternative of New York
is only the part that is invalid which is made
jurisdiction. To come into line with usual
null and void and the remainder of the contract
practice in the U.S., P&O Nedlloyd acts as a
survives intact.
Through Transport Operator only in the U.S.
Clause 26: Limitation of Liability
(1) Provides for the application of the U.S.
As present international conventions governing
Carriage of Goods by Sea Act 1936 . . .
global limitation of liability (in the event of a
“throughout Carriage by sea and the entire
major catastrophe affecting a substantial part of
time that the Goods are in the actual custody
the adventure) were drafted before containers
of the Carrier or his Sub-Contractor at the
and make no specific provision for Slot
sea terminal in the U.S. . . .”
Charterers/Consortium Partners (who, as
principal Carriers, have a primary responsibility
(2) Provides that the Carrier acts as agent only
to their Merchants) to have any benefit of such
on land in the U.S. away from the sea
limitation, this clause seeks to clarify this
terminal.
position in a contractual way to ensure that a
Slot Charterer may limit his liability to his (3) Provides details of the limitation of liability.
proportion of the limitation fund. The clause also
provides how the Slot Charterer's share of (4) Offers alternative law and jurisdiction
contribution to the fund shall be calculated. provisions.

Clause 27: USA Clause Paramount If and when the U.S. enacts an updated COGSA
Generally speaking “local clauses” are regarded (See Part 2 Section 4: NATIONAL LAWS) This
as an anathema in Combined Transport Bills of clause will need to be amended.

62
Part 2
Section 3: International
Conventions Relevant to
Combined Transport
(as at 31st October 1999)
INTERNATIONAL CONVENTIONS CMI
International conventions set out minimum All major trading nations have a national
terms and conditions for the international association of maritime lawyers (in the UK -
carriage of goods, below which Carriers cannot British Maritime Law Association) which is
contract to the detriment of Merchants. Carriers responsible for monitoring developments in
can, of course, offer terms more favourable to maritime law internationally and making
Merchants. Generally speaking international appropriate recommendations to its government
conventions aim to regulate international on matters relating to maritime law. These
carriage and, in most cases, national carriage is national maritime law associations subscribe to
allowed freedom of contract, although, in most an international forum known as the Comite
countries, there are standard trading conditions Maritime International (CMI) domiciled in
which are usually applied (see Part 2 Section 5). Belgium whose prime aim is the promotion of
international uniformity in the law governing
These international conventions are drafted by maritime matters. National delegates meet in
various committees under the auspices of the Conference approximately every four years at a
United Nations and are given effect by countries suitable venue to discuss maritime legal
adopting them into their national legislations. It developments and approve drafts of rules (like
is thus through these national laws that the York Antwerp Rules on General Average, the
international conventions become mandatorily Uniform Rules for Sea Waybills etc.) and
applicable within the jurisdictions of the potential international conventions (like the
countries concerned to be applicable to carriage Hague and Hague Visby Rules).
in certain defined circumstances.
UNCITRAL
P&O Nedlloyd's Bill of Lading terms and
The Vienna-based secretariat of the United
conditions have been drafted so that, if it is
Nations Commission on International Trade Law
known at what stage of the Combined Transport
is charged by the UN General Assembly with the
loss or damage occurred, its liability shall be
task of progressing the unification of the law on
governed by any convention that is mandatorily
international trade by co-ordinating the work of
applicable to that stage. Otherwise P&O
organisations active in the field (e.g. CMI) and
Nedlloyd's liability is governed by the terms and
encouraging co-operation amongst such
conditions that are set out in detail in its Bill of
organisations. It is particularly tasked with
Lading (see Part 2 Section 2B).
maintaining close co-operation with UNCTAD.
However, conflict in the interpretation of their
PARTIES WHO PREPARE CONVENTIONS
respective terms of reference seems to have
In the area of maritime carriage there are four
soured relationships between these two bodies
parties who have traditionally provided the fora
and caused conflict.
for the discussion and drafting of international
conventions relevant to this subject: CMI,
UNCITRAL, UNCTAD and IMO.

63
UNCTAD not been superseded by the Hague Visby Rules
The Geneva-based United Nations Conference on (see sub-section A(ii)) or the Hamburg Rules (see
Trade and Development was established in 1964 sub-section A(iii)) either by the application of law
with a remit to develop the friendly integration or by contractual incorporation into the terms
of the developing countries into the world's and conditions of the relevant Bill of Lading. The
economy. UNCTAD is a much more politically main features of the Hague Rules are as follows:
minded and aggressive organisation than
(a) They provide the minimum terms which a
UNCITRAL and seems to suffer from a keenly
Carrier may offer for the carriage of all goods
felt need to succeed in the maritime law arena
other than live animals, non-commercial
following the failures of its Hamburg Rules and
goods (such as personal and household
UNCTAD MMO projects to attract widespread
effects), experimental shipments and goods
support. Its approach tends to be politically
carried on deck where the Bill of Lading is
based to favour developing countries at the cost
claused to indicate such carriage.
of practicality, so that it often finds itself in
conflict with practitioners in international trade. (b) The Carrier has to exercise due diligence to
provide a seaworthy vessel at the
IMO commencement of the voyage and this duty
The International Maritime Organisation (IMO), cannot be delegated. He also has to care for
based in London, is a specialised agency of the the goods properly during transit. Provided
United Nations primarily concerned with that he has complied with these
maritime safety and the prevention of marine requirements, if loss or damage still occurs,
pollution. To this end it is involved in the he can rely on a number of stated defences.
preparation of international conventions and The majority of these merely elaborate on
codes such as SOLAS (Safety of Life at Sea) of the general principle that the Carrier is only
which ISM is a chapter (see sub-section A (vii) liable for loss or damage caused by his own
for details). negligence, or that of his servants, agents or
sub-contractors. However the Carrier is still
A. SEA CARRIAGE protected in three cases where the loss or
damage has been caused by negligence:
It is our experience that, catastrophes and
refrigerated goods apart, most events giving rise ! negligence in navigation;
to claims occur on land, rather than at sea, so ! negligence in the management of the vessel
only a minority of claims against us are dealt (as opposed to care of the cargo); or
with under the sea carriage conventions but ! fire, unless by the actual fault or privity of
these are usually the larger claims. the Carrier (i.e. the person in the company
with the guiding hand) - now, with ISM in
(i) Hague Rules
operation, it would probably be the
These Rules were agreed at an international
“Designated Person”.
convention at Brussels in 1924 and govern
liability for loss or damage to goods carried by (c) Liability was limited to £100 per package in
sea under a Bill of Lading. They are officially the UK (before the Hague Visby Rules
known as “The International Convention for the superseded the Hague Rules). Other nations
Unification of Certain Rules relating to Bills of in enacting Hague Rules have set alternative
Lading”, were signed in Brussels on 25th August limits expressed in their domestic currency,
1924 and were given effect in the United whilst Carriers contractually incorporating
Kingdom by the Carriage of Goods by Sea Act the Rules usually make separate provision
(COGSA) 1924. for the limit - usually £100 or U.S.$500 per
package.
The Rules were designed to apply to all exports
from any nation which ratified the Rules and, by (ii) Hague Visby Rules
and large, this is how they are applied. They In 1968 a further international conference
apply almost universally, wherever they have adopted some revisions to the Hague Rules,

64
principally affecting limitation. The amended of whom had to have a minimum gross registered
Rules are officially known as the “Brussels tonnage of 1 million tons. These requirements
Protocol” signed on 23rd February 1968, but are were satisfied in June 1977. To date (1st
more popularly known as the Hague Visby Rules January 2003) the states who apply these Rules
and were given effect in the United Kingdom by are:
the Carriage of Goods by Sea Act (COGSA) 1971. Australia Netherlands
Belgium New Zealand
Limitation was amended to provide a Canada* Norway
weight/package alternative and originally the Croatia Oman*
limits were set in Poincare Francs. However, this Denmark Poland
proved inconvenient, as the Poincare Franc is a Ecuador Portugal*
fictitious currency in constant need of Finland Russia*
redefinition in terms of world currencies. With France Singapore
no readily available source of such information, Germany* South Africa*
frequent revaluations in national currency of the Greece Spain
Poincare Franc limits were necessary. Hong Kong Sri Lanka
Accordingly, the 1979 Special Drawing Rights Iceland* Sweden
Protocol was drafted to provide limitation in Indonesia* Switzerland
SDRs, whose value in terms of world currencies Ireland Syria
is readily available from the usual sources of Israel* Tonga
financial data. This Protocol came into effect in Italy United Kingdom
February 1984 in those states which had Japan (inc.the Isle of Man,
contracted thereto. The states in which SDR Latvia* Gibraltar and
limits are operative at present (1st January Liberia* Bermuda)
2003) are: Luxembourg Vietnam*
Australia Latvia* Mexico
Belgium Liberia*
Canada* Luxembourg *Applied by domestic legislation only
China* Mexico
China, India, Korea (South), Thailand and
Croatia Netherlands
United Arab Emirates have enacted legislation
Denmark New Zealand
broadly in line with the Rules.
Finland Norway
France Poland The U.S. Maritime Law Association produced a
Germany* Russia draft revision of the U.S. 1936 COGSA based on
Greece South Africa* the Hague Visby Rules (see Part 2 Section 4-U.S.
Hong Kong Spain for details). This project is currently being
Iceland* Sweden deferred as the U.S. is co-operating with the CMI
India* Switzerland on it’s draft transport document. It appears that
Ireland United Kingdom (inc. the CMI’s document has been received with some
Israel* the Isle of Man, hostility by UNCTAD (probably because it is
Italy Gibraltar and Hague Visby and not Hamburg Rules based) and
Japan Bermuda) the latest information is that the U.S. will
re-instigate it’s COGSA revision project if
*Applied by domestic legislation only
negotiations between the CMI and UNCTAD
Limitation in terms of SDRs is now the greater reach stalemate, as appears increasingly likely.
of SDR 666.67 per package or unit or SDR 2 per
Note that the above list is of countries that apply
kilo.
the Rules. Not all have ratified or acceded to
The 1968 convention provided that the Visby them. Some have merely adopted them in
amendments would come into effect after the domestic legislation.Some nations have enacted
convention had been ratified by ten nations, five legislation based on the Rules without adopting

65
them in total (see news item at end of this (b) The Carrier is liable for delay in delivery if
Section for details). The Visby amendment is “the goods have not been delivered at the
designed to apply to all Bills of lading where: port of discharge provided for under the
contract of carriage within the time
(a) the port of shipment is in a ratifying nation;
expressly agreed upon or, in the absence of
(b) the place of issue of the Bill of Lading is in a such agreement, within the time which it
ratifying nation; or could be reasonable to require of a diligent
Carrier having regard to the circumstances
(c) the Bill of Lading applies Hague Visby of the case.”
Rules contractually.
(c) The dual system for calculating the limit of
(iii)Hamburg Rules liability, either by reference to package or
In March 1978 an UNCTAD instigated weight as set out in the Hague Visby Rules,
international conference in Hamburg adopted a has been readopted, but the amounts have
new set of rules (the Hamburg Rules) which been increased by about 25% to SDR 835 per
radically alter the liability which shipowners package and SDR 2.5 per kilo. The liability
have to bear for loss or damage to goods in the for delay is limited to an equivalent to two
courts of those nations where the Rules apply. and a half times the freight payable for the
The main differences between the new Rules and goods delayed, but not exceeding the total
the old Hague Visby Rules are as follows: freight payable for the whole contract under
which the goods were shipped. In no case
(a) The Carrier will be liable for loss, damage or
shall the aggregate liability for both
delay to the goods occurring whilst in his
loss/damage and delay exceed the limit for
charge unless he proves that “he, his
loss/damage.
servants or agents took all measures that
could reasonably be required to avoid the (d) The Hamburg Rules cover all contracts for
occurrence and its consequences.” The the carriage by sea other than charter
detailed list of exceptions set out in the parties whereas the Hague/Hague Visby
Hague and Hague Visby Rules is no longer Rules only apply mandatorily as an
available to the Carrier. In particular the international convention where a Bill of
Carrier is no longer exonerated from liability Lading is issued. The Hamburg Rules are
arising from errors in navigation, therefore applicable to Waybills,
management of the ship or fire. All the case Consignment Notes etc. (One of the few
law that has built up over seventy five years advantageous provisions in the Hamburg
since the Hague Rules were introduced, and Rules).
which has largely clarified and made certain
the effect of those Rules, to the great benefit (e) They cover shipment of live animals and
of both Merchant and Carrier alike, will be deck cargo, whereas Hague/Hague Visby
inapplicable where these Rules are applied. Rules may not.
They are therefore bound to lead to far more
(f) They will apply to both imports and exports
disputes. No less a person than the late Lord
to/from a signatory nation (i.e. all that
Diplock observed about the requirement that
nations trade) whereas Hague/Hague Visby
the shipowner is liable unless he proves that
(if applied as intended by the drafters) apply
he “Took all measures that could reasonably
to exports only. This will create conflict and
be required to avoid the occurrence and its
undesirable forum shopping for litigation.
consequences” that “speaking from many
years experience as a Judge I think, given The Rules became operative as an international
that very broad definition, I could decide convention one year after ratifiation or accession
almost everything as I personally like and I by twenty nations, with no minimum tonnage
think other Judges may feel exactly the qualification. The requisite 20 nations were
same.” Hardly a recipe for certainty! obtained in November 1991 with the signature of
Zambia so the Hamburg Rules came into force in

66
November 1992. Present (1st January 2003) interesting to note that at a colloquium in
adherants are: Antwerp in November 1993 entitled “The
Austria Lebanon Hamburg Rules: A choice for the EEC”, at which
Barbados Lesotho papers were presented by leading maritime law
Botswana Malawi academics (Herber, Tetley, Berlingieri, Ramberg,
Burkina Faso Morocco Remand-Gouilloud, Gaskell, Japikse, Hill and
Burundi Nigeria Delwaide), not a few of whom are self-confessed
Cameroon Romania proponents of the Hamburg Rules, not one of
Chile St Vincent & the them actually recommended the widespread
Czech Republic Grenadines adoption of the Hamburg Rules. Instead it was
Egypt Senegal recognised that there was considerable
Gambia Sierra Leone controversy surrounding the Rules, even
Georgia* Slovakia amongst academics who have nothing to lose or
Guinea Tanzania gain from their implementation, and the talk
Hungary Tunisia was of a further diplomatic conference to review
Iraq** Uganda the Hamburg Rules to make them more
Jordan Zambia acceptable to the maritime community at large.
Kenya Meanwhile the Hamburg Rules merely create an
anomalous irritant. As a large proportion of
*Also a signatory to Hague Visby.
Hamburg Rules signatories are land-locked
**Applied by domestic legislation only.
and/or have yet to pass the necessary enabling
(Note that 11 of these signatories are land
domestic legislation, the Rules are easily
locked.)
avoidable in many cases. The criteria for
It is unfortunate that we should be burdened application of the Rules are that port of loading
with these new rules, which will add to the or discharge is a contracting state, Bill of Lading
confusion of practitioners over the recourse to issued in a contracting state or contractual
which they are entitled by destroying the incorporation. Thus, for a combined transport
uniformity under the Hague and Hague Visby movement from a landlocked contracting state,
which are complementary. Hamburg, as a third all that needs to be done is to avoid issuing the
force, introduces conflict and threatens to be a Bill of Lading in that state. For example for a
“lawyers' charter to print money”! shipment from Austria (a contracting state) the
Bill could be issued in Germany, Switzerland or
Fortunately, unless one trades with Africa, the Italy and the Hamburg Rules would not be
chances of encountering Hamburg Rules are mandatorily applicable.
relatively remote at present, as none of the major
trading nations is, or seems likely to become a The West of England P&I Club advises that the
Hamburg signatory in the near future. Chile courts of Lebanon, Romania and Egypt have
considered denunciation and many of the applied the Hamburg Rules. Whilst these rules
signatories to the international convention have will clearly be enforced in litigation heard before
not, as yet, enacted the necessary national the domestic courts of the countries in question,
legislation to give effect to the Rules in their the Hamburg Rules still have no claim as an
courts. In fact, to date, only Austria, Burkina acceptable basis for producing uniformity in
Faso, Chile, Czech Republic, Gambia, Georgia, Carriers’ liability regimes, as their adherents are
Lebanon, Morocco, Senegal, Tunisia and Uganda generally not nations of great consequence in the
appear to have done so. So far, apart from general pattern of global trade.
Austria and five Central/Eastern European
Current Developments
nations (see above), no European nations appear
likely to adopt these Rules. In the unlikely event Over four years ago, an international sub-
of this occurring, that will be the time when it committee (ISC) of the CMI set about gathering
will be necessary to take significant account of information regarding current practices and laws
the Hamburg Rules . In this context it is relating to the international carriage of goods by

67
sea, with a view to establishing uniform rules in always subject to the overriding application of
areas where none existed. These areas included the provisions of the LLMC or equivalent
freight, delivery and transfer of rights convention relating, inter alia, to limitation of
incorporated in a transport document or an liability. The current UK Act is the Merchant
electronic record. Shipping Act 1995, which implements the 1976
International Convention on Limitation of
At a meeting in Singapore in February 2001, the
Liability for Maritime Claims (LLMC). This new
scope of the enquiry was widened and the ISC
convention applies a virtually unbreakable right
was instructed to cover the possibility that a
to limit with increased levels of limitation as
draft instrument, proposing a uniform transport
follows:
law, be extended to apply to other forms of
carriage associated with carriage by sea. It (a) In respect of loss of life or personal injury
would therefore provide a framework for the (other than passengers for whom a separate
Carrier’s responsibility from receipt to delivery. fund applies);
All of this culminated in the submission to the
(i) 166,667 units of account (SDRs) for a vessel
secretariat of UNCITRAL of the CMI Draft
with tonnage not exceeding 300 tons;
Instrument on Transport Law on 11th December
2001. The instrument dispenses with the defence (ii) 333,000 SDRs for a vessel with tonnage not
of negligent navigation and is described as a exceeding 500 tons; and
modernised Hague-Visby Rules rather than a
shrunk Hamburg regime. In April 2002, a (iii) For a vessel with tonnage in excess thereof,
meeting in New York raised several objections to in addition to that mentioned in (ii):
the new document, notably whether or not the
For each ton from 501 to 3,000 tons: 500 SDRs
instrument should apply Port-to-Port or Door-to-
For each ton from 3,001 to 30,000 tons: 333
Door. UNCTAD indicated that a Multi-Modal
SDRs
Transport regime was their province and not
For each ton from 30,001 to 70,000 tons: 250
UNCITRAL’s and some resistance was also
SDRs
demonstrated by those countries with a
For each ton in excess of 70,000 tons: 167 SDRs.
substantial amount of traffic undertaking a short
sea leg and a longer inland transport leg, for (b) In respect of any other claims:
example Germany and Sweden. CMI resisted
(i) 83,333 SDRs for a vessel with tonnage not
these objections since it stated it is not it’s
exceeding 300 tons;
intention merely to merge Hague-Visby or
Hamburg whilst not addressing the gaps in these (ii) 167,000 SDRs for a vessel with tonnage not
regimes (for example Warehousing, Jurisdiction exceeding 500 tons; and
and Title to Sue).
(iii) For a ship with a tonnage in excess thereof,
In view of these differences of opinion it is in addition to that mentioned in (ii):
unlikely that anything of substance will be
agreed for several years, but, if the present For each ton from 501 to 30,000 tons: 167 SDRs
instrument were adopted, it would have a For each ton from 30,001 to 70,000 tons: 125 SDRs
dramatic impact on door-to-door transport. For each ton in excess of 70,000 tons: 83 SDRs.
However, this is a long way and ahead and
The balances of unsatisfied loss of life or
before this can become a feasible project there is
personal injury claims (a) can participate pari
much work and negotiation between parties with
passu along with the other claims (b).
conflicting views to be undertaken.
Accordingly total limitation where loss of life
(iv) Limitation of Liability for Maritime and/or personal injury claims are involved in
Claims(LLMC) - The London Convention conjunction with other claims is found by adding
The liability of the Carrier under any of the the amounts produced by formulae (a) and (b)
above sea carriage conventions is, of course, together. (A separate fund is established for

68
passengers based on Athens Convention limits.) For each ton in excess of 70,000 tons, 400 SDRs.

At the present time (1st January 2003) the 1976 (b) In respect of any other claims:
Convention has been ratified or acceded to by the
(i) 500,000 SDRs for a vessel with tonnage not
following nations:
exceeding 300 tons;
Australia Ireland
(ii) 1 million SDRs for a vessel with tonnage not
Bahamas Japan
exceeding 2,000 tons; and
Barbados Latvia
Belgium Liberia (iii) For a vessel with tonnage in excess thereof,
Belize Marshall Is. in addition to that mentioned in (ii):
Benin Mexico
Canada* Netherlands For each ton from 2,001 to 30,000 tons, 400 SDRs;
Croatia New Zealand For each ton from 30,001 to 70,000 tons, 300 SDRs;
Denmark Norway For each ton in excess of 70,000 tons, 200 SDRs.
Dominica Poland
By Article 15 of the Convention, contracting
Egypt Spain
states are allowed to make alternative provisions
Equatorial Guinea Sweden
for vessels of under 300 tons. The United
Finland Switzerland
Kingdom has availed itself of this concession to
France Turkey
provide for increased limits instead of the
Georgia United Arab
166,667 SDRs for loss of life and personal injury
Germany Emirates
and 83,333 SDRs for other claims limits under
Greece United Kingdom
the 1976 Convention. These figures are increased
Guyana Vanatu
to 1 million SDRs and 500,000 SDRs respectively
Hong Kong Yemen
under the 1996 Protocol. Under the Merchant
India
Shipping (Convention on Limitation of Liability
for Maritime Claims) Amendment Order 1998
China and Korea (South) have enacted
the Protocol limits will replace the Convention
legislation broadly in line with the LLMC.
limits when the Protocol enters into force
*Applied by domestic legislation only internationally.

A 1996 Protocol to the 1976 LLMC was agreed At the present time (1st January 2003) the 1996
on 3rd May 1996, as part of the HNS diplomatic Protocol has been signed by the following
conference in London, to update the levels of nations:
liability set out above. It enters into force 90 Australia Germany
days after the 10th state expresses consent to be Canada Netherlands
bound by it. The new limits are: Denmark Norway
Finland Sweden
(a) In respect of claims for loss of life or personal
France United Kingdom
injury:

(i) 1 million SDRs for a vessel with tonnage not In addition Russia has acceded to, the United
exceeding 300 tons; Kingdom and Norway have ratified, and Finland
has accepted the Protocol.
(ii) 2 million SDRs for a vessel with tonnage not
exceeding 2,000 tons; and Most other nations apply earlier conventions
with lower levels of limitation and a “fault and
(iii) For a vessel with tonnage in excess thereof,
privity” approach to the right to limit, whilst
in addition to that mentioned in (ii):
others use the basis of the value of the ship plus
For each ton from 2,001 to 30,000 tons, 800 freight earned at the end of the voyage (U.S.
SDRs; being a prime example).
For each ton from 30,001 to 70,000 tons, 600
SDRs;

69
(v) Lloyd's Open Form 2000 and York included unless the parties specifically agree to
Antwerp Rules 94 exclude it. The SCOPIC Clause basically
In September 2000, the LOF2000 Lloyd's Open provides that Salvors shall receive compensation
Form of Salvage Agreement came into force. At in circumstances where the salved fund is
just two pages long it is shorter than its insufficient to recover adequate Article 13
predecessors, because all legal and procedural remuneration. It provides for an alternative
information is now included in a separate regime for the determination of claims for special
document, so as to make the form more user- compensation that would otherwise be dealt with
friendly. The provisions relating to arbitration by the LOF arbitration process.
have largely remained the same, although there
The latest version of the York-Antwerp Rules
are some other minor changes which deem that
governing the adjustment of General Average is
the contract has been completed in certain
the 1994 version. Most Bills of Lading now
circumstances. There is also a new obligation on
incorporate these rules, although some still refer
Owners to ensure that goods are not released
to the 1974 Rules. Discussions are presently
until salvage security has been put up and
underway regarding further amendments to the
extended to cover bunkers and stores.
York-Antwerp Rules, although it is likely to be
Of more importance is the new Clause A, which 2005 before any revisions are agreed and any
requires the Contractor to take the salved new rules published.
property to a place of safety. The deliberate
(vi) H.N.S. (Convention on the Carriage of
omission of a clause which deems a place to be
Hazardous and Noxious Substances
one of safety is designed to protect the Salved
by Sea)
Interests’ ability to pursue an action against
This is an international convention agreed at a
Salvors. Additionally LOF2000 gives Salvors a
diplomatic conference in May 1996 in London
specific right (in certain circumstances and after
which comes into force 18 months after 12 states
giving reasonable written notice) to abandon
(4 with a fleet exceeding 2 million gross tons)
their services where it is felt that there is no
have ratified with parties in those states liable to
longer any reasonable prospect of a useful result
contribute shipping not less than 40 million tons
leading to a salvage award pursuant to Articles
of contributing cargo per annum. It is designed
12 and 13 of the 1989 Salvage Convention.
to ensure adequate compensation for parties
Perhaps one of the most important changes affected by a spill of (non-oil) hazardous or
embodied in LOF2000 stems from the noxious cargoes from a two tier fund. The first
dissatisfaction of Salvors with the position layer is funded by carriers and the second layer
relating to payment for pollution clean-up costs by cargo interests. The provisions of the
as established in the House of Lords decision in Convention are extensive and complicated and
the “Nagasaki Spirit”. In that case special any Merchant involved with the shipment of
compensation was allowed but was made on the hazardous or noxious substances is
basis of cost with no mark up. The International recommended to seek a closer understanding of
Salvage Union (ISU), in negotiations with the the Convention through their trade association
P&I Clubs, agreed an amendment which varied before it comes into force.
the meaning of the 1989 Salvage Convention.
To date, only eight nations have signed this
That amendment provided for enhanced awards
convention, so its implementation cannot be said
for Salvors, in return for the right of intervention
to be imminent. The eight nations who have
by the Shipowners and/or their P&I Club in the
signed (as at 31st October 2001) are:
salvage arrangements. Thus the Special
Compensation P&I Clubs Clause (SCOPIC) was Canada Netherlands
first introduced in August 1999 to be used, by Denmark Norway
agreement of the parties, in conjunction with Finland Sweden
LOF1995. LOF2000 changes the position in that Germany United Kingdom
it provides that the SCOPIC clause shall be

70
However, ratifications have been received from reference to the segregation of incompatible
Angola and the Commonwealth of Independent substances. The latest amendments were
States. adopted in May 2002 and these amendments
make the code mandatory. They come into force
(vii) ISM Code (International Safety
on the 1st January 2004, but they may be
Management Code: Chapter IX of IMO
applied on a voluntary basis as from 1st January
SOLAS Convention)
2003.
This Code came into effect on 1st July 1998 for
passenger ships, high speed craft, tankers and The code is kept under constant review on a two-
gas and bulk carriers. It came into effect for yearly time cycle to make necessary amendments
other cargo vessels and container ships on 1st in line with developments.
July 2002.

The Code requires all vessel operators to have in B. LAND CARRIAGE

position a full set of procedures governing the (i) CMR
safe operation of the vessel. This includes This is the convention governing the
requirements for the establishment and International Carriage of Goods by Road signed
maintenance of a liaison channel between the at Geneva in 1956 and enacted into the laws of
vessel and a “Designated Person” amongst the the UK by the Carriage of Goods by Road Act
shore staff, to ensure a continuous 1965. The convention only appears to have been
communication to investigate all accidents and adopted by European nations and applies to
operate an ongoing audit and update of contracts for the international carriage of goods
procedures. The “Designated Person” has to have by road in vehicles over the territories of two
access to the highest level of management and is different countries of which at least one is a
the person accountable for compliance with the contracting party to CMR. It therefore only
Code. The procedures produced are known as the applies to UK imports/exports by rollon/roll-off
“Safety Management Systems” (SMS) and have ferry or the Channel Tunnel where goods remain
to be produced as a set of instructions which on road vehicles throughout. If the same
have to be approved by the regulatory body container on the same journey was lifted off the
appointed for the purpose by the authorities at trailer at Dover onto a vessel and carried to the
the vessel's state of registry. This approval is Continent and there lifted onto another trailer,
signified by the issue of a “Certificate of there would have been no crossing of a frontier
Compliance”, a copy of which must be available on a road vehicle and therefore the convention
on board the vessel for inspection by appropriate would not apply. For this reason the CMR
port and state authorities. convention is not applicable to UK exports or
imports in the P&O Nedlloyd service, but it will
A vessel that is not ISM Certificated and in
apply in some P&O Nedlloyd shipments to or
possession of a copy of a valid “Certificate of
from the Continent, for instance where Belgian
Compliance” risks denial of access at ports who
imports or exports are fed from or to Rotterdam.
require ISM compliance as prerequisite of entry
It will not apply mandatorily (although it may be
or even detention by port state control
applied contractually) where Dutch imports or
authorities. ISM Certification is also required by
exports are shipped via Rotterdam, since such
insurers as a precondition of cover.
imports and exports do not cross a frontier on a
(viii) IMDG Code (International Maritime vehicle.
Dangerous Goods Code: Chapter VII
Under this convention the Carrier is liable for
of IMO SOLAS Convention)
loss or damage from the time that he takes over
The International Maritime Dangerous Goods
the goods until the time that he delivers them to
(IMDG) Code was developed as a uniform
the Consignee, unless he can prove that the loss
international code for the transport of dangerous
or damage occurred because of one of a list of
goods by sea covering such matters as packing,
excepted perils. The defences available to the
container traffic and stowage, with particular
Carrier are limited and very difficult to establish

71
so that the premise is almost one of strict either the Warsaw Convention 1929 or the
liability, because the limited exceptions impose Amended Warsaw Convention 1955. Which of
such an onerous burden of proof. The Carrier is these Conventions applies depends on which
entitled to limit his liability to SDR 8.33 per kilo, Convention the countries of departure and
however cargo interests are entitled to recover a arrival have ratified. For one of the Conventions
return of freight and other charges relating to to apply, both of the countries must have ratified
carriage and duty on top of this limitation The the same Convention; if both have ratified the
Carrier is also liable for delay if the goods have Amended Warsaw Convention then, irrespective
not been delivered within the agreed time limit of whether they have both also ratified the
or, if there is no such agreement, within a earlier Convention, the Amended Warsaw
reasonable time. Liability for delay is again in Convention applies. Contractual Carriers (such
addition to the SDR 8.33 per kilo and is up to the as Freight Forwarders acting as Principals) are
amount of the carriage charges. Note also that also subject to the Conventions. Unlike other
limitation may be broken in the case of wilful transport conventions, both Warsaw Conventions
misconduct. require that certain information is stated on the
Air Waybill, the absence of which will prevent
(ii) COTIF/CIM
the Carrier from relying on both the exclusions
The COTIF Convention Concerning International
and limitations of liability in the Convention
Carriage by Rail was signed in Berne in May
and, in the case of the Amended Warsaw
1980. It was given legal effect in the UK by
Convention, will not entitle the Carrier to rely on
Section 1 of the International Transport
the limitations of liability. The limit of liability is
Conventions Act 1983 w.e.f. May 1985. COTIF
250 Poincare (gold) francs or, if the Montreal
abrogated the existing CIM Convention, which
Protocols 1-3 of 1975 have been ratified, 17 SDRs
did not have force of law in the UK, and an
per kilo.
amended draft of CIM was attached to COTIF as
Appendix B to govern the carriage of goods
Montreal Protocol No. 4 came into effect in June
(COTIF has a wider application and covers
1998. The scope of application of this Protocol is
passengers etc. as well as goods). CIM applies if
presently unclear (other than that it will not
either the place of loading or the destination of
apply to carriage by air to the U.S.) but where it
the goods is a COTIF member state.
is applied there will be some important changes.
Like CMR, COTIF/CIM applies only to
international carriage and is not applicable to # It will no longer be necessary for an Air
domestic traffic. Waybill to be issued in order for the
Convention to be applicable. This is clearly
The opening of the Channel Tunnel extended the designed to remove the need for tangible
application of COTIF/CIM recourse. As a private documentation to facilitate electronic
company the Channel Tunnel operates an “documentation”.
independent contract not subject to any
mandatory law in which liability for delay is # The “all necessary measure” Hamburg Rules
excluded and a limitation of SDR 8.33 (same as style defence is replaced by a menu of
CMR) is applied. specific defences (like the Hague Rules).

The terms and conditions of COTIF/CIM are # The possibility of breaching the limitation in
similar to CMR but limitation is substantially Article 22 is removed and this limit is now
higher at SDR 17 per kilo. The Carrier may also unbreakable.
be liable for delay with a limitation of 4x the
On 28th May 1999 in Montreal a new convention
carriage charges.
was adopted and signed by 53 nations. It is
intended to replace the Warsaw Convention and
C. AIR CARRIAGE its six protocols. Whilst the new convention is
Warsaw Convention designed to unify the current private airline
International air carriage of goods is subject to rules with respect to passenger injury and death
claims, it will adopt all of the cargo related
72
matters under the Montreal Protocol No. 4. The complying with them.
liability section of the Convention hopes to
(ii) UNCTAD MMO Convention
reduce costly legal argument on which local
The United Nations Conference on Trade and
limitation of damage law might apply to cargo
Development (UNCTAD) was dissatisfied with
mishap during any particular part of an inter-
this situation and decided to intervene with an
modal international air move.
international convention to govern Combined
It does this by providing that the carriage is Transport. This was finally adopted at an
subject to one law and one limitation of SDR17 international conference in Geneva in May 1980
per kilo. Additionally, where the contract of as the “United Nations Convention on
carriage reflects intended movement by air and International Multimodal Transport of Goods”
does not mention road or ocean links, the (or “UNCTAD MMO Convention” as it is more
Convention will apply, even though part of the commonly known).
carriage is, in fact, performed by another mode of
Like Hamburg Rules, if introduced it seems
carriage. For example, if the booking was made
inevitably bound to increase Carrier's insurance
to transport goods from Moscow to Glasgow and
costs, which will probably be reflected in
an Air Waybill was issued which showed that
increased freight rates without any
movement, any ocean or road links which might
corresponding reduction in cargo insurance
be involved in that transport are deemed to be
premiums.
part of the air carriage, since the Air Waybill
manifests the goods from Moscow to Glasgow. It will come into force 12 months after the
deposit of the documents of ratification,
Countries who have ratified, accepted or acceded
acceptance, approval or accession with the UN in
to the new Montreal Convention include :-
New York by the 30th country, with no minimum
Bahrain Macedonia tonnage qualifications.
Belize Mexico
Czech Republic Slovakia To date, it has been ratified by nine countries

Japan UAE only:

Burundi, Chile, Georgia, Malawi, Mexico,
Morocco, Rwanda, Senegal and Zambia.
UNCTAD MMO owes much in its drafting to
D COMBINED TRANSPORT Hamburg Rules and its approach to limitation of
(i) ICC Rules for a Combined Transport liability may be described as “a plateau with
Document peaks showing through”. That is to say, the Rules
Some years ago, an attempt was made to draft a set a limit (about 10% above the Hamburg limit
convention to cover loss or damage to goods and expressed in SDRs) with a dual weight/
carried under a Combined Transport Document. package alternative criterion, but where any
Known variously at different stages as the unimodal conventions apply a higher limit of
“Tokyo-Rome Rules”, the “ Tokyo Rules” and the liability, and loss or damage occurs in their
“TCM Convention”, it failed to secure general period of applicability, their limits apply in
support. The International Chamber of preference to the UNCTAD MMO limit.
Commerce took up the rejected draft and made
It has been over 20 years since the MMO
several amendments to make it commercially
convention was adopted. Significant advances in
more attractive. The final draft was published as
technology and communication, together with
the “ICC Rules for a Combined Transport
prolific globalisation have resulted in the
Document (Brochure No. 298)”. These have found
substantially increased use of multi-modal
wide acceptance amongst Combined Transport
transport. In the absence of uniform
Operators and most large operators, like P&O
international regulation, national and regional
Nedlloyd, apply terms and conditions which are
laws are applied, which create further diversity
based on the ICC Rules, if not precisely
at international level. As UNCITRAL was

73
recently asked to consider the Draft CMI ambiguous wording of Article 5 of the Hamburg
Instrument on Transport Law, UNCTAD has Rules? There is clearly a hidden agenda at work
responded by sending out a questionnaire to here to promote the Hamburg Rules and an
canvas views on the feasibility of a new UNCTAD drafted convention!
international multi-modal convention.
Accordingly there will be few, if any, Carriers
It appears therefore that the MMO Convention is prepared to be persuaded to adopt these
now never likely to come into force. Whether the voluntary Rules instead of the present ICC
new CMI propose convention (see A (ii) – Rules, which most likely will remain the basis
Current Developments above) will govern multi- for most Combined Transport contracts,
modal transport appears largely to depend upon including those of P&O Nedlloyd.
whether UNCTAD maintains it’s reported
The UNCTAD/ICC Rules are likely to find few
opposition, arguing that CMI/UNCITRAL should
adherents, beyond a few NVOCCs who adopt
restrict themselves to sea carriage and that
them in order to qualify to use the ICC Logo on
multi-modal transport is UNCTAD’s
their Bills of Lading as a promotional ploy.
responsibility.
(iv) ICC - Assessment of “contentious” text
(iii)UNCTAD/ICC Rules for Multi-Modal
of the MT Convention
Transport Documents
At the beginning of 1999, clearly disappointed at
As part of their continuing campaign to promote
the lack of success of the UNCTAD MMO and
the Hamburg Rules and UNCTAD/MMO
the UNCTAD/ICC Rules, the ICC launched a
Convention, UNCTAD sought the co-operation of
discussion paper under the above heading
the ICC to review and update the ICC Rules for
seeking to revive interest in a multi-modal
a Combined Transport Document (see above).
convention, or at least a set of overriding multi-
The ICC Rules were in need of neither revision
modal rules with a common liability approach
nor update and their general basic application
throughout the different modes of transport. This
worldwide attested to their acceptability to the
initiative was strongly rejected by the shipping
parties concerned. Surprisingly ICC were
industry, who saw it as an attempt to move the
persuaded to join UNCTAD in this matter,
problem from between the Merchant and the
possibly on the basis that a workable
Contracting Carrier to between the Contracting
compromise which would appease UNCTAD
Carrier and his sub-contractors rather than solve
might be achieved.
the problem, which they saw as being
The working party constituted under Professor exaggerated anyway.
Jan Ramberg to review these Rules was given a
This “assessment” is ongoing in an effort to
clear brief to base its draft on the Hague Visby
promote the UNCTAD/ICC Rules, but it is now
Rules. They claim to have done so but to claim to
clearly linked to and absorbed by the
provide Rules based on the Hague Visby Rules
developments outlined in Part 2 Section 3A(ii) -
without incorporating the Article 4 Rule 2 tariff
Current Developments.
of exceptions is untenable. Merely adding back
the Nautical Fault and Fire exclusions to a Rule (v) European Union - Intermodal Liability
based on Hamburg Rules Article 5 does not equal The ICC initiative outlined above coincided and
Hague Visby Rules as any commercial judge will clashed with a report, on Intermodal Liability,
confirm. Professor Ramberg claims that a Bill of issued in July 1998, which was commissioned by
Lading issued subject to these Rules could still the European Commission Directorate - General
list the Hague Visby Rules Article 4 Rule 2 VII Transport from a committee of academics.
exceptions without contravening the Rules. This This report sought to open debate on “Intermodal
is stretching credulity too far. If the Article 4 Transportation and Carrier Liability” with a
Rule 2 tariff of exceptions is acceptable why not view to producing “Model Rules”, which would be
retain it in the Rules and retain the wealth of optional but which would apply automatically
case law based thereon rather than introduce the unless the Carrier contracted out. The problem

74
in Europe (which does not apply elsewhere in the (vi) CSC Convention
world) is that there are unimodal conventions in The 1972 Convention for Safe Containers
Europe governing road and rail transport and introduced a requirement for regular inspection
the only way in which a set of rules could be of containers by qualified personnel, a record of
produced, which did not conflict with any which is made by punching details on a metal
unimodal convention, would be to make the limit plate at the door end of the container so that a
under the rules higher than any unimodal cursory inspection can verify that a container is
convention. “in time”. It is rather like a container MOT test.
Containers operated by parties with approved
inspection systems (e.g. P&O Nedlloyd) are
exempt from these provisions.

75
Part 2
Section 4: National Laws Relevant
to Combined Transport - Latest
News
It is clearly impossible in a brochure to provide 4. The period of liability of the Carrier to be
even the briefest resume of the laws of all extended to from receipt from the Shipper up
countries to which we trade. However, as law is to delivery to Consignee (but not beyond the
national but trade is international, it is useful to port area at either end).
note briefly any unusual features of local laws 5. Application to inward movements from
that affect the contracts for the carriage of goods countries with no mandatory COGSA on
and report any news of recent and current exports.
developments. For those countries on which no 6. Incorporation of liability for delay.
report is made it is a reasonable assumption that 7. No pre-emptive action on Hamburg out of
the laws there relating to the carriage of goods line with the international trading
are unremarkable and there are no notable community but action in international fora
recent developments. to support Hamburg Rules, particularly
removal of nautical fault defence and
AUSTRALIA: In November 1991 the Carriage of
increase of time bar period to 2 years.
Goods by Sea Act 1991 came into effect in
Australia. It applied the Hague Visby Rules and On 28th August 1997 the Australian Senate
SDR Protocol but incorporated a provision for passed the amending Bill (The Carriage of Goods
these to be superseded by the Hamburg Rules in by Sea Amendment Act 1997) giving effect to the
November 1994 unless action was taken to above amendments to the 1991 Act. The new Act
prevent it. In October 1994 the Australian came into force on 15th September 1997 to
government extended the time by a further 3 remove the “Hamburg trigger” and replace it
years to November 1997 and set up a discussion with a review within five years (September 2002)
group involving all interested parties to consider with an automatic repeal of the Hamburg Rules
the problem. alternative if they are not implemented by the
time of the second review (September 2007). The
In July 1996 the Australian Department of
other amendments were introduced by way of
Transport and Regional Development issued an
regulation on 1st July 1998 by the Carriage of
Information Paper entitled “Improving
Goods by Sea Regulations 1998.
Australia's Marine Cargo Liability Regime”
proposing the following changes: As Australia's commercial law closely follows
1. The trigger mechanism for implementation that of the UK, the effect of the anomaly between
of Hamburg Rules be removed and replaced the UK's Bill of Lading Act and Sale of Goods
by regular reviews of the progress of these Act was felt in Australia as well (see UK for
Rules along the lines of the Canadian details). Most Australian states have now passed
legislation. “Sea Carriage Documents” legislation to rectify
2. The Act to apply to Non Negotiable this situation.
Documents (Waybills) as well as Bills of
In 2001 Australia enacted legislation to give
Lading.
effect to the 1996 Protocol to the LLMC. This
3. The Act to apply to deck cargo (but not live
will come into effect upon proclamation.
animals).

76
AUSTRIA: Austria has ratified the Hamburg The interpretation of Chinese Maritime Law is
Rules which came into effect there on 1st August somewhat uncertain as there does not appear to
1994. As Austria is land locked these Rules can be any case law precedent operating between
only apply if the Bill of Lading is issued in courts in different areas of China.
Austria or if the Bill contractually applies them.
The most important legislation which may affect
CANADA: On 6th May 1993 the Canadian Carriers liability in China is China's Contract
parliament passed legislation applying the Law which was promulgated in 1999. There is a
Hague Visby Rules and their SDR Protocol. The chapter dealing with the rights and obligations
Act incorporates a Hamburg “poison pill” which of Carriers and Shippers. Although it contains
will allow implementation of the Hamburg Rules some provisions which seem to be inconsistent
once a majority of trading partners do likewise. with the Chinese Maritime Code, and also as the
Provision is made for regular reviews to assess Contract Law does not contain any provision
the situation. clarifying the relationship between the Contract
Law and the Maritime Code, Chinese
CHILE: Having enacted Hamburg Rules based
Jurisprudence dictates that, if the Maritime
legislation ahead of the implementation of this
Code contains specific provisions, it shall prevail
Convention, Chile had a change of heart and
over the general provisions in the Contract Law.
actively considered denunciation. After
consideration they decided such action was a After having been implemented for more than
little premature and decided upon a “wait and nine years and prompted by a need for
see” approach. amendment or revision, the Chinese Ministry of
Communications has started a project to review
CHINA: China has introduced an extensive
the Maritime Code and has invited proposals for
Maritime Code covering many aspects of
amendments. In this regard, China has been
maritime law. It came into force on 1st July 1993
actively involved in the CMI/UNCITRAL
and covers, inter alia:
proposed Transport Law review, as they believe
Contracts of Carriage of Goods by Sea. it may be of assistance to their revision of their
Contracts of Carriage of Passengers by Sea. Maritime Code.
Contracts of Hiring Ships.
CROATIA: Croatia acceded to the Hague Visby
Contracts of Towage.
Rules on 28th October 1998 and they became
Collisions of Ships.
effective there on 28th January 1999.
General Average.
Limitation of Liability for Maritime Claims. CZECH REPUBLIC: The Czech Republic, on
Contracts of Marine Insurance. the division of Czechoslovakia, confirmed
Time Limits. succession to the Hamburg Rules on 2nd June
Legal Relationships with Foreign Parties. 1993.

Although China has never ratified international EGYPT: Although a signatory of the Hamburg
conventions, many of these codes are based on Rules, Egypt announced its intention to make
international conventions, thereby creating a use of Article 31 (4) of the Hamburg Rules to
degree of consistency with most trading partners. defer denunciation of the Hague Visby Rules for
The Code relating to the Contracts of Carriage of 5 years so that, so far as Egypt is concerned,
Goods by Sea also covers Combined Transport. It implementation of the Hamburg Rules was
is broadly based on the Hague Visby Rules but deferred until 1st November 1998. In the
has grafted on some Hamburg Rules provisions meantime Egypt remained a Hague Visby
relating to delay, details in the Bill and notice of signatory and applied those Rules until that
claims etc. date. Now that date has passed Egypt is
officially a Hamburg adherant but its position is
a little unclear.

77
GEORGIA: Georgia is a party to the Hague it to make it more internationally acceptable, a
Visby Rules and also the Hamburg Rules (which process much hindered by the present political
complicates matters somewhat!). The Merchant instability and bureaucracy indigenous in the
Shipping Code 1997 of Georgia provides that a area. Hence the confusion, which is not aided by
Bill of Lading shall contain stipulations that the the backlog in Indian courts, where a case takes
carriage is governed either by the terms of the over ten years to come to trial.
Hague-Visby Rules or the Hamburg Rules.
JAPAN: Japan, having ratified the Hague Visby
GERMANY: As the host nation for the Hamburg SDR Protocol, brought legislation applying the
Rules it would obviously be too politically Hague Visby Rules into effect on 1st June 1993.
embarrassing for Germany to ratify Hague Visby The Japanese Act incorporates liability for delay.
and ignore Hamburg. This small problem has
KOREA: South Korea introduced a Revised
been circumvented by amendment of the German
Commercial Code (RCC) in 1992 to replace its
Commercial Code to apply the Hague Visby
1962 version. In relation to the carriage of goods
Rules without ratifying or acceding to them and,
by sea, the Code is largely based upon the Hague
as a major trading nation, Germany is generally
Visby Rules, excepting that there is no weight
regarded as one of the most staunchly pro Hague
based alternative to the package limitation of
Visby nations.
500 SDRs per package or shipping unit. The
(See Part 2 Section 5B for details of recent Code also gives effect to most of the 1976
changes to German Law relating to transport Limitation of Liability for Maritime Claims
other than maritime carriage.) (LLMC) Convention.

GREECE: Greece, having acceded to the Hague LEBANON: Lebanon applies the Hamburg
Visby Rules and its SDR Protocol, brought these Rules to contracts of carriage by sea concluded
Rules into effect on 23rd June 1993. after the 1st November 1992. Freight forwarding
is now governed by Ministerial Decision No. 135
INDIA: The situation here is somewhat obscure
of 1996 as amended by Decision No. 136 of 2000.
and confused. The Multimodal Transportation of
Additionally a new Customs law was issued on
Goods Ordinance (MTOG) was rushed through
the 15th December 2000 which provides, inter
by Presidential degree in October 1992 whilst
alia, that Carriers liability for Customs
Parliament was in recess, ostensibly to promote
violations can now, in principle, be exempted if
Combined Transport in India. It sought to
the Carrier proves that:
regulate all operators and enforce a totally
unacceptable regime upon Combined Transport (a) the Customs violation was committed
Operators. Attached to the Ordinance, as Part II without his knowledge; and
of the Schedules thereto, was a provision which (b) he took the necessary measures to avoid the
effectively replaced the Indian Carriage of Goods occurrence of the violation; and
by Sea Act 1925 (Hague Rules) with the Hague
(c) he concluded the contract of carriage as per
Visby Rules but for Port-to-Port shipping only.
the normal practice of the trade.
Were the entire Ordinance to be enforced, far
from promoting Combined Transport in India, it MEXICO: Mexico enacted a new maritime law
would kill it stone dead, as Carriers would offer on 5th January 1994 which incorporated several
Port to Port contracts with agency only international conventions.
provisions on land as the only way to operate on 1. Cargo liability - based on Hague Visby Rules.
acceptable contractual terms. That is to say one 2. General Average - York Antwerp Rules.
applying Hague Visby at sea and contractual 3. Collision - 1972 Convention.
terms on land and not the obnoxious MTOG 4. Salvage - 1989 Convention.
Ordinance throughout. 5. Pollution - based on CLC/Fund Conventions.
6. Passengers - 1976 LLMC.
Realising their mistake the powers that be in
India are quietly soft pedalling enforcement of NEW ZEALAND: New Zealand enacted their
this piece of legislation, whilst they try to revise Maritime Transport Act in 1995 designed to

78
update that country's maritime laws which relating to:
includes amendments as follows:- Hague Visby
1. Period of Cover (Hamburg approach).
Rules plus its SDR Protocol to replace Hague
2. Applicable to all contracts of carriage by
Rules with no Hamburg “poison pill”.
sea except Charter Parties.
A new Bill of Lading Act along the lines of the 3. Delay.
UK COGSA 1992 (see UK Section for details). 4. Live Animals and Deck Cargo.
5. The “Menu” of exclusions from liability
1989 Salvage Convention.
is dropped in favour of the
Extensive review of marine pollution laws.
UNCTAD/ICC Rules approach.
The Hague Visby Rules accordingly came into 6. Scope of Application (Hamburg
operation in New Zealand on 20th March 1995. approach).

ROMANIA: Romania applies the Hamburg SLOVAKIA: Slovakia, on the division of

Rules and denounced the Hague Rules on 10th Czechoslovakia, confirmed succession to the
January 2002. Hamburg Rules on 28th May 1993.

RUSSIA: The Russian Federation applies their SOUTH AFRICA: Like other ex-Commonwealth
Merchant Shipping Code 1999, which generally countries, whose law is based on the English
mirrors the Hague-Visby Rules, to govern model, South Africa also has need to amend its
Carriers’ liabilities for goods. Bill of Lading Act to avoid conflict with
legislation relating to the sale of goods. This
SAUDI ARABIA: The law in Saudi comprises takes the form of a Sea Transport Documents
the Sharia (law based on the Koran which is not Act which has been signed into law but is
really designed for commercial matters) presently awaiting publication of its
supplemented by regulations governing commencement date.
commercial matters issued by the King. The
Commercial Court Law of 1931 includes sections U.A.E.: Like Saudi, the law in the U.A.E. is
on carriage of goods by sea but these are out of Sharia based but there is a substantial set of
date and not always followed. The Commercial Maritime Codes which, inter alia, incorporate the
Court is the Board of Grievances. Judges are Hague Visby Rules.
religious appointees with little or no commercial
However the interpretation by the Courts of
experience. Parties to an action may assist a
these Codes is not always in line with Western
judge by suggesting a suitably qualified and
thinking, to some extent due to Sharian
impartial expert to advise the Court.
influence, and this creates uncertainty. A 3 tier
SCANDINAVIA: The Scandinavian countries system of Courts operates: Court of First
(Denmark, Norway, Sweden and Finland) Instance, Court of Appeal and Court of
subscribe to a common “Nordic Maritime Code” Cassation. Judges are usually lawyers but are
to govern their respective approaches to Carriers' seldom familiar with the intricacies of
liabilities and a new code came into operation on international trade, containerisation etc.
1st October 1994. Whilst the Scandinavian
UKRAINE: The Ukraine is not a party to any of
countries claim to remain Hague Visby
the relevant maritime conventions. However, in
adherants, they have leaned towards Hamburg
1995 a new Merchant Shipping Code was
Rules by adopting Hamburg style provisions in
adopted which contains provisions regulating the
areas where the Hague Visby Rules are silent
terms of a contract for the carriage of goods by
and thus where Carriers previously had freedom
sea, Carriers’ civil liabilities and civil oil
of contract. The effect is to create something akin
pollution liability. The Code's provisions
to the UNCTAD/ICC Rules (see Part 2 Section
regulating carriage of goods by sea and Carriers’
3D(iii)). Amongst the variations from the
liability roughly mirrors the Hague-Visby Rules.
situation that previously applied with
unamended Hague Visby Rules are provisions

79
UNITED KINGDOM: The Carriage of Goods by the 1910 Collision Convention and the 1976
Sea Act (COGSA) 1992 came into effect on 16th LLMC has caused many problems). However,
September 1992 to replace the 1855 Bill of just occasionally, this approach may offer a lead
Lading Act. It overcame the impasse identified in to resolve problems elsewhere. Such an occasion
the “Aramis” and “Delfini” cases regarding right may well arise as a result of the present review
to sue because of conflict between the Bill of by U.S. Congress of their COGSA.
Lading Act and the Sale of Goods Act. Care must
At their May 1996 A.G.M. the U.S. M.L.A.
be taken to avoid confusing COGSA 1992 (new
(Maritime Law Association) approved a
Bill of Lading Act) with COGSA 1971 (Hague
suggested draft designed to replace the present
Visby Rules). COGSA 1992 also gives recognition
U.S. COGSA 1936.
to Waybills in English legislation for the first
time. The UK Sale and Supply of Goods The draft was very skilfully constructed to
(Amendment) Act 1995 inserted Section 20A into include provisions attractive to all parties
the Sale of Goods Act 1979 to deal with the concerned (Merchants, Carriers, Insurers etc.)
problem in the Sale of Goods Act and permit the and was offered as a package only so as to entice
passing of property in sales of part of a bulk. parties to consider accepting points that they did
not favour in order to secure the benefit of points
The Contracts (Rights of Third Parties) Act came
that they did. Most importantly it followed the
into effect in English law on 11th November
present Act, which is based on the Hague Rules,
1999. This Act repeals the age old principle of
so that the all important “Menu” approach of the
English law that only a person who is a party to
Hague Rules to exclusions is preserved.
a contract can sue on it (privity of contract).
Under the Act a party may enforce a term in a The main changes to the 1936 Act (after several
contract to which he is not a signatory as if he amendments and redraftings to accommodate
were a party to that contract, if: certain parties' requirements) are as follows:

# the contract expressly provides that he may; 1. Period of application will be door-to-door,
or that is to say the Act will be a Combined
# the contract term purports to confer a benefit Transport piece of legislation.
on him unless, on the proper construction of
the contract, it appears that the parties did 2. The Act will apply to all contracts of
not intend the term to be enforceable by the carriage, other than Charter Parties, so
third party. Waybills will come within the control of the
Act.
Whilst the Act, inter alia, excludes contracts for
the carriage of goods by sea and contracts for the 3. The Act will allow all parties involved to
carriage of goods by road, rail or air which are claim the benefit of the Act so that all
subject to the rules of the appropriate servants, agents and sub-contractors will be
international transport convention (e.g. CMR protected from tortious action outside of the
CIM Warsaw), it does allow a third party to rely contract of carriage.
upon a term in any contract for the carriage of
4. Live animals remain outside the Act but
goods by sea, road, rail or air which confers an
deck cargo (whether or not the Bill is
exclusion or limitation of liability. Thus it would
claused) does not.
seem that the Circular Indemnity and Himalaya
Clauses in Carriers' Bills of Lading are unlikely 5. Provision is made for EDI to replace paper
to be challenged again in the English courts. contracts of carriage.

U.S.: The U.S. has a long history of NOT signing 6. The “nautical fault” exception is lost if the
international maritime conventions and instead claimant can prove negligence.
going its own way. As maritime carriage is
7. The Fire exclusion is qualified to restrict the
largely international whilst law is national, this
list of parties who may benefit from it.
inevitably creates conflict and undesirable forum
shopping (for example the U.S. non adoption of

80
8. The concept of fundamental breach of and produce a revised Act, based on the current
contract in relation to deviation is proposals, into U.S. law.
abandoned and the Carrier is liable subject
Apart from its COGSA 1936 law, there are
to the terms of the Act and his contract of
several U.S. laws and regulations relevant to the
carriage, “unless done with intent to cause
carriage of goods by sea (a number of them
loss or damage or recklessly and with
prompted by the 11th September 2001
knowledge that loss and damage would
catastrophe in New York) of which Merchants
probably result”. Hence limits as provided in
should be aware:-
the Act are virtually unbreakable - a great
advantage in the drive towards Harter Act (U.S. Code Title 46
predictability. Sections 190-196)
This is probably the first piece of national
9. The limitation of liability is the Hague Visby
legislation covering Carriers' liabilities for the
package/weight alternative.
carriage of goods by sea and was enacted in the
10. The Pomerene Act's application is extended U.S. in July 1893. It rendered unlawful the
to include imports as well as exports thereby practice of Carriers, which was prevalent at that
becoming omnipotent. time, of effecting carriage under extremely
onerous contracts, under which the Carrier
11. Foreign Jurisdiction clauses are not binding.
accepted liability for virtually nothing. In this
As reference to the above list demonstrates, the context it was the forerunner of the Hague Rules
proposed changes are wide reaching and, of 1924, the terms of which closely followed the
particularly in the light of the present status quo approach of the Harter Act but in greater detail.
in U.S. courts, attractive in some areas to all The main difference is that, whereas the Harter
parties. Act covers from receipt of the goods by the
Carrier until delivery to the Consignee (rather
The U.S. proposed revisions offer an acceptable like the Hamburg Rules), the Hague Rules cover
compromise between the Hague Visby and from loading to discharge only and leave the
Hamburg Rules and the present CMI draft owes period prior to loading and after discharge to the
much to them. discretion of the Carrier. When the U.S. enacted
the Hague Rules as its Carriage of Goods by Sea
The original MLA draft was substantially
Act 1936, much of the Harter Act was
redrafted by Senate draftsmen, who created a
superseded, but it still remained effective to
much clearer draft without in any way amending
cover the periods prior to loading and after
the thrust of the MLA draft. Further alterations
discharge. If the new COGSA is enacted the
to meet the objection of some U.S. domestic
Harter Act will be almost entirely superseded, as
carriers (railways, towage, etc) and some
the only thing that would be left for it to regulate
international bodies (who principally objected to
would be the carriage of live animals.
the foreign jurisdiction clause provisions but also
to the extension from a port-to-port Act into one Pomerene Act (U.S. Code Title 49
governing combined transport) have been Section 81-124)
effected and the present draft is 24th September This is more correctly known as the Federal Bills
1999. This draft is ready for implementation but of Lading Act 1916 and provides the law in the
presentation to the Senate has been deferred as U. S. in relation to Bills of Lading in Interstate
the U.S. is involved in and is supporting the and Foreign Commerce. It is renowned for
CMI/UNCITRAL Draft Transport Law creating that peculiarly American phenomenon,
Document. If that new regime does not come to found nowhere else in the world: the Straight
fruition within a reasonable period (and as it Bill of Lading which does not need to be
appears that negotiations are likely to become surrendered to secure delivery, but which still
bogged down by political wrangling, this looks allows the Consignee to enforce the rights of the
like being the case), it is most likely that the Merchant against the Carrier, thereby creating
U.S. will reintroduce their COGSA amendment the conflict of law that is explained in more

81
detail in Section 6 - Straight Bills. It presently to contain” in Cargo Manifests may ultimately
applies to U.S. exports and Interstate traffic only have a knock-on effect for Bills of Lading. These
and is not applicable to U.S. imports. changes stem from the Port Terrorism
Prevention Act of 2002 (Senate bill 2426) and
In July 1994 an updated draft of the Pomerene
also prohibits descriptions of goods such as
Act came into force and if the new COGSA is
“Freight All Kinds” and “Hazardous not
enacted the scope of the Act will be extended to
otherwise specified”. In advance of the passing of
cover imports as well.
this Bill U.S. Customs has been enforcing the
Intermodal Safe Container Act prohibition against the use of the words “said to
On 9th April 1997 this Act was brought into contain”S in Cargo Declarations contained in the
operation to control the weight of containers on Code of Federal Regulations Section 4.7(a).
U.S. Highways and prevent overweight
As the P&O Nedlloyd Bill of Lading
containers being given to unsuspecting U.S.
Incorporation Clause is drafted so that the Cargo
Hauliers (Truckers), who were unaware of the
Description shown on the face of the Bill is in the
weight of their load..
nature of “said to contain” for an FCL Container
Imports into U.S. from China with Solid but not for an LCL Container, there is no need
Wood Packing for the words “said to contain” to be used in the
On 17th December 1998 the U.S. Department of Cargo Description in order to protect the Carrier.
Agriculture placed a ban on the importation of This means that, if it is not shown in the Bill of
goods from China containing Solid Wood Lading Cargo Description, it does not appear in
Packing, unless a Chinese Government the Cargo Manifest, so there should be no
Certificate is produced certifying that said problem arising from this matter with P&O
packing has been inspected/treated to prevent Nedlloyd Bills of Lading.
infestation by the long-horned beetle, which is
Post 11th September 2001 Security
indigenous in China but not the U.S., where it
Measures
has no natural predators and, once imported into
This Section would not be complete without
the U.S., is ravaging hardwood forests there.
mentioning a number of the other security
Consignments with no Solid Wood Packing have
measures which have been introduced by the US
to have a Declaration from the Shipper to that
after 11th September 2001. These include: -
effect. The European Community, Canada and
Australia have adopted similar measures. The Custom-Trade Partnership against
Terrorism(C-TPAT), which is a programme
China is taking “tit-for-tat” retaliatory action
initiated by the U.S. Customs in which
against the U.S. and Japan. According to these
Ocean Carriers and other parties involved in
regulations, all solid wood packaging material,
the importation of goods into the U.S. can
bracing and dunnage made from coniferous trees
voluntarily participate. By establishing a
must be heat treated and certified in order to
security programme that meets the
prevent further introduction of the pine wood
guidelines set out by U.S. Customs. Carriers
nematode to China.
who participate are designated as low risk.
Said to Contain Consequently their goods will be processed
Whilst there is currently proposed legislation through Customs at a faster rate than those
before Congress which would specifically ban the of Carriers who do not participate.
phrase “said to contain” on a Cargo Declaration, The Port and Maritime Security Act of
reports indicate that there is no existing or 2001(Senate bill 1214/Maritime
proposed legislation which prohibits the Carrier Transportation Anti-Terrorism Act 2002-
from using that term in Bills of Lading. The House Resolution 3983). Both of these pieces
Pomerene Act mentioned above specifically of legislation require vessels to produce anti-
sanctions the use of the phrase “said to contain” terrorism plans similar to the vessel
in Bills of Lading. Although this is a developing response plans required by 0PA 90 in respect
issue, Customs refusal to accept the phrase “said of oil pollution.

82
 Amendment to Customs Regulations-the because the Shipper had requested the use of the
amendment to these regulations requires Sea Waybill and was a frequent customer
Carriers to provide Cargo Manifests 24 hours familiar with the Carrier’s standard Bill of
prior to the loading of goods at foreign ports Lading form.
destined for the U.S.. There is also a
Foreign Forum Selection Clauses
Container Security Initiative (CSI), which is
Since the 1995 “Sky Reefer” decision, there have
an agreement between the U.S. Customs and
been enough decisions on various foreign forum
foreign governments designed to identify and
selection clauses to provide relatively clear
monitor high risk goods entering the U.S..
guidelines on which clauses will and will not be
The U.S. Customs have positioned inspectors
enforced. In the recent “Jockey International
at strategic ports throughout the world to
Incorporated v m.v. Leverkusen Express” case,
examine any goods (in conjunction with local
the court made it clear that a forum selection
Customs authorities) which they consider
clause is effective if the language delineating the
require inspection and which are identified
choice of forum is mandatory rather than
by the 24 hour rule or the CSI.
permissive and makes the chosen jurisdiction
Advance Notice of Arrival- The Coastguard
exclusive. The court also made clear the
has issued a rule requiring all foreign vessels
requirements which must be met in order to
to provide a 96 hour advance notice of
invalidate or avoid a foreign forum selection
arrival. The notice must include substantial
clause. A party seeking to invalidate a foreign
amounts of information and, if dangerous
forum selection clause must show that:-
goods are being carried, the notice must
include details regarding the type and 1. The clause is the result of fraud or
stowage position for each item of dangerous overreaching.
goods. 2. The party will be deprived of its day in Court
as a result of the great inconvenience or
Electronic Bills of Lading
unfairness of the selected forum.
The Electronic Signatures in Global and
3. The party may be deprived of a remedy due
National Commerce Act 2000 effectively
to a fundamental unfairness of the chosen
validates contracts and signatures in electronic
law.
form and provides that they cannot be denied
4. The clause contravenes a strong public policy
legal effect solely because they are in electronic
of the foreign state.
format. In a recent Ninth Circuit Court of Appeal
decision, the court confirmed that the terms on The P&O Nedlloyd Bill of Lading avoids these
the reverse of the Carrier’s printed Bill of Lading problems by allowing the claimant a choice of
applied to an electronically issued Express Sea jurisdiction in respect of U.S. consignments
Waybill, even though no printed copy was ever between English jurisdiction and U.S.
issued to the Shipper. This was, however, jurisdiction.

83
Part 2
Section 5: Standard Terms and
Conditions for National Carriage
in Europe
These terms apply if P&O Nedlloyd acts as agent (ii) such advice or claim was given or made
only to arrange inland carriage in Europe. If the within a reasonable time,
Bill of Lading is a Combined Transport one to
the Carrier shall not have the benefit of
the Place of Delivery, the Customer's recourse is
the exclusion of liability afforded by this
determined by the Bill of Lading (See Part 2
Condition.
Section 2. B) and not these conditions, which are
usually inferior to P&O Nedlloyd's Bill of Lading Accordingly: All Consignees who receive
terms and conditions. goods in a discrepant condition are urged to
contact the P&O Nedlloyd's office with whom
A UNITED KINGDOM
they arranged delivery immediately and
follow it up with a telexed or written notice
(i) Road Haulage Association (RHA)
prior to the submission of the detailed claim.
Conditions
These terms are commonly applied to most (ii) Freightliners
national haulage within the United The standard terms of Freightliners service
Kingdom. Liability is limited to £1,300 per are very similar to those of the RHA but
tonne. The latest version is the 1998 draft. apply a limit of £1,500 per tonne.

One of the main problems with these (iii)Containerbase Conditions

conditions is the relatively short time limits The standard terms applied to users of
as follows: Containerbases, which provide for a limit of
£1,300 per tonne.
The Carrier shall not be liable for:
(iv) British International Freight
(a) damage to the whole or any part of the
Association (BIFA) Standard Trading
Consignment, or physical loss,
Conditions (2000)
misdelivery or nondelivery of part of the
The standard terms of BIFA members for
Consignment unless advised thereof in
application to forwarding and allied
writing within seven days, and the claim
activities. Unless the customer specifies for
is made in writing within fourteen days,
the contractor to act as a principal when
after the termination of transit;
engaging him, the contractor has the option
(b) any other loss unless advised thereof in to be agent or Principal. If he is a Principal
writing within twenty-eight days, and his limit of liability is 2 SDRs per kilo for
the claim is made in writing within loss or damage and 2 SDRs per kilo up to a
forty-two days, after the commencement maximum of 75,000 SDRs for other claims.
of transit.
The BIFA 2000 Conditions are clearer on the
Provided that if the Customer proves that, liability of the Agent for failing to place
insurance, if instructed to do so.
(i) it was not reasonably possible for the
Customer to advise the Carrier or make
a claim in writing within the time limit
applicable, and
84
(v). United Kingdom Warehousing available and in regular use. The following gives
Association (UKWA)-Conditions of brief details of the standard national conditions
Contract 2002 for road haulage in use in the following
The main provisions are as follows:- countries.

Liability is only accepted where the loss is Austria

directly caused by neglect or wilful act or CMR is applied to national road transport.
default.
Belgium
Liability is generally limited to £100 per No formal limit but CMR usually applied
tonne, although limits may be increased by contractually.
the Customer giving at least seven days'
Denmark
notice before the date upon which the
As for Belgium.
increased limit is to be operative. The notice
must state the increased limit and the Finland
nature and maximum value of goods CMR as compulsory law.
(including duty and taxes). The Warehouse
Keeper must accept the increased limit, France
subject to payment by the Customer within Commercial Code Article 103 et seq is
seven days of the cost to the Warehouse compulsory law. This offers a complicated
Keeper of insuring against his increased arrangement for limitation dependent upon the
liability under the increased limit. For the nature of the goods and weight of the
Warehouse Keeper to be liable, he must consignment. Limits vary from FF20 per kilo
receive written notice of the claim from a (tank transport) to FF90 per kilo (other goods)
Customer within 21 days (or 7 days in the with maximums per load of FF2,000 to
case of sub-contracted carriage). This period FF350,000.
starts to run from the date the claim came to
Germany
the Customer's knowledge or the date that
On 1st July 1998 new domestic transport law
the goods were delivered, whichever is later.
(Transportrechtsreformgesetz) came into effect in
The time bar for legal proceedings is nine
Germany to simplify and unify Germany's
months, starting from the date of the event
various transport laws. The new law abolishes
giving rise to the claim. These legal
all specific rules outside the Commercial Code
proceedings must be issued and served. The
(Handelgesetzbuch) and applies to all contracts
conditions also make it clear that they apply
for the internal carriage of goods except
to loading and unloading as well as the
maritime carriage (although inland waterways
transfer of goods. No loss of profit or other
are affected). The new law is modelled on the
indirect or consequential loss is payable in
CMR and, in its unamended form, applies a limit
any circumstances.
of 8.33 SDRs per kilo with delay at 3 x freight. In
individual contracts parties may agree to vary or
B CONTINENT OF EUROPE ROAD even exclude the law but in standard terms of
HAULAGE (TRUCKING) business this is not permitted, except that
Because of the relative frequency of international revised limits may be applied of not less than
road transport compared with national road two and not more than 40 SDRs per kilo. The
transport on the Continent, hauliers/truckers in law applies to forwarding and warehousing as
many countries there tend to operate the same well as carriage.
CMR conditions for national road haulage as
Italy
they do for international road haulage. Thus one
No overall compulsory law but exception clauses
commonly finds CMR applied to national road
must not contravene the Civil Code. Limits of
haulage in Continental countries even though
liability are controlled by law number 450.
alternative national standard conditions are

85
Netherlands Portugal
Netherlands Civil Code Book 8 Title 13 applying Portuguese Commercial Code applicable.
a limitation of DFl 7.50 per kilo is applicable but
Spain
the Algemene Vervoers Condities (AVC) - the
Spanish Commercial Code applicable.
General Conditions of the Society of
Transporters and Shippers (which applies a Sweden
similar limit) is much used. CMR is also used by CMR terms applied but limitation is 150 Sw Cr
contractual application, applying a limit of 8.33 per kilo.
SDRs per kilo.
Switzerland
Norway Schweizerisches Obigaflonenrecht applicable
CMR terms applied but limitation is 17 SDRs with no limitation.
per kilo.

Poland
Civil Code - The Law on the Road Carriage and
Forwarding of Goods 1961 is compulsorily
applicable.

86
Part 2
Section 6: Merchants’ Indemnities

These fall into two categories: indemnity is common to conventional Port-

to-Port Bills of Lading and Combined
A Indemnities in Bills of Lading, and
Transport Documents, so that there is no
B Specific Indemnities outside the Bill of difference in this regard as between break
Lading contract. bulk and container shipping (see Clause 19
(3)).

A INDEMNITIES IN BILLS OF LADING (ii) Secondly, FCL Shippers of all goods

The holder of the Bill of Lading, whether the indemnify the Carrier for all loss, damage,
Shipper, the Consignee, or an endorsee, enjoys liability or expense incurred as a result of
the benefits conferred by its conditions, but he bad packing, as a result of goods being put
has also to accept its burdens, amongst which into unsuitable containers or as a result of
are certain indemnities given to the Carrier. The unsuitable goods being put into containers.
purpose of this section is to draw attention to This indemnity not only indemnifies the
those indemnities given by the Merchant to the Carrier for damage to the container, but also
Carrier. covers all loss/damage, including personal
accident, and, therefore, could extend to
There is a popular misconception that, once a vessel damage, damage to hauliers' vehicles,
Merchant has passed a Bill of Lading on to etc., including terminal installations in the
another party, he is finished with that contract country of import and those in the country of
and cannot subsequently become embroiled in export as well as personal injury at any
any indemnity incorporated in that contract. By point which is caused by bad packing. Whilst
parting with the Bill of Lading the Merchant this is a specific clause in Combined
may have lost control of the goods (the Bill of Transport Documents, which does not appear
Lading as a Document of Title) but he remains a in Conventional Bills of Lading, it does not
party to the contract of carriage until it is create any more onerous conditions for the
completed and can be called upon to honour any use of containers, as compared with break
indemnity by the Merchant to the Carrier bulk goods methods. This is because the
incorporated into that contract, whether due to clause effectively states the position which
negligence on his part, on the part of another would apply under English Common Law in
party coming within the definition of Merchant the absence of a clause. The clause merely
or in the absence of negligence on anyone's part, draws the Customer's attention to the
if the indemnity is so worded. liability which he would incur in any event
and which is a very necessary incentive for
The indemnities to which Merchants are exposed
those undertaking the packing of a
include the following:
container, where negligence could have
(i) Firstly, and probably of major importance, is serious implications. Furthermore, the
the indemnity which Merchants of dangerous incentive provided by this indemnity is in
goods, whether FCL or LCL packed, give line with duties imposed by such regulations
against the consequences of poor packing, as the Health and Safety at Work Acts (see
misdescription, misdeclaration, mis-marking Clause 8).
etc. of any dangerous goods shipped. This

87
(iii) Thirdly, all Shippers, whether FCL or LCL, Other minor indemnities include:
warrant the accuracy of details of goods
(vi) an indemnity to the Carrier for extra charges
which they supply to the Carrier and
incurred during carriage (“sue and labour”
indemnify him against the consequences of
charges recoverable from Cargo Insurers,
misdeclaration. This is necessary, as the
subject to the terms of the policy) which
Carrier cannot be expected to check the
mitigate loss (see Clause 10).
contents of the packages tendered to him for
carriage to discover any dangerous (vii)an indemnity for any extra charges incurred
properties of the goods packed therein, or in connection with the carriage of live
indeed whether or not the goods are animals (see Clause 16).
deliberately misdescribed to avoid Custom
duty, quota restrictions or even to smuggle (viii)an indemnity against Letter of Credit,
drugs or other contraband. This indemnity is Invoice or Order Number details put in a Bill
also in line with the Common Law of Lading for Merchant's convenience being
obligations of a Shipper (see Clause 12 (2) regarded as “Ad Valorem” declarations (as is
and (3)). the practice in certain Arab countries (see
Clause 11 (3)).
(iv) Fourthly is the indemnity by which the
Merchant undertakes that no-one shall claim NOTE
against any servant, agent, sub-contractor or Items (i), (ii) and (iii) create liabilities upon the
co-charterer of the Carrier and indemnifies Merchant for which he should consider having
the Carrier against the consequences if third party liability insurance. Merchants are
anyone does so. This is known as the reminded of the potentiality of their goods to
“Circular Indemnity” and links up with cause damage at any time during the transit, so
similar clauses in the contracts between the that such cover needs to be worldwide.
Carrier and his agents, sub-contractors and Manufacturers are, no doubt, also aware of the
co-charterers to create a similar situation to upward trend in the number and size of product
that provided by the more familiar liability claims in many areas, which reflects an
Conventional Bill of Lading “Himalaya” increasingly litigiously minded approach to
clause. That is to say that Merchants are disputes.
restricted to claiming against the Carrier
Merchants are strongly advised not to
only under the terms of the Bill of Lading
operate without adequate liability
and cannot sue anyone else in tort outside
insurance – consult your insurers now.
this contract. It is an essential feature of the
Combined Transport operation, in which the We should be pleased to assist in this respect in
Carrier contracts with the Merchant as a any way. Please contact our Insurance and
Principal and not as an agent (see Clause 4 Claims Department
(2) and (3)).

(v) Fifthly is the indemnity by which the B SPECIFIC INDEMNITIES OUTSIDE THE BILL
Merchant undertakes that all claims made OF LADING CONTRACT
against the Carrier in connection with the (i) Indemnities for the Issuance of
carriage of the goods shall be made subject to Duplicate Bills of Lading and for
the terms and conditions of the Bill of Delivery of Cargo without Production of
Lading. This prevents tortious claims a Bill of Lading
against the Carrier by parties who acquire If Bills of Lading are lost, or do not arrive in
title to goods but who are not party to the time for Merchants to take delivery of the goods
Bill of Lading contract (e.g. holders of as they become available, the need for a Letter of
Consignee's delivery orders) (see Clause Indemnity to effect delivery of goods without
4(4)). production of Bill of Lading arises. (If documents
persistently arrive late alternative

88
documentation should be considered: see respects. This should be acceptable to a bona fide
`Waybills', Part 1 Section 9). Merchant as it precipitates no cost on him,
unlike the charge that he incurs for the limited
When approaching a Carrier with such a
Bank support.
request, a Merchant must bear in mind that he
is asking the Carrier to breach the contract of Remember – If the lost Bill of Lading
carriage deliberately, rather than accidentally, subsequently turns up, you can retrieve your
which will deprive the Carrier of the protection Letter of Indemnity upon surrendering one
of his insurance cover, because the Bill of Lading original to the Carrier.
is a document of title to the goods. That is to say
(ii) Indemnity for Clean Bill of Lading for
it is to the goods what a cheque is to money, and
whoever heard of a bank releasing money Discrepant Goods
without a properly authenticated cheque! Do not confuse indemnities for duplicate Bills or
delivery of goods without a Bill (which are
The Carrier accordingly has to insist upon:
perfectly valid and acceptable commercial
(a) a full unqualified indemnity in terms of his practices to overcome a commercial problem)
choosing; (a Carrier cannot undertake to vet with indemnities for clean Bills of Lading where
and negotiate the terms of such documents. goods received for carriage are acknowledged to
He is, after all, the party voluntarily putting be discrepant (which are not). The law regards
himself at risk and is accordingly entitled to the latter practice as collusion between Shipper
the indemnity wording of his choosing). and Carrier to defraud the Consignee, who is
entitled to rely upon the details shown on a Bill
(b) unlimited in amount; (as the Carrier may be of Lading, and refuses to enforce such
liable for consequential loss as well as the indemnities. Thus any Carrier, who agrees to
value of the goods the indemnity must be for accept such an indemnity, does so at his peril, as
an unlimited amount). it is not worth the paper on which it is written.
He must pay any claim arising as a result of the
(c) and unlimited in time; (the Bill of Lading
discrepancy in the goods and has no legal means
time limit may not be enforceable so that
of enforcing the indemnity against the Shipper.
indemnities must be valid for as long as the
Such indemnities are much frowned upon by
Carrier remains at risk – in the UK this is
Banks (for obvious reasons) and are widely
6 years under the Statute of Limitations).
regarded as unsound commercial practice.
(d) signed by the Merchant and supported by a Accordingly P&O Nedlloyd is unprepared to
reputable Bank. (In places (such as the U.S.) consider offering this facility.
where Banks can not or will not sign
Obviously the above remarks apply primarily to
indemnities, the same effect may be achieved
LCL goods as these are the only goods where the
using a Standby Letter of Credit.)
Carrier acknowledges tally and condition, as
Whereas some limitation is accepted, in relation with FCLs a tally of containers only is
to time and amount, on the Bank support (for acknowledged and there is usually no evidence of
commercial reasons), the indemnity from the the condition of the goods.
Merchant must remain unlimited in both

89
Part 2
Section 7: Cargo Claims

It is, of course, fully appreciated that a and relevant information. If loss or damage
Merchant's prime requirement is the prompt is extensive, telephone your local P&O
delivery of his goods in full, in an undamaged Nedlloyd office so that a prompt joint survey
condition and this is the aim of P&O Nedlloyd's can be arranged, if necessary. In any event,
Combined Transport Service. P&O Nedlloyd feels whatever the nature of the receipt given,
justified in claiming that its service has had ensure that notice of claim is given
considerable impact in reducing the loss and separately to the local P&O Nedlloyd office
damage factor in international carriage and, as promptly as possible but certainly within
indeed, its success is now readily acknowledged 3 days. Ideally give notice by telephone
by all parties concerned, including Cargo immediately, if loss or of loss damage is
Insurers. serious, following up with an emailed, faxed
or written notice to confirm.
Although much reduced, P&O Nedlloyd would
not attempt to suggest that claims have been 3. Always ensure that your Cargo Insurers are
entirely eliminated but this is the goal which kept fully informed of all losses, in case a full
P&O Nedlloyd sets itself in its continuing recovery cannot be made from P&O Nedlloyd
endeavour to improve the standard of its service. and it is necessary to invoke this cover.
This being the case, whilst losses still occur from Alternatively, claim against your Insurer,
time to time, the Merchant's secondary leaving him to recover from P&O Nedlloyd,
requirement has to be recognised: that where thereby reducing your administration costs
loss occurs he should be out of pocket for the and aggravation.
shortest possible time, and this is the aim of an
4. If surveys are arranged, always try to ensure
efficient claims service. In this endeavour there
that they are joint surveys, so that the
is much which the Merchant can do to help
extent of loss can be agreed by you, your
expedite the processing of claims and the
Insurers and P&O Nedlloyd's surveyor. This
following notes are offered as guidance to
avoids disputes as to quantum later.
Merchants.
5. If the goods are damaged, take the earliest
1. If you are an FCL Consignee, note the
steps, in conjunction with your Insurers, to
recommendations in Part 1 Section 8 and
mitigate loss (e.g. dry out wet damaged
Part 2 Section 8 of this Guide: (Consignee's
goods to prevent rotting, mildew, etc.).
Checklist & Security Seals) and make sure
Remember that it is your duty to accept
that you, or your accredited representative,
goods (even though they may be damaged)
remove the seal and verify its condition
and mitigate loss. Failure to do so will affect
beforehand, noting any discrepancy on the
your recourse to the Carrier.
receipt and retaining it to be presented with
the claim, in the event of it not being intact 6. Assess your loss as quickly as possible,
and loss having occurred. commensurate with mitigating it so as to
reduce loss to a minimum.
2. Whether you are an FCL or LCL Consignee,
make sure that the receipt given on 7. Send your claim, together with full
acceptance is accurate and contains complete documentation, to the local P&O Nedlloyd

90
 office with whom you arranged delivery.
Remember, the more clearly you present
your claim, the faster it will be processed, as
time will not be wasted reverting to you for
unprovided details and documents. As a
general guide the documents listed below
should normally be presented with any
claim.

Documentation Information
For For
Shortage/ Damage
Pilferage Claims
Claims

A. Your invoice showing X X

(a) Vessel's name
(b) Voyage number or
date of delivery
(c) Bill of Lading No.
(d) Container No.
(e) Description of Goods
(f) Full details and
calculations

B. Shipper's Invoice and X X

Packing List

C. Account Sale (Salvage) - X

or Invoice for
reconditioning charges

D. Supporting Invoices for - X

Extra Charges Incurred

E. Copy of Bill of Lading X X

(Desirable but not
essential)

91
Part 2
Section 8: Security Seals

Seals are an important aspect of security in is committed to using only a high security bolt
container transportation and much research has seal which is graded as the highest category
been undertaken in attempts to design a (Group 1) by the UK Customs Seal Testing
“foolproof” seal, which might reasonably be Authority.
described as one that sits up and shouts “I've
CARE! CAUTION!
been got at” as soon as anyone tampers with it!
However technically good the seal, it can only It is part of the security feature of this seal that
ever be a part of the Carrier's security system the plastic coating to the steel pin shatters when
and its effectiveness will be conditioned strongly interfered with to produce readily observed
by the system that governs its distribution, evidence of such interference. Because of this
application, recording and removal. feature we strongly recommend that safety
goggles or some other eye protection be worn by
A HARDWARE personnel using bolt cutters when removing this
P&O Nedlloyd maintains a close watch on all seal from a container.
developments in seal technology. P&O Nedlloyd

Raised
PONL logo
&
serial
number

Steel pin
coated in easily
shattered plastic

Coloured
inner & transparent
outer case.
Logo & serial number

92
B USE AND APPLICATION IT IS THE SHIPPER'S RESPONSIBILITY TO
With very few exceptions, outside of the U.S. the ENSURE THAT HE RECEIVES THE SEAL
P&O Nedlloyd bolt seal is used on all P&O FROM THE HAULIER, THAT IT IS A P&O
Nedlloyd export containers. In the U.S., because NEDLLOYD SEAL, AND THAT IT IS
of the vast distances often separating the PROPERLY AFFIXED TO THE CONTAINER.
Merchant from the Carrier, with the attendant
SHIPPERS SHOULD NOTE THAT IT IS A
logistical problems for seals, many Merchants
REQUIREMENT OF THE C-TPAT
have preferred to use their own seals, despite the
AGREEMENT THAT ALL MAJOR SHIPPING
fact that high quality seals are available from
LINES TRADING TO THE U.S. HAVE
P&O Nedlloyd. Merchants who prefer to use
AGREED WITH THE U.S. CUSTOMS
their own seals should ensure that they use only
AUTHORITIES THAT ALL CONTAINERS
seals of the highest integrity if they wish their
ARRIVING IN THE U.S. MUST HAVE HIGH
goods to remain inviolate during carriage and
SECURITY BOLT SEALS ATTACHED.
also wish to avoid delays by Customs authorities,
because the seal used is not approved. For these Under no circumstances should the Shipper
reasons P&O Nedlloyd strongly recommends use allow the haulier to retain the seal and affix it to
of their bolt seal, in preference to any other the container. Shippers should instruct their
model as it is the one which Customs authorities shed foreman, or some other reliable member of
are used to encountering on our containers and staff, to ensure that he receives the seal from the
causes no special attention by such authorities. driver and places it in position properly when
Unusual seals attract attention and enhance the loading is completed. The male portion of the
likelihood of selection for examination, with its seal should be placed on the inside bottom
attendant additional costs and risks of delay. locking bar of the right hand door and the female
portion pushed onto it. It should then be tested
with a tug to ensure that the mechanism of the
C SEALING: ADVICE AND PROCEDURES
seal is engaged. The seal number should then be
Merchants are requested to co-operate with P&O
entered on the shipping documentation.
Nedlloyd by ensuring that correct procedures are
followed in respect of seals on FCL containers. Therefore, in their own interest, FCL Shippers
An intact seal is evidence that a container has should ensure that:
not been opened in unauthorised circumstances.
! ALL THE DETAILS ON THE SHIPPING
If it is found to be broken or missing, the party
DOCUMENTATION, INCLUDING THE
responsible can be identified and held liable.
NUMBER OF THE SEAL, ARE
Of course it is sometimes necessary to open some COMPLETED BY YOU OR YOUR
containers short of destination, for Customs, Port AUTHORISED REPRESENTATIVE. DO
Health or some other authority, but this is NOT LEAVE AN UNAUTHORISED
always done under controlled circumstances and PERSON TO COMPLETE ANY OF THESE
the container resealed immediately afterwards DETAILS.
with a recorded seal, so that controlled security
! YOU HAVE SATISFIED YOURSELF THAT
is maintained.
THE SEAL TENDERED TO YOU IS A P&O
Attention to the undermentioned points by NEDLLOYD SEAL. ALL P&O NEDLLOYD
Exporters and Importers will assist P&O SEALS HAVE A BLUE BARREL AND AN
Nedlloyd to maintain its excellent security record ORANGE PIN, BOTH WITH A PONL
in respect of Merchants' goods. LOGO.

(i) EXPORTERS ! THE SEAL IS PLACED IN POSITION

Whenever a container is sent by P&O Nedlloyd PROPERLY BY A RELIABLE MEMBER OF
for packing by a Shipper, the haulier is issued YOUR STAFF AND TESTED WITH A TUG
with a P&O Nedlloyd seal for the Shipper to affix TO ENSURE THAT IT IS OPERATIVE.
to the container after it has been packed.

93
(ii) IMPORTERS accordingly and required to produce confirmation
P&O Nedlloyd hauliers are not authorised to that your instructions are followed.
remove seals in readiness for unpacking FCL
Therefore, the advice to FCL Importers is as
goods and Consignees should be most careful not
follows:
to request them to do so. It is the Consignee's
responsibility to ensure that the seal on the ! ALWAYS ENTER DETAILS OF SEAL
container which he receives is a P&O Nedlloyd NUMBER AND CONDITION IN THE
seal (BLUE & ORANGE WITH PONL LOGO) SPACE PROVIDED FOR THIS PURPOSE
and is intact upon arrival. (Non PONL Seals are ABOVE THE SIGNATURE AREA ON THE
used in some circumstances e.g. U.S. (see B RECEIPT COPY OF THE RELEASE NOTE
above) and NZ reefer (where NZ MAF seals are SET.
used). If in doubt consult your local P&O
! ENSURE THAT SEALS ARE CHECKED TO
Nedlloyd office.)
VERIFY CONDITION BEFORE REMOVAL,
If for any reason (e.g. Customs, Port Health, etc.) AND ARE REMOVED ONLY IN THE
it has been necessary to open a container short of PRESENCE OF PROPERLY AUTHORISED
destination, then another P&O Nedlloyd seal will EMPLOYEES.
be used to reseal.
! RETAIN SEAL UNTIL CONTAINER IS
If a substantial deficiency is discovered on DISCHARGED AND DISCARD ONLY
discharge, the P&O Nedlloyd Office should be WHEN SATISFIED THAT A FULL TALLY
advised immediately by telephone so that P&O HAS BEEN RECEIVED. IF THE SEAL HAS
Nedlloyd's security investigator can commence BEEN NOTED AS NOT INTACT PRIOR TO
his enquiries. REMOVAL, ADVISE P&O NEDLLOYD
OFFICE AND SEND SEAL TO THEM
Please ensure that you instruct your shed
WITH CLAIM. IF SEAL HAS NOT
foreman, or a responsible member of your staff,
PREVIOUSLY BEEN NOTED AS NOT
to check all seals before removal. You should also
INTACT AND THE OUTTURN IS
instruct them that the seal should be removed
INCOMPLETE, RE-EXAMINE TO VERIFY
only in their presence and they should retain it
CONDITION. IF THERE IS ANY DOUBT
until all the goods have been discharged and
SEND TO P&O NEDLLOYD OFFICE FOR
shown to be complete. If your goods are delivered
FURTHER INSPECTION.
to outside contractors, ensure they are instructed

KINDLY NOTE THAT THE P&O NEDLLOYD SEALS - DOCUMENT, AVILABLE FROM YOUR P&O
NEDLLOYD CONTACT, ALSO CONTAINS VALUABLE INFORMATION.

94
Part 2
Section 9: General Average &
Salvage
A GENERAL AVERAGE (x) and must succeed in saving some part of
General Average is an unwritten, non-statutory, the venture (otherwise nothing is left to
international maritime law which is universally contribute!)
recognised and applied. It has been practised
Each of these requirements is essential and, if
since time immemorial and was part of the
one is missing, the sacrifice or expense involved
Rhodian law. It is founded on the principle that
is not allowable in General Average. General
vessel and goods are parties to the same venture
Average is then the process by which those
and share exposure to the same perils, which
parties to the venture, whose interests have been
may require sacrifice or the incurring of
sacrificed or who have incurred extra expense,
extraordinary expense on the part of one for the
are proportionately recompensed by the
benefit of the whole venture.
contribution of those whose interests have been
A General Average may be either a sacrifice or saved.
an expenditure but in order to qualify as such it
Typical examples of General Average sacrifices
must satisfy ALL of the following criteria:
are jettison to lighten a grounded vessel in order
It must be: to float off and water damage to goods from
attempts to extinguish a fire. General Average
(i) extraordinary in nature (normal expense or expenses can be port of refuge expenses if a
damage is excluded) vessel puts into an unscheduled port for
essential repairs to complete the voyage.
(ii) voluntarily
When a General Average occurs, a specialist firm
(iii) deliberately (accidental damage is excluded
of Average Adjusters is appointed to assist with
that is Particular Average)
the initial problems and calculate the
(iv) and reasonably incurred contribution due from each interest. Vessel,
containers, goods, stores and bunkers will
(v) in time of general peril (the whole venture
contribute according to their salved value. The
(i.e. both vessel and goods) must be
first problem is to obtain security for General
threatened)
Average contribution from cargo interests,
(vi) for the common safety (expense aimed at because the adjustment may take over a year
saving only part of the venture is excluded) before it is issued. This is achieved by obtaining
the Merchant's signature on an Average Bond
(vii) of a maritime venture. (GA is peculiar to (the promise to pay), which is backed up by
maritime ventures only). either an Average Guarantee signed by a
reputable Underwriter, or by a cash deposit
(viii) The danger must be real (imagined danger
based on the contributing value estimated by the
doesn't qualify)
Average Adjuster.
(ix) and imminent (expenses foreseeing and
Although the principle of General Average is a
avoiding danger do not qualify (e.g.
generally accepted unwritten law, the practical
deviation to avoid storm.) as this is part of
application of it and the preparation of the
Carrier's normal expense/responsibility)
adjustment could give rise to disagreement in

95
the absence of written guide lines. In modern by their Underwriter or Banker. The following
times the most usually applied rules are those should be noted:
provided by the Comite Maritime International
! If you are not the ultimate Consignee,
(CMI), who publish rules governing General
despatch the papers without delay to the
Average known as the York-Antwerp Rules. Not
ultimate Consignee, notifying your local
being law, it is necessary to incorporate these
P&O Nedlloyd office accordingly.
Rules into contracts of carriage by specific
mention therein. The Rules are periodically ! If you are the receiver, complete the Average
reviewed and revised in the light of changing Bond, including the details relating to the
requirements and circumstances. The presently name and address of your Insurers and the
applicable version is the “York-Antwerp Rules policy number, and sign it.
1994”, and these would be applied on any P&O
Nedlloyd vessel in the event of General Average ! If you can get the Average Guarantee
but not necessarily if it arose on a vessel of a completed by your Underwriter/Banker or
third party, who might opt for alternative rules their agents without delay, do so and
which exist. The York-Antwerp Rules 1994 were despatch both forms to your local P&O
approved at the CMI meeting in Sydney in Nedlloyd office, with whom you are
October 1994 and were introduced in contracts arranging delivery, together with a copy of
after January 1995. the Sales Invoice for the goods.

In these days of high administration costs, the ! If there is some delay in getting the Average
expense of declaring General Average can be Guarantee signed, do not delay returning the
considerable and, with small General Averages Average Bond with a copy of the Sales
on vessels with a large number of contributory Invoice. Send it to your local P&O Nedlloyd
interests, it might be that the Average Adjusters office with a note indicating that the
fees (which are recoverable in the adjustment) Guarantee will follow, and ensure that the
could exceed the General Average Underwriter's signature to the Guarantee is
expense/sacrifice. To overcome this possibility obtained as soon as possible.
P&O Nedlloyd has an arrangement with its Hull
If you are uninsured and cannot obtain an
insurers whereby, in most circumstances, P&O
Underwriter's signature to the Guarantee Form,
Nedlloyd does not declare General Average if the
a Banker's signature is acceptable, or you can
sacrifice/expense is comparatively small in
make a cash deposit of the estimated amount
respect of incidents on board its own vessels or
required. You can do this if you are insured but
those of some of its trading partners with whom
are having difficulty in getting the Underwriter's
it has reciprocal arrangements.
signature to the Guarantee Form and wish to
Not only does this obviate the expense of small secure prompt delivery of the goods. Cash or
General Averages to Customers, but it also Banker's Guarantees can later be exchanged for
obviates the inconvenience which inevitably the Underwriter's Guarantee, when this is
follows, which is more important because the eventually secured.
expense is, of course, covered by the Merchant's
General Averages cause inconvenience to all and
cargo insurance.
P&O Nedlloyd wishes to assist its Customers to
In the event of it being necessary to declare reduce this inconvenience to a minimum.
General Average, however, there is much which Cooperation along the lines outlined above will
Consignees can do to assist the Carrier and assist P&O Nedlloyd to help Merchants in this
ensure that they receive their goods with respect. If any problems are encountered in the
minimum delay. Notices of the declaration of event of a declaration of General Average in the
General Average will be sent to all manifested obtaining of Underwriter's signature to an
Consignees (and often Shippers as well), together Average Guarantee, or any other matters, do not
with an Average Bond for signature and an hesitate to contact your local P&O Nedlloyd
Average Guarantee for completion office, who will be only too pleased to assist. Our

96
wish is to facilitate completion of the necessary and its cargo (or some part thereof). If LOF 2000
formalities as quickly as possible, so that prompt is used, security for Salvage (often in addition to
delivery of goods can be maintained. If you are separate security for General Average) must be
insured with CONCISE (see Part 1 Section 6) no lodged with Lloyd's in London by a London based
Average Guarantee is required, as this is part of acceptable security (usually a Cargo Insurer or
the CONCISE cover. So a CONCISE Customer his London agent) to secure release of the goods
will never experience delay in obtaining delivery unless the Salvor agrees otherwise. If more than
of his goods in the event of General Average. one Salvor is involved, separate security for each
Salvor may be necessary.

B SPECIAL CHARGES Salvage is not necessarily rendered only by other

Charges incurred solely for the benefit of vessels. For example, containers floating off a
individual consignments of goods as opposed to stricken vessel which come ashore may be salved
the whole venture (i.e. vessel and goods etc.) are by land-based salvors using land-based gear. In
Special Charges and are chargeable to the such a case the same principles apply but it is
consignments concerned and do not form part of unlikely that a LOF 2000 agreement will be
the General Average expenses. (Special Charges used.
are sometimes referred to as Particular
Salvage is assessed by an Arbitrator and
Charges).
adjusted by an Average Adjuster in the same
way as General Average.
C SALVAGE
CONCLUSION
In addition (or alternatively) to a vessel in
The essential difference between G.A. and
distress incurring extraordinary expense or
Salvage is that G.A. involves voluntary
making deliberate sacrifice in the interest of the
sacrifice or expenses BY A PARTY TO THE
whole venture and declaring General Average, it
VENTURE whereas Salvage involves
may occur that a vessel in distress receives
assistance by a THIRD PARTY
assistance from a third party to save the
INDEPENDENT OF CONTRACT to the
adventure. Another vessel may tow a powerless
venture in order to save it, (or part of it) in
vessel to a place of safety, assist in extinguishing
time of peril.
a fire or render some other service valuable to
the vessel and its cargo. In such circumstances Cargo Insurers continue their campaign to
that other vessel is entitled to claim Salvage abolish G.A. and allow loss or expense to “lie
from the vessel and its cargo, once it has where it falls”. Having survived for over 2,000
completed valuable service, and it is entitled to years, G.A. is unlikely to succumb overnight,
exercise a lien on vessel and cargo for its Salvage particularly in the face of opposition from
reward. Carriers and their liability insurers: the P&I
Clubs. The stage is set for a long war of attrition
Salvage is usually (but not always) undertaken
on this matter.
subject to LOF 2000 - Lloyd's Open Form of
Salvage Agreement 2000 which is a “No Cure - (For more details of LOF 2000 see Part 2 Section
No Pay” arrangement under which the Salvor 3A(v).)
only gets paid if he succeeds in saving the vessel

97
Part 3: Appendices
Appendix 1
P&O Nedlloyd - Standard Trading
Conditions 1997
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
3. Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4. P&O Nedlloyd's General Conditions . . . . . . . . . . . . . . . . . . . . . 100
A Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
B Deviation from Customers Instructions . . . . . . . . . . . . . . . . . . . . . . 100
C Customer fails to take Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
D Disposal of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
E Separate Service to Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
F Effecting Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
G Declarations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
H Special Delivery Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5. P&O Nedlloyd as a Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
A Liberties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
B Period of Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
C Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
6. P&O Nedlloyd as an Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
A Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
B Contracting Terms with 3rd Parties . . . . . . . . . . . . . . . . . . . . . . . . 104
C Evidence of Contract with 3rd Party . . . . . . . . . . . . . . . . . . . . . . . . 102
7. Customer's Warranties and Indemnities . . . . . . . . . . . . . . . . . 102
A Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
B Details of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
C Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
D Circular Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
E Acting on Customer's Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 103
F Duty, Fines etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
G General Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
H Information Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
I EDI Transmission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
A Time Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
B Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
C Limits of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
D Consequential Loss/Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9. Payment etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
A Payment of P&O Nedlloyd's Invoices . . . . . . . . . . . . . . . . . . . . . . . . 105
B Collecting Charges for Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
C Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
D Brokerages, Commissions etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10. Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
A Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
B Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
C Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

98
Part 3
Appendix 1
P&O Nedlloyd - Standard Trading
Conditions 1997
The majority of services offered by P&O Nedlloyd “Instructions” means any statement of the
and its subsidiary organisations are covered by Customer's requirements, whether verbal or
the contract of carriage, the terms of which written.
appear in the Bill of Lading terms and conditions
“Service(s)” means all or any business
and Tariff for the trade in question. However
undertaken by P&O Nedlloyd for the
some value added services are offered which fall
Customer including the provision of advice,
outside the scope of the contract of carriage.
information and any services whatsoever.
In order to formalise the relationship of P&O
“Sub-Contractor” means direct and indirect
Nedlloyd with its Customers on such occasions
subcontractors and their respective servants,
the following Standard Trading Conditions are
agents and sub-contractors.
published.
Any reference in these Conditions to
(The Customer's attention is drawn to the
agreement in writing that varies these terms
clauses herein which exclude or limit P&O
and conditions must be on P&O Nedlloyd
Nedlloyd's liability and those which require
stationery and signed by an authorised
the Customer to indemnify P&O Nedlloyd
official of the company.
in certain circumstances).
2. Application
1. Definitions
Any Services provided by P&O Nedlloyd,
In these conditions:
whether gratuitous or otherwise, shall be
“P&O Nedlloyd” means P&O Nedlloyd Ltd,
subject to these Conditions unless:
P&O Nedlloyd b.v. and their subsidiary and
associated companies. (A) P&O Nedlloyd contract in writing with
the Customer on alternative terms and
“Customer” means any person to whom P&O
conditions, including, but not limited to,
Nedlloyd provides any services.“Person”
issuing Bills of Lading, Air or Sea
includes individuals, groups, companies or
Waybills or any other contract for
any other legal entity.
carriage or any other Service to Goods,
“Owner” means the owner of the goods to or or
in respect of which P&O Nedlloyd provides (B) Any Conditions herein are contrary to
any services and any other Person who has any mandatory applicable law relating
or may acquire an interest in them. to the Services undertaken by P&O
Nedlloyd on behalf of the Customer.
“Goods” means all or any part of the goods
(including any packaging, containers or In which case the alternative terms and
equipment supplied by the Customer or conditions or mandatory applicable law shall
Owner) which are the subject of any be paramount and prevail to the extent of
Services. any inconsistency with these Conditions (but
no further). In case of (A) or (B) these
“Conditions” means the provisions of this
Conditions shall continue to operate in
contract.
respect of any Services to which the
99
 alternative terms and conditions or Nedlloyd or any of its agents or Sub-
mandatory law do not apply or in respect of Contractors, shall forthwith, upon
any matter upon which they are silent. demand, be paid by the Customer to
P&O Nedlloyd.
3. Role
(A) Unless specifically agreed in writing (D) Disposal of Goods: If the Services
between the Customer and P&O provided involve the handling, storage
Nedlloyd prior to the commencement of and/or carriage of Goods and the
the Service, P&O Nedlloyd shall be at Customer fails to take delivery thereof
liberty to provide the Service as a in accordance with Clause 4(C), P&O
principal or to procure it as an agent, in Nedlloyd shall be entitled to dispose of
either case subject to the appropriate the Goods, at the expense of the
Conditions herein. Customer, by sale or otherwise at P&O
Nedlloyd's sole discretion, after the
(B) The agreement of a price for the Service
Goods have been in P&O Nedlloyd's
is not of itself an indication of whether
control for 30 days.
P&O Nedlloyd is acting as a principal or
as an agent. P&O Nedlloyd shall give 14 days notice
in writing to the Customer of any
4. P&O Nedlloyd's General Conditions
intention to dispose of the Goods.
(A) Performance: P&O Nedlloyd will
undertake the tasks necessary to However, in respect of Goods that, in
provide the contracted Services to the the sole opinion of P&O Nedlloyd, are
Customer with a reasonable degree of likely to deteriorate, decay, become
care and skill and, subject to Clause 8 worthless or incur charges in excess of
(D), within a reasonable timescale. their value, or Goods which may cause
loss or damage to other Goods, injury to
(B) Deviation from Customer's
Persons or contravene any applicable
Instructions: Whilst, subject to these
laws or regulations, P&O Nedlloyd may
Conditions, P&O Nedlloyd will take
dispose of such Goods immediately
reasonable steps to perform the
without prior notice to the Customer.
Customer's Instructions, if at any time
P&O Nedlloyd, in its sole discretion, The proceeds of sale, after deducting the
considers that there is good reason, in cost of sale and any sums whatsoever
the Customer's interest, to depart from due by the Customer to P&O Nedlloyd
any of the Customer's Instructions, it for this or any earlier Services, shall be
shall be free to do so without prior held by P&O Nedlloyd to the credit of
notice to the Customer or incurring any the Customer. The Customer shall forth-
additional liability as a result thereof. with upon demand remit any shortfall
between the proceeds of sale and the
(C) Customer fails to take Delivery: If
sums owed by him to P&O Nedlloyd.
Services provided involve the handling
and/or carriage of Goods and the (E) Separate Service to Goods: Services
Customer, Consignee or Owner fails to to Goods may be undertaken in
take delivery thereof at the time and conjunction with goods of other
place when and where P&O Nedlloyd is customers or third parties, unless
entitled to call upon such Person to take specifically agreed in writing prior to
delivery thereof, P&O Nedlloyd shall be commencement of the Services.
entitled to store said Goods, at the sole
(F) Effecting Insurance: No insurance
risk of the Customer, whereupon P&O
will be effected, except upon express
Nedlloyd's liability (if any) for the Goods
instructions given in writing by the
shall wholly cease. The cost of such
Customer, and all insurances effected by
storage, if paid or payable by P&O

100
 P&O Nedlloyd are subject to the usual 5. P&O Nedlloyd as a Principal
exceptions and conditions of the policies If, in accordance with Clause 3 hereof, P&O
of the insurance company or Nedlloyd agrees to act as a principal, then it
underwriters taking the risk. Unless will perform, or in its own name procure the
otherwise agreed in writing, P&O performance of the Services contracted,
Nedlloyd shall not be under any subject to the provisions of any specific
obligation to effect a separate insurance contract for Services which it may issue
on each consignment but may declare it subject to Clause 2(A), failing which these
on any open or general policy held by Conditions in general and this Clause in
P&O Nedlloyd. particular shall apply.

Insofar as P&O Nedlloyd agrees to (A) Liberties: P&O Nedlloyd is not a

arrange insurance, it acts solely as common carrier and, except to the
agent for the Customer to arrange such extent provided in Clause 2 hereof,
insurance. contracts on the basis of these
Conditions alone. P&O Nedlloyd
(G) Declarations: Except in accordance
reserves to itself the liberties as to the
with Instructions in writing previously
means, routes and procedures to be
received and accepted by P&O Nedlloyd,
followed in the handling, storage and
P&O Nedlloyd shall not be obliged to
carriage of Goods.
make any declaration for the purpose of
any statute, convention, contract or (B) Period of Responsibility: If P&O
other requirement as to the nature or Nedlloyd contracts to provide Services
value of any Goods, any characteristic of as a principal, it accepts liability for loss
any Goods or Services to any Goods. of or damage to Goods occurring
between the time when it takes the
(H)Special Delivery Arrangements:
Goods into its charge and the time when
Except by prior written agreement or
it is entitled to call upon the Customer,
under the terms of a printed document
Consignee or Owner to take delivery of
signed by P&O Nedlloyd, any
the Goods. P&O Nedlloyd shall be
Instructions relating to the delivery or
deemed to have taken the Goods into its
release of Goods in specified
charge when the Goods have been
circumstances only, such as (but without
received by P&O Nedlloyd or have been
prejudice to the generality of this
released or handed over by the
Clause) against payment or against
Customer, or any Person acting on
surrender of a particular document, are
behalf of the Customer, to any Person
accepted by P&O Nedlloyd only as
acting on behalf of P&O Nedlloyd in
agents for the Customer if third Persons
accordance with any directions of P&O
are engaged to effect compliance with
Nedlloyd for the performance of the
the Instructions.
Services. P&O Nedlloyd shall be deemed
P&O Nedlloyd shall not be under any to have delivered the Goods, either when
liability in respect of such arrangements they have been placed at the disposal of
unless such arrangements are made in the Customer (or its nominee) and
writing. notice thereof has been given to the
Customer (or its nominee) at the
In any event, P&O Nedlloyd's liability in address provided by the Customer,
respect of the performance of such following completion of the contracted
Instructions shall not exceed that Service(s), or following the
provided for in these Conditions in implementation of Clause 4 (B), (C) or (D)
respect of loss of or damage to Goods.

101
(C) Liabilities: P&O Nedlloyd's liabilities (C) Evidence of Contract with Third
will be as provided in Clause 8 hereof. Party Contractor: P&O Nedlloyd
shall, on demand by the Customer,
6. P&O Nedlloyd as an Agent
provide evidence of any contract entered
If, in accordance with Clause 3 hereof, P&O
into as agent for the Customer. Insofar
Nedlloyd acts as an agent then, without
as P&O Nedlloyd may be in default of
prejudice to the general applicability of these
this obligation, it shall be deemed to
Conditions, its responsibilities shall be as
have contracted with the Customer as a
follows:
principal for the performance of the
(A) Agency: P&O Nedlloyd shall be entitled Customer's Instructions.
and the Customer hereby expressly
7. Customer's Warranties and Indemnities
authorises P&O Nedlloyd, except in so
(A) Goods: The Customer warrants that,
far as has been otherwise specifically
unless the Customer provides prior
agreed between P&O Nedlloyd and
written notification to and obtains
the Customer, to enter into contracts
written agreement from P&O Nedlloyd,
with third parties on behalf of the
the Customer will not tender for
Customer for the Service required.
Services any Goods which are:
(Third parties, for the purpose of this
Clause, includes P&O Nedlloyd's parent, (a) Hazardous/Obnoxious Goods:
subsidiary and/or associated companies). (i) classified by the IMO Dangerous
Goods Code as being hazardous,
When acting as an agent P&O Nedlloyd
does not make, or purport to make, any (ii) nevertheless of a dangerous,
contract with the Customer for Services, damaging or obnoxious nature, so as
but acts solely on behalf of the Customer to be liable to cause damage to any
in establishing contracts with third other goods or to be a risk to property,
party contractors for the Services life or health,
required, so that a direct contractual or
relationship is established between the (iii)likely to harbour or encourage vermin
Customer and such third party or other pests.
contractor.
(b) High Value Goods: of a valuable nature
(B) Contracting Terms with Third (which description shall include but not
Parties: If there is a choice of prices be restricted to bullion, coin, precious
according to the extent or degree of the stones, jewellery, works of art, antiques
liability assumed by third party and valuables of all kinds).
contractors, no declaration of value will
(c) Perishables: perishable and require
be made, except under prior Instructions
temperature controlled conditions or
received in writing and accepted by P&O
have a short shelf-life.
Nedlloyd; nor shall P&O Nedlloyd be
under any liability to the Customer by (d) Packing/Marking: not properly and
reason of having entered into any sufficiently prepared, packed, stowed,
contract on behalf of the Customer, labelled and/or marked for the Services
whereby the extent or degree of the for which they are being tendered, unless
liability assumed by a third party those Services include said tasks.
contractor is in any respect excluded or
limited, unless such contract is entered If the Goods are tendered in/on containers,
into contrary to prior written trailers, flats, railway wagons, tanks, igloos,
Instructions given by the Customer and or any other unit load device specifically
accepted in writing by P&O Nedlloyd. constructed for the carriage of goods by land,
sea or air (each hereafter individually

102
 referred to as “transport unit”), then, unless or employee of P&O Nedlloyd (hereinafter
P&O Nedlloyd has accepted Instructions as referred to as “such Persons”) which
principal to load the transport unit, the imposes or attempts to impose upon any
Customer also warrants that: of such Persons any liability whatsoever
in connection with any Services and/or
(i) the Goods have been properly and
Goods (whether or not arising out of
competently loaded into/onto the
negligence on the part of such Persons)
transport unit;
unless P&O Nedlloyd is acting as an
(ii) the Goods are suitable for carriage in/on agent only in accordance with Clause 6
the transport unit being utilised, and and such Persons are independent
contractors providing a Service to the
(iii)the transport unit is in a suitable Customer through the agency of P&O
condition to carry the Goods loaded Nedlloyd, in which case the Customer
therein/on, may proceed against such Persons under
the terms of the contract procured on its
and if nevertheless Goods which breach any
behalf from such Persons by P&O
of the warranties in this Clause 7(A) are
Nedlloyd acting as an agent only.
tendered for Services, the Customer shall
Excepting for such instance, if any such
indemnify P&O Nedlloyd, its servants,
claim or allegation should nevertheless be
agents and Sub-Contractors against all
made, the Customer will indemnify P&O
penalties, claims, damages, costs and
Nedlloyd and such Persons against all
expenses of whatsoever nature and
consequences thereof.
howsoever arising in connection with such
Goods. Without prejudice to the foregoing, unless
trading directly with the Customer under
Unless prior arrangements have been made
its own conditions through the agency of
and prior written acceptance obtained from
P&O Nedlloyd, every such Person shall
P&O Nedlloyd, no liability whatsoever,
have the benefit of every right, defence,
howsoever arising, will be accepted by P&O
limitation and liberty of whatsoever
Nedlloyd in connection with such Goods and
nature herein contained or otherwise
P&O Nedlloyd, their servants, agents and/or
available to P&O Nedlloyd as if such
Sub-Contractors may deal with such Goods
provisions were expressly for his benefit;
as they, in their sole discretion, consider
and in entering into this contract P&O
appropriate.
Nedlloyd, to the extent of these
(B) Details of Goods: The Customer provisions, does so not only on its own
warrants that the description and behalf but also as agent and trustee for
particulars of the Goods furnished by or such Persons.
on behalf of the Customer or Owner are
The Customer further warrants that no
complete and accurate and include all
claim or allegation in respect of any
data necessary to accomplish the required
Services or Goods shall be made against
Services safely and effectively.
P&O Nedlloyd by any Person other than
(C) Authority: The Customer warrants that in accordance with these Conditions
he is either the Owner or has the which imposes or attempts to impose
authority of the Owner to contract with upon P&O Nedlloyd any liability
P&O Nedlloyd for the Services. whatsoever, whether or not arising out of
negligence on the part of P&O Nedlloyd
(D) Circular Indemnity: The Customer
and, if any such claim or allegation
warrants that no claim or allegation shall
should nevertheless be made, to
be made by any Person against any
indemnify P&O Nedlloyd against all
parent, subsidiary or associate company,
consequences thereof.
director, servant, agent, Sub-Contractor

103
(E) Acting on Customer's Instructions: 8. Liability
The Customer shall indemnify P&O (A) Time Bar: Any claim by the Customer
Nedlloyd against all liability, loss, against P&O Nedlloyd in respect of any
damage, cost and expense whatsoever Service must be made in writing without
and howsoever arising as a result of P&O delay. In the event of delay in
Nedlloyd acting in accordance with the presentation of a claim causing prejudice
Customer's Instructions or arising from to P&O Nedlloyd's ability to investigate
any breach by the Customer of any said claim or reserve its rights against its
warranty contained in these Conditions Sub-Contractors, P&O Nedlloyd shall be
or from the negligence of the Customer. relieved of any liability in respect of such
claim.
(F) Duty, Fines, etc.: The Customer shall be
liable for and shall indemnify P&O In any event, P&O Nedlloyd shall be
Nedlloyd in respect of all duties, taxes, discharged of all liability whatsoever and
imposts, levies, deposits and outlays of howsoever arising in respect of any
whatsoever nature levied by any Service provided for the Customer unless
authority in relation to the Goods and for suit be brought and written notice thereof
all payments, fines, costs expenses, loss given to P&O Nedlloyd within nine
or damage whatsoever and howsoever months from the date of any event or
incurred or sustained by P&O Nedlloyd occurrence alleged to give rise to a cause
in connection therewith. of action against P&O Nedlloyd.

(G) General Average: The Customer shall (B) Exclusions: Whether P&O Nedlloyd acts
indemnify P&O Nedlloyd in respect of as agent or principal it shall be relieved
any claims of a General Average or of liability for loss, damage or expense if
Salvage nature which may be made on it and to the extent that same was caused
and shall provide such security as may be by:
required by P&O Nedlloyd in this
(a) the act or omission of the Customer,
connection on demand.
or Person other than P&O Nedlloyd
(H) Information Indemnity: Advice and acting on behalf of the Customer,
information, in whatever form it may be Owner or of the Person from whom
given, is provided by P&O Nedlloyd for P&O Nedlloyd took the Goods in
the Customer only and the Customer charge;
shall indemnify P&O Nedlloyd against
(b) insufficiency of the packing and/or
any liability, claim, loss, damage, cost or
marks and/or labels and/or numbers
expense arising out of any other Persons
unless P&O Nedlloyd had undertaken
relying upon such advice or information.
to carry out the packing, application
Except under special arrangements
of marks or labelling or numbering of
previously made in writing, advice and
the Goods;
information which is not related to
Instructions accepted by P&O Nedlloyd is (c) handling, loading, stowage or
provided gratuitously and without unloading of the Goods by the
liability. Customer, Owner or any Person other
than P&O Nedlloyd acting on behalf
(I) EDI Transmission: In the event of
of the Customer;
Instructions data being transmitted via
electronic communication, the Customer (d) inherent vice of the Goods;
accepts that the sender is responsible for
the quality of such Instructions or data. (e) strike, lock out, stoppage or restraint
of labour;

104
 (f) a nuclear incident; (iii)75,000 SDR's in respect of any one
Service,
(g) any cause or event which P&O
Nedlloyd was unable to avoid and the whichever shall be the lesser.
consequences whereof P&O Nedlloyd
For the purposes of this Clause the value
was unable to prevent by the exercise
of the Goods shall be their value at the
of reasonable diligence;
place and time they are delivered to the
(h) any act or omission of P&O Nedlloyd Consignee in accordance with the
the consequences of which it could not relevant Service or should have been so
reasonably have foreseen; or delivered. The exchange from SDRs to
settlement currency shall be calculated at
(i) compliance with the instructions of
the rate applicable on the date when the
any Person entitled to give them.
claim is paid.
The burden of proving that the loss or
Details of P&O Nedlloyd's additional
damage was due to one or more of the
charges for accepting increased liability
above causes or events shall rest upon
will be provided on request.
P&O Nedlloyd.
(D) Consequential Loss/Delay: Except by
(C) Limits of Liability: Subject to Clause 2,
prior written agreement, P&O Nedlloyd
unless P&O Nedlloyd agrees in writing to
shall not in any circumstances,
accept alternative levels of liability (in
whatsoever or howsoever arising, be
which case such limits as agreed shall be
liable for indirect or consequential loss,
substituted for those provided in this
such as (but not limited to) loss of profits,
Clause), P&O Nedlloyd's liability (if any
loss of market or the consequences of
and whether acting as principal or
delay or deviation howsoever caused.
agent), howsoever arising, and
notwithstanding that the cause of loss, However, if pursuant to Clause 4(B) P&O
damage or expense is unexplained, shall Nedlloyd accepts any liability for delay,
not exceed: liability shall in no circumstances exceed
a sum equal to twice the amount of P&O
(a) in the case of claims for loss or
Nedlloyd's charges in respect of the
damage to Goods:
relevant Service.
(i) the value of any Goods lost or
The defences and limits of liability provided
damaged, or
for in these Conditions shall apply in any
(ii) a sum at the rate of two Special action against P&O Nedlloyd whatsoever,
Drawing Rights as defined by the howsoever arising, whether the action be
International Monetary Fund, founded in contract, tort or otherwise.
(hereinafter referred to as SDRs), per
9. Payments, etc.
kilo of gross weight of any Goods lost
(A) Payment of P&O Nedlloyd's Invoices:
or damaged,
The Customer shall pay to P&O Nedlloyd
whichever shall be the lesser. in cash or as otherwise agreed all sums
immediately when due, without reduction
(b) in the case of all other claims: or deferment on account of any claim,
counterclaim or set off. If any sum due is
(i) the value of the Goods the subject of
still unpaid 30 days after the date of the
the relevant Service, or
invoice, P&O Nedlloyd shall be entitled to
(ii) a sum at the rate of two SDRs per kilo add interest at 2% above the minimum
of the gross weight of the Goods the lending rate of the local national bank for
subject of the said Service, or any period in excess thereof.

105
(B) Collecting Charges for Customer: deteriorate, P&O Nedlloyd's right to
Despite the acceptance by P&O Nedlloyd sell or dispose of the Goods shall arise
of Instructions to collect freight, duties, immediately upon any sum becoming
charges or other expenses from the due to P&O Nedlloyd, subject only to
Consignee or any other Person, the P&O Nedlloyd taking reasonable
Customer shall remain responsible for steps to bring to the Customer's
such freight, duties, charges or expenses attention its intention of selling or
on receipt of evidence of proper demand disposing of the Goods before doing so.
and in the absence of evidence of
(D) Brokerages, Commissions, etc: P&O
payment (for whatever reason) by such
Nedlloyd shall be entitled to be paid and
Consignee or other Person when due.
retain all brokerages, commissions,
(C) Lien: allowances and other remunerations
(a) Subject to sub-clause (b), P&O customarily retained by or paid to freight
Nedlloyd shall have a general lien on forwarders.
all Goods and documents relating to
10. Law and Jurisdiction
Goods in its possession, custody or
(A) Law: The Services undertaken pursuant
control for all sums due at any time
to and the interpretation of these
from the Customer or Owner, in
Conditions shall be governed by English
respect of Services to the Goods under
Law.
lien or of any earlier Services on other
Goods, and shall be entitled to sell or (B) Jurisdiction: Any claim or dispute
dispose of such Goods or documents as arising under these Conditions shall be
agent for and at the expense of the referred to the High Court of Justice in
Customer and apply the proceeds in London, to the exclusion of the
or towards the payment of such sums. jurisdictions of the courts or any other
Upon accounting to the Customer for places, unless P&O Nedlloyd appeals to
any balance remaining after payment the jurisdiction of any other place and
of any sum due to P&O Nedlloyd and voluntarily submits thereto.
the costs of sale or disposal, P&O
Nedlloyd shall be discharged of any (C) Arbitration: Nothing herein shall
liability whatsoever in respect of the prevent the parties to any dispute under
Goods or documents. these Conditions agreeing to refer it to
arbitration on mutually acceptable terms.
(b) If the Goods, in the sole opinion of
P&O Nedlloyd, are liable to perish or

106
Part 3
Appendix 2
CMI Uniform Rules for Sea Waybills
1. Scope of Application The consignee shall be under no greater
(i) These Rules shall be called the “CMI liability than he would have been had the
Uniform Rules for Sea Waybills”. contract of carriage been covered by a bill
of lading or similar document of title.
(ii) They shall apply when adopted by a
contract of carriage which is not covered 4. Rights and Responsibilities
by a bill of lading or similar document of (i) The contract of carriage shall be subject
title, whether the contract be in writing to any International Convention or
or not. National Law which is, or if the contract
of carriage had been covered by a Bill of
2. Definitions
Lading or similar document of title would
In these Rules:
have been, compulsorily applicable
“Contract of carriage” shall mean any
thereto. Such convention or law shall
contract of carriage subject to these Rules
apply notwithstanding anything
which is to be performed wholly or partly by
inconsistent therewith in the contract of
sea.
carriage.
“Goods” shall mean any goods carried or
(ii) Subject always to subrule (i), the contract
received for carriage under a contract of
of carriage is governed by:
carriage.
(a) these Rules;
“Carrier” and “Shipper” shall mean the
parties named in or identifiable as such from (b) unless otherwise agreed by the
the contract of carriage. parties, the carrier's standard terms
and conditions for the trade, if any,
“Consignee” shall mean the party named in
including any terms and conditions
or identifiable as such from the contract of
relating to the non-sea part of the
carriage, or any person substituted as
carriage;
consignee in accordance with rule 6(i).
(c) any other terms and conditions agreed
“Right of Control” shall mean the rights and
by the parties.
obligations referred to in rule 6.
(iii) In the event of any inconsistency between
3. Agency *
the terms and conditions mentioned
(i) The shipper on entering into the contract
under subrule (ii)(b) or (c) and these
of carriage does so not only on his own
Rules, these Rules shall prevail.
behalf but also as agent for and on behalf
of the consignee, and warrants to the 5. Description of the Goods
carrier that he has authority so to do. (i) The shipper warrants the accuracy of the
particulars furnished by him relating to
(ii) This rule shall apply if, and only if, it be
the goods, and shall indemnify the carrier
necessary by the law applicable to the
against any loss, damage or expense
contract of carriage so as to enable the
resulting from any inaccuracy.
consignee to sue and be sued thereon.

* Enactment of the Carriage of Goods by Sea Act 1992 in the United Kingdom rendered this
provision superfluous under English law, (see Section 6).

107
 (ii) In the absence of reservation by the (ii) The shipper shall have the option, to be
carrier, any statement in a sea waybill or exercised not later than the receipt of the
similar document as to the quantity or goods by the carrier, to transfer the right
condition of the goods shall: of control to the consignee. The exercise
of this option must be noted on the sea
(a) as between the carrier and the
waybill or similar document, if any.
shipper be prima facie evidence of
Where the option has been exercised the
receipt of the goods as so stated;
consignee shall have such rights as are
(b) as between the carrier and the referred to in subrule (i) above and the
consignee be conclusive evidence of shipper shall cease to have such rights.
receipt of the goods as so stated, and
7. Delivery
proof to the contrary shall not be
(i) The carrier shall deliver the goods to the
permitted, provided always that the
consignee upon production of proper
consignee has acted in good faith.
identification.
6. Right of Control
(ii) The carrier shall be under no liability for
(i) Unless the shipper has exercised his
wrong delivery if he can prove that he
option under sub-rule (ii) he shall be the
has exercised reasonable care to ascertain
only party entitled to give the carrier
that the party claiming to be the
instructions in relation to the contract of
consignee is in fact that party.
carriage. Unless prohibited by the
applicable law, he shall be entitled to 8. Validity
change the name of the consignee at any In the event of anything contained in these
time up to the consignee claiming Rules or any such provisions as are
delivery of the goods after their arrival at incorporated into the contract of carriage by
destination, provided he gives the carrier virtue of rule 4, being inconsistent with the
reasonable notice in writing, or by some provisions of any International Convention
other means acceptable to the carrier, or National law compulsorily applicable to
thereby undertaking to indemnify the the contract of carriage, such rules and
carrier against any additional expense provisions shall to that extent but no further
caused thereby. be null and void.

108
Part 3
Appendix 3
CMI Rules for Electronic
Bills of Lading
1 Scope of Application (i) “Electronic Storage” means any temporary,
These rules shall apply whenever the parties intermediate or permanent storage of
so agree. electronic data including the primary and
the back up storage of such data.
2. Definitions
(a) “Contract of Carriage” means any 3. Rules of Procedure
agreement to carry goods wholly or partly by (a) When not in conflict with these Rules, the
sea. Uniform Rules of Conduct for Interchange of
Trade Data by Teletransmission, 1987
(b) “EDI” means Electronic Data Interchange,
(UNCID) shall govern the conduct between
i.e. the interchange of trade data effected by
the parties.
teletransmission.
(b) The EDI under these Rules should conform
(c) “UN/EDIFACT” means the United Nations
with the relevant UN/EDIFACT standards.
Rules for Electronic Data Interchange for
However, the parties may use any other
Administration, Commerce and Transport.
method of trade data interchange acceptable
(d) “Transmission” means one or more message to all of the users.
electronically sent together as one unit of
(c) Unless otherwise agreed, the document
despatch which includes heading and
format for the Contract of Carriage shall
terminating data.
conform to the UN Layout Key or compatible
(e) “Confirmation” means a Transmission which national standard for bills of lading.
advises that the content of a Transmission
(d) Unless otherwise agreed, a recipient of a
appears to be complete and correct, without
Transmission is not authorised to act on a
prejudice to any subsequent consideration or
Transmission unless he has sent a
action that the content may warrant.
Confirmation.
(f) “Private Key” means any technically
(e) In the event of a dispute arising between the
appropriate form, such as a combination of
parties as to the data actually transmitted,
numbers and/or letters, which the parties
an Electronic Monitoring System may be used
may agree for securing the authenticity and
to verify the data received. Data concerning
integrity of a Transmission.
other transactions not related to the data in
(g) “Holder” means the party who is entitled to dispute are to be considered as trade secrets
the rights described in Article 7(a) by virtue and thus not available for examination. If
of its possession of a valid Private Key. such data are unavoidably revealed as part of
the examination of the Electronic Monitoring
(h) “Electronic Monitoring System” means the System, they must be treated as confidential
device by which a computer system can be and not released to any outside party or used
examined for the transactions that it for any other purpose.
recorded, such as a Trade Data Log or an
Audit Trail.

109
(f) Any transfer of rights to the goods shall be (b) Such terms and conditions must be readily
considered to be private information and available to the parties to the Contract of
shall not be released to any outside party not Carriage.
connected to the transport or clearance of the
(c) In the event of any conflict or inconsistency
goods.
between such terms and conditions and these
4. Form and Content of the Receipt Rules, these Rules shall prevail.
Message
6. Applicable Law
(a) The carrier, upon receiving the goods from
The Contract of Carriage shall be subject to
the shipper, shall give notice of the receipt of
any international convention or national law
the goods to the shipper by a message at the
which would have been compulsorily
electronic address specified by the shipper.
applicable if a paper bill of lading had been
(b) This receipt message shall include: issued.

(i) the name of the shipper; 7. Right of Control and Transfer

(a) The Holder is the only party who may, as
(ii) the description of the goods, with any
against the carrier:
representations and reservations, in the
same tenor as would be required if a (1) claim delivery of the goods;
paper bill of lading were issued;
(2) nominate the consignee or substitute a
(iii)the date and place of the receipt of the nominated consignee for any other party,
goods; including itself;

(iv)a reference to the carrier's terms and (3) transfer the Right of Control and
conditions of carriage; and Transfer to another party;

(v) the Private Key to be used in subsequent (4) instruct the carrier on any other subject
Transmissions. concerning the goods, in accordance with
the terms and conditions of the Contract
The shipper must confirm this receipt message to
of Carriage, as if he were the holder of a
the carrier, upon which Confirmation the shipper
paper bill of lading.
shall be the Holder.
(b) A transfer of the Right of Control and
(c) Upon demand of the Holder, the receipt
Transfer shall be effected:
message shall be updated with the date and
place of shipment as soon as the goods have (i) by notification of the current Holder to
been loaded on board. the carrier of its intention to transfer its
Right of Control and Transfer to a
(d) The information contained in (ii), (iii) and
proposed new Holder, and
(iv) of paragraph (b) above including the date
and place of shipment if updated in (ii) confirmation by the carrier of such
accordance with paragraph (c) of this Rule, notification message, whereupon
shall have the same force and effect as if the
(iii)the carrier shall transmit the information
receipt message were contained in a paper
as referred to in Article 4 (except for the
bill of lading.
Private Key) to the proposed new Holder,
5. Terms and Conditions of the Contract of whereafter
Carriage
(iv) the proposed new Holder shall advise the
(a) It is agreed and understood that whenever
carrier of its acceptance of the Right of
the carrier makes a reference to its terms
Control and Transfer, whereupon
and conditions of carriage, these terms and
conditions shall form part of the Contract of (v) the carrier shall cancel the current
Carriage. Private Key and issue a new Private Key
to the new Holder.
110
(c) If the proposed new Holder advises the reasonable care to ascertain that the party
carrier that it does not accept the Right of who claimed to be the consignee was in fact
Control and Transfer or fails to advise the that party.
carrier of such acceptance within a
10. Option to Receive a Paper Document
reasonable time, the proposed transfer of the
(a) The Holder has the option at any time prior
Right of Control and Transfer shall not take
to delivery of the goods to demand from the
place. The carrier shall notify the current
carrier a paper bill of lading. Such document
Holder accordingly and the current Private
shall be made available at a location to be
Key shall retain its validity.
determined by the Holder, provided that no
(d) The transfer of the Right of Control and carrier shall be obliged to make such
Transfer in the manner described above document available at a place where it has
shall have the same effect as the transfer of no facilities and in such instance the carrier
such rights under a paper Bill of Lading. shall only be obliged to make the document
available at the facility nearest to the
8. The Private Key
location determined by the Holder. The
(a) The Private Key is unique to each successive
carrier shall not be responsible for delays in
Holder. It is not transferable by the Holder.
delivering the goods resulting from the
The carrier and the Holder shall each
Holder exercising the above option.
maintain the security of the Private Key.
(b) The carrier has the option at any time prior
(b) The carrier shall only be obliged to send a
to delivery of the goods to issue to the Holder
Confirmation of an electronic message to the
a paper bill of lading unless the exercise of
last Holder to whom it issued a Private Key
such option could result in undue delay or
when such Holder secures the Transmission
disrupts the delivery of the goods.
containing such electronic message by the
use of the Private Key. (c) A bill of lading issued under Rules 10 (a) or
(b) shall include:
(c) The Private Key must be separate and
distinct from any means used to identify the (i) the information set out in the receipt
Contract of Carriage and any security message referred to in Rule 4 (except for
password or identification used to access the the Private Key); and
computer network.
(ii) a statement to the effect that the bill of
9. Delivery lading has been issued upon termination
(a) The carrier shall notify the Holder of the of the procedures for EDI under the CMI
place and date of intended delivery of the Rules for Electronic Bills of Lading. The
goods. Upon such notification the Holder has aforementioned bill of lading shall be
a duty to nominate a consignee and to give issued at the option of the Holder either
adequate delivery instructions to the carrier to the order of the Holder whose name for
with verification by the Private Key. In the this purpose shall then be inserted in the
absence of such nomination, the Holder will bill of lading or “to bearer”.
be deemed to be the consignee.
(d) The issuance of a paper bill of lading under
(b) The carrier shall deliver the goods to the Rule 10 (a) or (b) shall cancel the Private
consignee upon production of proper Key and terminate the procedures for EDI
identification in accordance with the delivery under these Rules. Termination of these
instructions specified in paragraph (a) above; procedures by the Holder or the carrier will
such delivery shall automatically cancel the not relieve any of the parties to the Contract
Private Key. of Carriage of their rights, obligations or
liabilities while performing under the
(c) The carrier shall be under no liability for
present Rules nor of their rights, obligations
misdelivery if it can prove that it exercised
or liabilities under the Contract of Carriage.

111
(e) The Holder may demand at any time the national or local law, custom or practice
issuance of a print-out of the receipt message requiring the Contract of Carriage to be
referred to in Rule 4 (except for the Private evidenced in writing and signed, is satisfied by
Key) marked as “non-negotiable copy”. The the transmitted and confirmed electronic data
issuance of such a print-out shall not cancel residing on computer data storage media
the Private Key nor terminate the displayable in human language on a video screen
procedures for EDI. or as printed out by a computer. In agreeing to
adopt these Rules, the parties shall be taken to
11. Electronic Data is Equivalent to Writing
have agreed not to raise the defence that this
The carrier and the shipper and all subsequent
contract is not in writing.
parties utilising these procedures agree that any

112
Part 3
Appendix 4
Glossary of Useful Terms and
Abbreviations
ADR Accord European Nation du Athens International convention
transport international des Convention governing Carrier's liability for
marchandise Dangereux par Passengers and their baggage.
Route
(see Part 1 Section 5A(iii)). BAF Bunker Adjustment Factor
Freight adjustment factor to
AES (U.S.) Automated Export System reflect current cost of bunkers.
(see Part 1 Section 5B(i))
B/E Bill of Exchange
AN (U.S.) Arrival Notice: A forward dated undertaking to
U.S. equivalent of an ANF (see pay prepared by the debtor and
Part 1 Section 7B(i)). signed by the creditor to
acknowledge debt and date
ANF Arrival Notification payment due. Used in
(Europe) Form Old term for advice to Documentary Credits to allow
Consignee of goods coming period of credit (see Part 1 Section
forward, now called - Notice of 4A(v)).
Arrival (see Part 1 Section 7A(i)).
BIFA British International Freight
ATA Carnet Admission Temporaire - Association
(Europe) Temporary Admission Trade Association of British
An ATA Carnet makes the Freight Forwarders.
Customs clearance of certain
temporary importations and BIMCO Baltic and International
exportations easier. Maritime Council
A Danish based organisation to
Ad Valorem (literally) “according to the which many shipowners belong
value” that represents their interests
An Ad Valorem freight rate is one and assists by preparing standard
where freight is based on the charter parties and other shipping
value of the goods. An Ad Valorem documents and providing other
Bill of Lading is one where the advisory services.
value of the goods is shown on the
face of the document, which value B/L Bill of Lading
becomes the Carrier's limit of Acts as a receipt for goods,
liability, in return for the contains the terms of the contract
payment of a freight surcharge of carriage and is usually a
(see Part 2 Section 2B - Clause document of title to the goods (see
7(3)). Part 2 Section 1).

113
B/L Ton Bill of Lading Ton CCC Customs Co-operation
The greater of weight or Council.
measurement of goods where 1 ton The forum for international
is either 1000 kilos or 1 cubic co-operation between Customs
metre (Also called Freight Ton). authorities in an attempt to
provide harmony and uniformity
BMLA British Maritime Law of approach.
Association
C&D Collection and Delivery
BSC British Shippers Council Carriage from/to Customer's
premises to/from CFS.
BSI British Standards Institution
The authorised body for the C&E (UK) Customs and Excise
preparation of national standards
in the UK CEFIC European Chemical Industry
Council
Blank (see Part 2 Section 1D: Consignee). (see Part 1 Section 5A(iii).)
Endorsement
CENSA Council of European &
Bolero An “Electronic” Bill of Lading Japanese National
project (see Part 1 Section 9C (i)). Shipowners' Associations

Box Colloquial name for container. C&F Cost and Freight

A conventional / port-to-port
Boxtime A standard BlMCO time charter INCOTERM term of sale. (More
for containerships. correctly known as CFR) - (see
Part 1 Section 3B).
Break-Bulk Goods shipped loose in the vessel's
Cargo hold and not in a container. CFR Cost and Freight
A conventional / port-to-port only
CABAF Currency and Bunker INCOTERM term of sale. (More
Adjustment Factor popularly referred to as C&F) (see
A combination of CAF and BAF. Part 1 Section 3B).

CAF Currency Adjustment Factor CFS Container Freight Station.

Freight adjustment factor to Place for packing and unpacking
reflect currency exchange LCL consignments. Variously
fluctuations. known as C/Bs (in UK), Depots
(Australia) and ICDs (UK and the
CAP Common Agricultural Policy Indian Subcontinent) - (see Part 1
(Europe) EU Policy relating to agricultural Section 2E).
produce.
CHIEF Customs Handling of Import
C/B Containerbase (UK) and Export Freight.
One of a group of UK Container Customs computer system to
Freight Stations. handle clearance procedures.

CIF Cost Insurance Freight

A conventional port-to-port only
INCOTERM term of sale (see Part
1 Section 3B).

114
CIM Convention Internationale COT (UK) Customer's Own Transport
(Europe) concernant le transport des Customer collects from/delivers to
Marchandises par chemin de CFS/CY.
fer
International convention on COTIF Convention Concerning
Carriage of Goods by Rail (see (Europe) International Carriage by Rail
Part 2 Section 3B(ii)). (see Part 2 Section 3B(ii)).

ClP Carriage and Insurance paid to COU Clip on Unit

A new Combined Transport Portable refrigeration units
INCOTERM replacing ClF where or
CT is involved but applicable to Central Operating Unit
all modes of transport. Body set up to co-ordinate
Particularly appropriate for consortium operations in a trade.
Combined Transport (see Part 1
Section 3B). CPT Carriage Paid to
A new Combined Transport
CISG Convention on the International INCOTERM replacing CFR where
Sale of Goods 1980 (Vienna CT is involved but applicable to
Convention) (see Part 1 Section all modes of transport.
3A). Particularly appropriate for
Combined Transport (see Part 1
CMI Comite Maritime International Section 3B).
An international committee of
maritime lawyers (see Part 2 CRN (UK) Customs Registered Number
Section 3). A number allocated by C&E to an
exporter or agent (Freight
CMR Conventional relative au Forwarder) for use when exports
(Europe) contrat transport are to be entered under the SCP.
international des
Marchandises par Route CSC Container Safety Convention
International convention on International convention for safe
carriage of Goods by Road (see containers (see Part 2 Section
Part 2 Section 3B(i)). 3D(vi)).

COGSA Carriage of Goods by Sea Act CSI (U.S.) Container Security Initiative
(UK) COGSA 1971 = Hague Visby (see Part 2 Section 4-U.S.)
Rules (see Part 2
Section 3A(ii)). CT Combined Transport
COGSA 1992 = Rights of Suit Carriage by more than one mode
against Carrier of transport against one contract
(see Part 1 of carriage.
Section 9B(v)) &
Part 2 Section 4 - CTD Combined Transport Document
UK). The CTO's Bill of Lading. (see
(U.S.) COGSA 1936 = Hague Rules (see Part 1 Section 2A).
Part 2 Section
3A(i)). CTO Combined Transport Operator
A Carrier who contracts as a
CONCISE Containerised Cargo Insurance principal to perform a CT
Service (see Part 1 Section 6). operation. (see Part 1 Section 2A).

115
C-TPAT Customs- Trade Partnership Container (see THC).
(U.S.) Against Terrorism Service
(see Part 2 Section 4 - U.S.). Charge

CWE Cleared Without Examination Contingency (see Part 1 Section 6).

Cleared by Customs without Cover
inspection.
Contracting (see Principal Carrier).
CY Container Yard Carrier
Collection and Distribution point
for loaded FCL and empty Core (see Part 1 Section 9C(i)).
containers. Messaging
Platform
Central Data (see Part 1 Section 9 C(i)).
Registry Customs A paperless simplified clearance
2000 procedure. D (U.S.) Door.
Certificate Document issued by regulatory (see Part 1 Section 2E).
of body certifying compliance with
Compliance ISM Code (see Part 2 Section DAF Delivery at Frontier
3A(vii)). An INCOTERM term of sale
applicable to all modes of
Certificate Document certifying the country transport (see Part 1 Section 3B).
of Origin of origin of goods which is
normally issued or signed by a DAN (UK) Deferment Approval Number
Chamber of Commerce or An account held by a trader with
Embassy. HMC & E to which duty & VAT
are debited direct.
Cellular Term used to describe hold
configuration of purpose built DDP Delivered Duty Paid
containerships equipped with cell An INCOTERM term of sale
guides into which containers fit. applicable to all modes of
transport (see Part 1 Section 3B).
Classification ICC Insurance clause listing
Clause criteria for vessels on which DDU Delivered Duty Unpaid
automatic cargo insurance cover An INCOTERM term of sale
applies at standard rates. applicable to all modes of
transport (see Part 1 Section 3B).
Clean B/L (see Part 1 Section 4B - Art.32).
DEQ Delivered Ex Quay
Closing Date Last date on which export goods A conventional/port-to-port
can be accepted for a nominated INCOTERM term of sale. (Used to
sailing. be EXQ) (see Part 1 Section 3B).

Conference Organisation of a group of lines DES Delivered Ex Ship

operating in one trade who A conventional / port-to-port
agree to operate a common tariff. INCOTERM term of sale. (Used to
be EXS) - (see Part 1 Section 3B).
Consortium A group of CTO's who agree to
rationalise sailings in a trade and DETR Department of the
carry each others' containers. Environment, Transport and
the Regions

116
DGN (UK) Dangerous Goods Note Doc. Credit Documentary Credit
The basis of international trade
DRS Documentation & Revenue by means of which payment is
System made to the Shipper against
The P&O Nedlloyd Commercial surrender of specified documents
and Financial System to facilitate to a bank acting on behalf of
speedy response to Customers' Consignee.
commercial requirements.
Document (see Part 2 Section 1A).
DTI (UK) Department of Trade and of Title
Industry
Government Department with Dock Acknowledgement of receipt of
responsibility for trade matters. Receipt goods/container at Pier
(U.S.) incorporating Bill of Lading terms
DTI (UK) Direct Trader lnput from time of receipt (see Part 1
Procedure for Customs entry Section 5B(ii).
Clearance (see Part 1 Section
7A(ii)). Door Terminology for CT movement
(see Part 1 Section 2E).
Data Logger Electronic temperature recording
device for refrigerated containers. Drawback Repayment of duty upon
re-exportation of goods previously
Delivery A document authorising delivery imported.
Order to a nominated party of goods in
the care of a third party. Can be EC European Community
issued by a Carrier on surrender
of a Bill of Lading and then used ECG (UK) Export Credits Guarantee
by Merchant to transfer title by Insurance on goods shipped
endorsement. against non-payment by reason of
commercial and/or political risks
Demurrage Charge raised for detaining FCL as arranged.
container/trailer at a CFS for
longer period than provided in ECSA European Community
Tariff. Shipowners Association

Depot A CFS (see Part 1 Section 2E). ECSI (UK) Export Cargo Shipping
Instruction.
Designated Person in ship operating company Shipping Instructions from
Person nominated to be responsible for Shipper to Carrier.
compliance with ISM Code (see
Part 2 Section 3A(vii)). EDI Electronic Data Interchange
The transfer of structured data
Detention Charge raised for detaining from one computer system to
container/trailer at Customer's another.
premises for longer period than
provided in Tariff. EDIFACT EDI For Administration,
Commerce and Transport
Organisation responsible to UN
ECE for the development of
standard EDI messages for
Administration, Commerce and
Transport.
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EDISHIP An organisation to develop FAK Freight All Kinds
systems for exchanging data System whereby freight is
between major Carriers and charged per container,
Merchants by electronic means. irrespective of nature of goods,
and not according to a Tariff.
EDP Electronic Data Processing
Computer processing of Data. FAS Free Alongside Ship
A conventional / port-to-port only
EHA Equipment Handover INCOTERM term of sale (see Part
Agreement 1 Section 3B).
Agreement acknowledging
condition signed when taking over FCA Free Carrier (named place)
Carrier's equipment and A new Combined Transport
returning it, which incorporates INCOTERM replacing FOB where
terms of contract under which CT is involved, but applicable to
equipment is taken over. all modes of transport.
Particularly appropriate for
EPU (UK) Entry Processing Unit Combined Transport (see Part 1
Customs office that processes Section 3B).
Customs entries.
FCL Full Container Load
ESC European Shippers Arrangement whereby Shipper
Council utilises all the space in a
container which he packs himself.
ETA Estimated Time of Arrival
FEU Forty-Foot Equivalent Unit
ETD Estimated Time of Departure
FIATA International Federation of
EU European Union Freight Forwarders
(now more usually referred to as Associations.
the EC). (Federation Internationals des
Associations de Transitaires et
eUCP Supplement to the Uniform Assimiles.)
Customs and Practice for
Documentary Credits for FILO Free In Liner Out
Electronic Presentation (see Part Freight includes cost of discharge
1 Section 4C). but not loading.

EXW Ex Works FFI For Further Instructions

An INCOTERMS term of sale Used in Place of Delivery box if
applicable to all modes of final destination uncertain at time
transport (see Part 1 Section 3B). of shipment, e.g. Barking
Containerbase FFI.
Electronic The presently preferred term for
Commerce trading with EDI (see Part 1 FIOS Free In Out + Stow
(E-commerce) Section 9C). Shipper pays for loading, stowing
and discharging.
Export Governmental document
Licence authorising export of restricted FMC Federal Maritime Commission
goods. US Federal Authority governing
sea transport.

118
FOB Free On Board GO (U.S.) General Order
A conventional/port-to-port only Issued by U.S. Customs as notice
INCOTERM term of sale (see Part of intention to seize goods.
1 Section 3B).
G.P. General Purpose container
Fantainer Container with built in forced
ventilation. @Global An internet based electronic
Trade trading system (see Part 1 Section
Feeder A short-sea vessel used to fetch 9C(ii)).
Vessel and carry goods and containers to
and from deep sea vessels Grand A multi-trade consortium in
between hub and outports. Alliance which P&O Nedlloyd operates.

Flat Rack A container consisting of a base Groupage Consolidation of several LCL

and two ends but no sides or roof. consignments into a container.

Flexitank Polythene bag to allow bulk Groupage One who consolidates LCL
liquids and powders to be carried Agent consignments to offer to a Carrier
in G.P.s. as an FCL.

Force Circumstances beyond the control H/C High Cube

Majeure of either party to a contract. Containers 9 ft 6 ins high instead
of usual 8 ft 6 ins.
Freight The amount payable for the
carriage of goods. Sometimes also H/H Half Height
used to describe the goods An OT container only 4 ft 3 ins
themselves which are better high.
described as cargo in marine
transportation. H/L Heavy Lift

Freight The Carrier's Agent. HMC (UK) Her Majesty's Customs

Broker
HMC&E Her Majesty's Customs &
Freight The Merchant's Agent. (UK) Excise
Forwarder
HNS Hazardous & Noxious
Freight Ton The tonnage on which freight is Substances
charged (also called B/L Ton) An international convention
which was agreed at a diplomatic
GA General Average conference in 1996 (see Part 2
(see Part 2 Section 9A). Section 3A(vi)).

GATT General Agreement on Tariffs Hague Rules 1924 International Convention on

and Trade Carriage of Goods by Sea (see
An international multilateral Part 2 Section 3A(i)).
agreement embodying a code of
practice for fair trading in Hague-Visby 1968 Revision of Hague Rules
international commerce. Rules (see Part 2 Section 3A(ii)).

119
Hamburg 1978 UNCTAD alternative to IMO International Maritime
Rules the Hague Rules (see Part 2 Organisation
Section 3A(iii)). The UN Body charged with the
duty of preparing safety and
Harter Act (see Part 2 Section 4 - u.s.) anti-pollution conventions and
making recommendations
Haulier A road transport operator concerning these matters for sea
(UK) (a trucker in U.S.). transport (see Part 2 Section 3).

House Terminology for a CT movement INCOTERMS International Rules for the

(see Part 1 Section 2E). Interpretation of Trade
Terms.
Hub & Spoke The way of describing modern A list (currently 13) of standard
containerised operations whereby terms for foreign trade contracts
large containerships call at a compiled by ICC. Current edition
restricted number of major (hub) is 2000 (see Part 1 Section 3B).
ports to or from whence
containers are carried to/from ISM Code International Safety
minor ports by feeder services Management Code
(spokes). (see Part 2 Section 3A(vii)).

IBAP Intervention Board for ISO International Standards

Agricultural Produce Organisation
Authority monitoring application International Organisation of
of EC CAP policy. National Standard Bodies
responsible, inter alia, for setting
ICC International Chamber of standards for container
(Europe) Commerce construction.
A Paris-based international forum
that aims to facilitate trade (see IUA International Underwriting
UCP & INCOTERMS - Part 1 Association
Sections 3B and 4B). London Marine Underwriters
governing body - previously the
ICC (U.S.) Interstate Commerce Institute of London Underwriters
Commission (ILU).
The U.S. governmental body to
regulate interstate trade. Inherent Those properties of certain goods
Vice which lead to their arrival in a
ICC (Ins) Institute Cargo Clauses damaged condition without
The IUA standard clauses for accident or negligence e.g.
cargo insurance. unprotected steel will “weather”,
bales of rubber stick together,
ICD Inland Clearance Depot copra is almost invariably
A CFS with Customs Clearance infested.
Facilities (see Part 1 Section 2E).
Integral Refrigerated container with own
IMDG Code International Maritime machinery.
Dangerous Goods Code
The lMO recommendations for the
carriage of dangerous goods by
sea (see Part 2 Section 3A(viii)).

120
L/C Letter of Credit Latent A defect not obvious from
The document in which the terms Defect cursory inspection.
of a Documentary Credit
transaction are set out. (see Part Lien A right to retain goods and
1 Section 4.) documents against payment of
charges etc. due but unpaid (see
LCL Less than Container Load Part 2 Section 2B Clause 14).
A parcel of goods too small to fill a
container which is grouped by the Liner Vessel plying a regular
Carrier at a CFS with other trade/defined route against a
compatible goods for the same published sailing schedule.
destination.
Liner Terms Freight includes the cost of
LEC (UK) Local Export Control loading onto and discharging from
A system of clearing export the vessel.
containers at Exporter's premises.
M Motor
L/I Letter of Indemnity (see Part 1 Section 2E).
Sometimes used to allow
Consignee to take delivery of MAFF Ministry of Agriculture,
goods without surrendering B/L Fisheries & Food
which has been delayed or become
lost (see Part 2 Section 6B(i)). MLA (U.S.) Maritime Law Association

LIC (UK) Local Import Control MMO Multi Modal Operator

A system of clearing import
containers at Importer's premises. MSA Merchant Shipping Act

LIFO Liner In Free Out MT Empty

Freight includes the cost of An empty container
loading but not discharging. or
Multimodal Transport
LLMC International Convention on
Limitation of Liability for MTD Multimodal Transport
Maritime Claims Document
A 1976 limitation convention (see Part 1 Section 2A).
enacted in the UK by the
Merchant Shipping Act 1979 (see MTO Multimodal Transport
Part 2 Section 3A(iv)). Operator
Same as MMO.
LOF '95 Lloyds Open Form 2000
A standard form of salvage Manifest List of goods (or passengers) on a
agreement (see Part 2 Sections vessel.
3A(v) & 9C).
Measurement 1 cubic metre
LO-LO Lift-On/Lift Off Ton One of the alternative bases of
A containership onto which and Freight Tariff.
from which containers are lifted
by crane (as opposed to Ro-Ro). Multimodal The UNCTAD preferred term for
Transport what we call Combined Transport.

121
NVO(C)C Non Vessel-Owning/Operating P&I Club Protection and Indemnity
(Common) Carrier Association
A Carrier issuing Bs/L for Carrier's mutual liability insurer.
carriage of goods on vessels which
he neither owns nor operates. POA Place of Acceptance
Where the goods are received for
Notice of (see Part 1 Section 7A). transit and Carrier's liability
Arrival commences.
Now more usually called a POR.
Notify Party Party to whom ANF is sent.
POD Place of Delivery
O (U.S.) (Ocean) Port Where goods are delivered and
(see Part 1 Section 2E). Carrier's liability ceases.
or
O/H Overheight Proof of Delivery
A container/flat rack with goods A signed receipt acknowledging
protruding above the top of the delivery.
corner posts.
POR Place of Receipt
OOG Out of Gauge (see POA above).
Goods whose dimensions exceed
those of the container/flat rack in P to P (UK) Port to Port (see Part 1 Section 2E)
which they are packed. (U.S.) Pier to Pier (see Part 1 Section 2E).

OPA 90 Oil Pollution Act 1990 Particular (see Part 2 Section 2B Clause
A U.S. act with very onerous Charges 10 and Part 2 Section 9B) also
provisions covering all vessels known as Special Charges.
trading to/from USA.
Partlow Paper disc recording chart for
O/T Open Top Chart refrigeration temperatures on
A container with tarpaulin certain refrigerated containers.
covered open roof.
Pier Terminology for a CT movement
O/W Overwidth (see Part 1 Section 2E).
A container with goods protruding
beyond the sides of the Poincare Fictitious gold franc originally
container/flat rack onto which Franc used amongst other things to
they are packed. assess Carrier's liability in an
inflationproofed manner in Hague
P (U.S.) Pier Visby Rules. Now largely replaced
(see Part 1 Section 2E). by SDRs.

PA Particular Average Port (UK) (see Part 1 Section 2 E).

Partial accidental loss or damage
(as opposed to Total Loss or Porthole Insulated container relying on
General Average). external source of cold air.

PHA Port Health Authority Port Service (see THC).

Charge

122
Principal The Carrier issuing a CTD SDR Special Drawing Rights
Carrier (regardless of whether or not The mean of a basket of
goods are carried on his own, a currencies designed to “iron out”
third party's or a consortium currency exchange fluctuations in
member's vessel). international valuations. (Now
used to express limitation in the
R (U.S.) Rail Hague Visby Rules and MSA
(see Part 1 Section 2E). Limitation Convention etc.).

RFS Received for Shipment SITPRO Simpler Trade Procedures

Board
RN Release Note
Receipt signed by Customer SMS Safety Management System
acknowledging delivery of goods. Safe vessel operating procedure
required by ISM Code (see Part 2
RO-RO Roll On-Roll Off Section 3A(vii)).
A ferry type vessel onto which
goods and containers can be SOB Shipped On Board
driven, usually via a ramp. Endorsement on a Bill of Lading
confirming loading on vessel.
Reefer Refrigerated
SOLAS Safety of Life at Sea
Removal Indicates goods clear of Customs. An IMO Convention governing the
Note (UK) safe operation of vessels.

SAD (UK) Single Administrative SSN (UK) Standard Shipping Note

Document (see Part 1 Section 5A (ii)).
Customs Declaration Form for
both import and export cargo. STC Said to Contain

SCAR Straight Consignment - STCW 95 Standards of Training,

Automatic Release Certification and Watchkeeping
(see Part 1 Section 9A). Convention.

SCOPIC Special Compensation P&I SWIFT Society for Worldwide

Clause Clause Interbank Financial
(see Part 2 Section 3A(v)). Telecommunications

SCP (UK) Simplified Clearance Salvage (see Part 2 Section 9C).

Procedure
A simplified clearance procedure, Shipper The person tendering goods for
under which Exporters of goods carriage.
not requiring special control may Not to be confused with the party
submit an abbreviated Customs issuing the B/L or the vessel
pre-entry or an approved operator who is the Carrier.
commercial document at the time
of export and provide the full Shut-out Goods not carried on intended
statistical information after the vessel.
goods are exported.
Slot Space on board a vessel occupied
by a container.

123
Slothire A standard BIMCO slot charter TTO Through Transport Operator
for containerships. A Carrier who contracts to carry
goods (only part of which carriage
Special (see Part 2 Section 9B) also he undertakes himself) on the
Charges known as Particular Charges. basis that he is a principal whilst
the goods are in his personal care
Standard The terms under which P&O and an agent only whilst they are
Trading Nedlloyd contracts for any not (see Part 1 Section 2B).
Conditions services to Customers not covered
by the Bill of Lading (see Part 3 Tanktainer Container for bulk liquids.
Appendix 1).
Tariff Terms Conditions and scale of charges.
Straight Bill A term for a non negotiable
of Lading Bill of Lading. In the U.S. the Terminal Port at which containers are
Pomerene Act governs its loaded/unloaded onto/from
operation (see Part 1 Section 9A). container vessels.

Stuffing/ The action of packing/unpacking a Ton 2,240 lbs

Stripping container.
Tonne 1,000 kilos
TEU Twenty-foot Equivalent Unit
eg. 1 x 40ft = 2 TEU Track & (see Part 1 ends of Section 5 and 7).
1 x 20ft = 1 TEU Trace

THC Terminal Handling Charge Trade Card A financial supply chain service
A charge for handling FCLs at provider (see Part 1 Section
ocean terminals. Also known as a 9C(iii)).
Container/Port Service Charge.
Trem Card Transport Emergencies Card
TIR (Europe) Transports International (see Part 1 Section 5A(iii)).
Routiers
A system involving the issue of a Trucker A road transport operator (a
carnet to road hauliers which (U.S.) haulier in the UK).
allows loaded vehicles to cross
national frontiers with minimum Trunking Movement of containers between
Customs formalities. Terminals and CFSs/CYs.

TIR (U.S.) Trailer Interchange Receipt UCC (U.S.) Uniform Commercial Code
Receipt to Shipper delivering a
loaded export container to a UCP Uniform Customs and
terminal (see Part 1 Section Practice for Documentary
5B(ii)). Credits
The “Bankers Bible” on
T/S Transhipment Documentary Credit
Transfer from one vessel to interpretation issued by the ICC
another for oncarriage. (Brochure no. 500 operating from
1st January 1994 (see Part 1
TTD Through Transport Document Section 4B)).
The TTO's Bill of Lading (see Part
1 Section 2B).

124
UCR Unique Consignment Reference UNCTAD UNCTAD Multi Modal
(see Part 1 Section 5A(iv)). MMO Transport Convention

UKWA United Kingdom Warehousing UN ECE United Nations Economic

Association Commission for Europe.
(see Part 2 Section 5A(v)).
- previously the National VAT Value Added Tax
Association of Warehouse Keepers An EU tax on goods and services

UN United Nations Vienna The United Nations Convention

Convention on Contracts for the International
UNCITRAL United Nations Commission Sale of Goods (Vienna 1980) (see
on International Trade and Part 1 Section 3A).
Law
(see Part 2 Section 3) WCO World Customs Organisation
(see Part 1 Section 5A(iv)).
UNCON Uncontainerable Goods
Goods which, because of their Waybill Acts as a receipt for the goods and
dimensions, cannot be evidence of the contract of
containerised and which are carriage, but is not a document of
therefore carried other than in a title (see Part 1 Section 9B).
container.
York/ Rules relating to the adjustment
UNCTAD United Nations Conference on Antwerp of G.A. Present draft is 1994
Trade and Development Rules (see Part 2 Section 9A).
(see Part 2 Section 3)

125
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