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Shipping bill_Mate's receipt report

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This report has taken shape not just because of our individual efforts, but also with the contribution of many others. We would like to hereby acknowledge their help and valuable assistance. We would like to thank our Distribution Management Professor, Mr.Bhanu.U.V for providing us with the opportunity to learn and internalize the concepts and procedures of shipping bill, bill of lading and mate’s receipt. We also thank our friends for their moral support and encouragement throughout the project. We also extend our grateful thanks to all those who cooperated with us and provided us with lot of valuable information.


Table of contents S.NO 1 2 CONTENTS Introduction Shipping bills
    Export procedures Types Annexure forms Shipping bill format

PG.NO 4 5

3 4

Computerization E-Annex Bill of lading
 Types and functions  Forms of bill of lading  Bill of lading forms

23 25

5 6

Mate’s receipt  Content and procedure Conclusion





An exporter without any commercial contract is completely exposed of foreign exchange risks that arises due to the probability of an adverse change in exchange rates. Therefore, it becomes important for the exporter to gain some knowledge about the foreign exchange rates, quoting of exchange rates and various factors determining the exchange rates. In this section, we have discussed various topics related to foreign exchange rates in detail. Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties. For each one represents a kind of certificate document. Certain documentation takes place while exporting from India. Special documents may be required depending on the type of product or destination. Certain export products may require a quality control inspection certificate from the Export Inspection Agency. Some food and pharmaceutical product may require a health or sanitary certificate for export. The various documentations include the bill of lading and mate’s receipt. Archeological diggings have revealed that a crude type of bill of lading (in tablet form) was used as long ago as the Phoenician period. The current style of bill of lading can be traced back to the sixteenth century and it remained unchanged in its wording until the twentieth century.


Shipping bill
Customs document used where drawback is claimed, such as on goods exported or on dutiable goods transshipped or re-exported from a bonded warehouse. It serves basically as a statistical record. This is to provide for bringing transparency in trade practices adopted by maritime transport logistics service providers in respect of services rendered by them for arranging transportation of containerized cargo; registration of such service providers and their obligations; mode and manner of fixing tariff by the service providers; EXIM (Export Import) and for matters connected therewith or incidental thereto.

Export procedures
Certain procedures have to be followed for the purpose of clearing goods to be exported. Briefly these procedures have been discussed below:Procedures to be followed by the exporter 1. The exporter must submit the Shipping Bill in case of export by sea or air and Bill of Export in case of export by road in the prescribed form containing the prescribed details such as the name of the exporter, consignee, invoice number, details of packing, description of goods, quantity, FOB value, etc. Along with the Shipping Bill, other documents such as copy of packing list, invoices, export contract, letter of credit, etc. are also to be submitted. Goods have to be assessed for duty even if no duty is payable. The following are the documents required for the processing of the Shipping Bill:
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GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net weight of each package. 4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc. Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice.



Inspection/ Examination Certificate.

The formats presented for the Shipping Bill are as given below:
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White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback. Yellow Shipping Bill in triplicate for the export of dutiable goods. Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

Declaration of exporter The exporter must make a declaration in the prescribed form in the following situations:   


In case of exports of goods under claims for drawbacks of duty In case of goods under DEEC schemes In case of exports of goods in anticipation of issue of advance license or DEEC In case of consignment covered by AR-4A (Excise Forms refer Excise Law Details) pending weighment at the docks. These forms are excise forms against which a manufacturer exporter may clear goods from his factory for the purpose of exports without payment of any excise duty In case of exporters who have filed Shipping Bill without certificate from an inspection agency

2. Excise formalities : In case goods are cleared by the manufacturer for export, there are accompanied by Form AR-4 or AR-4A. This form must be submitted to the Customs authorities. The Custom Officer certifies that the goods covered by the form have been exported. This firm then has to be submitted to the Maritime Collector for obtaining proof of export. The bond executed by the manufacturer-exporter with the excise authorities for clearance of goods without payment of excise duty is released only when proof of export is accepted by the maritime collector. 3. Exchange control formalities : The exporter must file copies of GR form prescribed by the Reserve Bank of India (RBI) for the purposes of exchange control with his bankers. Purpose of GR form is to enable RBI to ensure that export proceeds from the export are received in India through proper banking channels only within reasonable time limits. 4. Inspection reports : Certain goods such as items which are prohibited for export under the Foreign Trade (Development and Regulation) Act, antiques, arms, narcotics, etc can be exported only after they have been inspected for export and appropriate 6

permissions from the concerned authorities have been obtained. In such case, inspection report must also be submitted. The inspection may be done at the exporter's premises or at a Customs Area. 5. Let export order : After all the above formalities are over and the Customs Officer is satisfied that the export does not contravene the provisions of any law and all duties and other dues have been paid, a "Let Export Order" will be made to permit the export.

Procedures have to be followed by the person in-charge of conveyance (shipper) 1. Entry outwards entry outward is granted by the Customs authorities on application made by Steamer Agents 14 days in advance to enable the exporters to submit Shipping Bills. This enables Speedy completion of Customs formalities. Loading of goods on the vessel can start only after Entry Outwards is granted. 2. Loading with permission : Goods for export can be loaded only after the Shipping Bill or Bill of Exports duly assessed by the Customs Officer is handed over by the exporter to the person in charge of the conveyance. In case of baggage and mail baggage, Shipping Bill is not necessary but approval of the Customs Officer is required for loading. 3. Export manifest or export report must be filed in the prescribed form before departure giving the prescribed details which are similar to the details required in the Import Manifest. The Export Manifest may be amended or supplemented with permission if there were no fraudulent intention. The Export manifest must be accompanied by a declaration that the details specified are true and correct by the person in-charge of the conveyance. This report is not required if the conveyance is carrying only luggage. Miscellaneous procedures 1. Boat notes: Sometimes, a vessel instead of actually docking at a port may unload cargo in a smaller boat which will bring the cargo on to the shore. In such cases, the small boat must be accompanied by a Boat Note. Such Boat Notes will be issued by a Customs Officer in the prescribed form in duplicate. Similarly, in case of exports, a boat may carry the export cargo to a waiting ship at sea. In such cases, a boat note is required. However, a Boat Note is not required if the cargo is accompanied by a shipping list. A Boat Note is also required for transshipment of cargo i.e. transfer from one ship to another for reshipment. 7

2. Transit goods : Any goods imported in a vessel or aircraft will be allowed to remain on board of the vessel or aircraft and to be transited without payment of custom duty. However all these goods must be mentioned in import manifest submitted by the person in charge of the conveyance. 3. Trans-shipment of goods means transfer of goods from one vessel to another for transport to any port. Goods can be trans-shipped without payment of any customs duty provided they are mentioned in the Import Manifest. In such cases, a Bill of Transshipment must be submitted to the Customs Officer. However, such transshipment is not allowed in case of certain prohibited goods. 4. Coastal goods means goods transported from one port in India to another port in India but do not include imported goods. Though no import or export is involved in case of coastal goods, adequate control procedures are required in order to ensure that these goods are not illegally exported. Trade and transport of coastal goods by sea can be carried out only on approved coastal ports. The consignor must file a Bill of Coastal Goods to the Customs authorities in the prescribed form giving the prescribed details. The goods will be loaded by master of vessel only after the Bill of Coastal Goods is approved by the Customs authorities. The Master of vessel must carry an advice book where entries will be made by the Customs Officer. This advice book can be inspected by a Customs Officer a a coastal port. On completion of loading, entry outwards is granted by the Customs Officer after which the vessel may leave port. The coastal goods can be unloaded on a Coastal Port or a Custom Port. The relevant documents and goods will be inspected by the Customs authorities. Unloading can be done only after obtaining permission from the Customs Officer.

TYPES OF SHIPPING BILLS The Shipping Bill for Exports is an essential document for Customs. The various types of Shipping Bills are:  Free Shipping Bill  Drawback Shipping Bill  DEPB Shipping Bill  DEEC Shipping Bill


 Bond Shipping Bill  Dutiable Shipping Bill All the above except the Dutiable Shipping Bill are computerized Shipping Bills for Exports. For 'Repair-and-Return' shipments, and for shipments sent by individuals, a manual Shipping Bill is permitted. For all types of Shipping Bill, the Shipper must submit with every shipment: 1. Shipper's Letter of Instructions 2. Copy of the IEC Certificate with updated PAN Number

Free Shipping Bill
A Free Shipping Bill is filed for shipments where the Shipper does not claim any export benefits. For filing of a Free Shipping Bill, only the following documents are required.

Drawback Shipping Bill
A Drawback Shipping Bill is filed for shipments where the Shipper claims Drawback as an export benefit. To be able to file a Drawback Shipping Bill at Mumbai Customs EDI Systems, the Shipper must have a valid account with the State Bank of India, Air Cargo Complex, Mumbai Airport. For first time Shippers wishing to open an account with the bank, we could provide assistance. The minimum deposit amount is Rs: 10,000/=. This Bank Account Number is required so as to permit the authorities to deposit the Drawback amount due to the Shipper, in the account. Customs EDI Systems at Mumbai Air Cargo Complex would reject any application of filing of Drawback Shipping Bill where the Shipper does not have an account with the State Bank of India.

DEPB Shipping Bill (Duty Entitlement Passbook Scheme)
If the Shipper is exporting an item for which the rate under DEPB is fixed for the serial number of the item being exported, the following are required:  Annexure D Form, dully filled out, signed by the shipper and stamped with the company seal. Note: It is important that Column 11 be filled in correctly by the Shipper. 9

 Purchase Bill or AR4 Form (for value verification). If the product is listed in the DEPB book but the rate is not fixed, then clearance may be permitted under Provisional basis. The client cannot claim DEPB if not listed in the DPEB book. Provisional to finalization of the post cleared shipping bill needs to be handled by shipper on himself.

DEEC Shipping Bill (Duty Exemption Entitlement Certificate)
For one time DEEC Registration, the following are required:  Annexure For DEEC Declaration  Advance License - original.  DEEC Book or copy of complete application along with the Joint Director Foreign Trade (JDFT) acknowledgement of receipt of registration.  DEEC declaration stating it is an exempted material (if not already stated on the Invoice).  Appendix III, if claiming Drawback with DEEC (A State Bank of India account at the Air Cargo Complex branch, Mumbai, is essential. Once the DEEC Registration is complete, the following is required from the Shipper:  DEEC Declaration Appendix II.  Declaration stating it is an exempted item (if not already stated on the Invoice) Indian Customs at Mumbai Airport require a Chartered Engineer's Certificate for all shipments containing "Engineering Products" forwarded under DEEC Shipping Bills.

Bond Shipping Bill
Shippers who have the status of 100% EOU (Export Oriented Unit) must export their shipments under the Bond Shipping Bill. The following are required for export under a Bond Shipping Bill: Annexure C1 Form, duly filled out, signed and stamped with the seal of the Examination Officer of the Excise Department, and countersigned by the Superintendent of the Excise Department.


Dutiable Shipping Bill
Duty for Exports is levied on the Shipper for export of items like Coffee, Mica, Raw Cotton, Raw Wool, Tea, Tobacco, etc. Such items can only be cleared through customs against a Dutiable Shipping Bill, which is the only form of Shipping Bill that is handled manually by customs. Export Duty must be paid by the shipper.

Repair and Return Items
If a Shipper has imported an item, of which part or the whole is found to be defective, and the Shipper wishes to return it to the supplier for repairs, the following documentation is required for customs clearance:  Original Import Bill of Entry.  Original customs-attested Import Invoice which should clearly state the serial/part number of the item imported.  Certificate for Repair and Return from any Bank. Note: Customs may request for a Chartered Engineer's Certificate. For export, the Export Shipping Bill will show the serial/part number of the item that will be used when the item is returned after repairs. Duty will be levied only on the "repair cost plus to-and-from freight/insurance".

Gifts & Samples by the Freight Mode
Shippers wishing to forward bonafide samples or free gifts by the freight mode will have to obtain: A Certificate from any bank that should state the nature of the shipment (gift/samples), and that no foreign exchange is involved. Click for a sample of Bank Certificate for Gifts and Samples


Export of Pharmaceuticals
For export of Pharmaceuticals, the following additional documentation is required along with the other applicable documents mentioned above: Drug License Copy. Form 20/21B. A sample of the contents for inspection by the Additional Drug Controller. Sample of the label affixed on the package.

Dangerous Goods are not acceptable for carriage. For all other chemicals that are accepted for carriage the following documents are required, apart from the normal customs paperwork: Toxic Substances Control Act (TSCA) Certificate.: Certificate from the Shipper certifying that the goods are not covered under the latest edition of the IATA DANGEROUS GOODS REGULATIONS, and are non-hazardous, non-toxic and non-corrosive, and can be carried on a passenger aircraft. MSDS (Material Safety Data Sheet) which should include `Transportation details'.

Additional Documentation for Garments/Fabrics destined to the USA
For clearance through US Customs, the following additional documentation is required for shipments of Fabric/Garments to the USA:  Quota Charge Statement: For all shipments to the USA of Garments, Fabric, Madeups, a 'Single Country Declaration' has to be submitted which must contain details of the following: •Whether the material is Knitted or Woven. •Gender (whether the item is for Female, Male or •Type of Neck (crew, no neck opening, V-neck). •Stitches per centimeter. •Long or short sleeved.



•Type of bottom (hemmed, ribbed, drawstring).  Negative Declaration: negative declaration is required to be submitted by the Shipper when exporting Silk Garments, Fabric, Made-ups, where the content is more than 70%, to the USA.

The Shipper is responsible to ensure that shipments tendered are:  Packed in good, air-worthy packaging which will withstand the weight of the contents while in transit to destination.  That the Name and Address of the Shipper and Consignee are marked on at least two sides of each package to ensure easy identification.  That the Marks and Numbers (as stated on the Invoice) are legibly printed on at least two sides of each package to ensure easy identification. Poor packaging will result in loss/damage to the goods











E-Annex® is a solution, which has been developed to automate creation of Shipping Bill (For Exports) and Bill Of Entry (For Imports) Data to be transmitted to Indian Customs, printing of Common Declaration Form and documents like Exporter’s Invoice and Packing list, Manual Shipping Bill, GSP, AEPC, COO etc. Adequate care has been taken to minimize the data entry operations. This solution has been designed to reduce human errors, to being almost non-existent, which occur during the entry of the information in the Annexure. Shipping Bill can be created by creating a new job directly in E-Annex. The job created for Shipping Bill and Bill Of Entry can be directly sent to Indian Customs via email from E-Annex. E-Annex reduces the operational cost by reducing the processing time and eliminating errors, which are very frequent when done manually. Eliminating repetitive data entry reduces the manpower cost. The salient features of Shipping Bill (For Export) are as below:
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Prepare Shipping Bill in new format with updated Masters for DBK, DEPB, RITC etc. Keeps a record of shipping bills prepared with date, time and user wise. Maintains a Job Register with queries for shipper, type of SB filed under various scheme codes etc. which can be used as MIS report. Various other MIS reports for better business understanding. Email/Fax Check List and Annexure to your Shippers, for their information, from the system. No need to scan or courier, saves paper and courier costs. Help available for all Masters. Need not type data again and again. Facility to prepare a duplicate job to minimize data entry for similar jobs. Transfer job from one location to another i.e. from Air to Sea or vice versa. Can Be Queried about Any & Every Job filed. Comprehensive and context sensitive Help available at all points of Data Entry. Send email with Shipping bill attachment from E-ANNEX® Version 4.0 directly OR alternatively use File Upload/Floppy Submission. No need to use and configure Netscape 4.7. Decodes the messages received back from ICEGATE/Customs and logs it into the Database system as per type of message (Shipping Bill No, Negative Messages with errors, DBK Release value etc.). Alerts you if a job is not filed from your system/office. Helps you in identifying fraudulent use of your CHA No. Multi user and multi branch version. You can prepare Shipping Bill and file Check List, Annexures from a single branch for all your other branches. Keep 23

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Dedicated Documentation Staff at One Location. User Friendly SINGLE SCREEN DISPLAY of all the Shipping Bills status at a Glance. Print Export Documentation like Manual Shipping Bill, GSP, COO, AEPC, SRTEPC, SDF, Invoice, Packing List etc. from same data. No Re-entry of Information. No need to explore ICEGATE website to submit the job. User can send N number of jobs in one time. User can export the formats of printouts in Acrobat Reader, Excel, Ms-Word Etc. All the Chapters of Drawback and DEPB are fed in the software. User can also see the description and other details of item of a particular head. If the software is running on multiple systems then the owner can see which user has created which job (By the facility of different log in). The user cannot file the incomplete jobs. We have put up Checks on multiple points. The software automatically takes its backup so there is no chance of loss of data due to virus attack and system crash.


Bill of lading (B/L)
A bill of lading (also referred to as a BOL or B/L) is a document issued by a carrier, e.g. a ship's master or by a company's shipping department, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. A through bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea. The term derives from the noun "bill", a schedule of costs for services supplied or to be supplied, and from the verb "to lade" which means to load a cargo onto a ship or other form of transport. Document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It is also a receipt for cargo accepted for transportation, and must be presented for taking delivery at the destination. Among other items of information, a B/L contains (1) consignor's and consignee's name, (2) names of the ports of departure and destination, (3) name of the vessel, (4) dates of departure and arrival, (5) itemized list of goods being transported with number of packages and kind of packaging, (6) marks and numbers on the packages, (7) weight and/or volume of the cargo, (8) freight rate and amount. It serves as a proof of ownership (title) of the cargo, and may be issued either in a negotiable or non-negotiable form. In negotiable form, it is commonly used in letter of credit transactions, and may be bought, sold, or traded; or used as security for borrowing money. A B/L is required in all claims for compensation for any damage, delay, or loss; and for the resolution of disputes regarding ownership of the cargo. The rights, responsibilities, and liabilities of the carrier and the shipper under a B/L (often printed on its back) are governed generally either by the older Hague rules, or by the more recent Hague-Visby rules. See also lading.

The standard short form bill of lading is evidence of the contract of carriage of goods and it serves a number of purposes: It is evidence that a valid contract of carriage, or a chartering contract, exists, and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i.e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement intégral) issued by the carrier sets out all the terms of the contract of carriage); It is a receipt signed by the carrier confirming whether goods matching the contract description have been received in good condition (a bill will be described


as clean if the goods have been received on board in apparent good condition and stowed ready for transport); and It is also a document of transfer and a negotiable instrument, i.e. it governs all the legal aspects of physical carriage, and, like a cheque or other negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried. This matches everyday experience in that the contract a person might make with a commercial carrier like FedEx for mostly airway parcels, is separate from any contract for the sale of the goods to be carried, however it binds the carrier to its terms, irrespectively of who the actual holder of the B/L, and owner of the goods, may be at a specific moment.

Main types of bill
Straight bill of lading This bill states that the goods are consigned to a specified person and it is not negotiable free from existing equities, i.e. any endorsee acquires no better rights than those held by the endorser. So, for example, if the carrier or another holds a lien over the goods as security for unpaid debts, the endorsee is bound by the lien although, if the endorser wrongfully failed to disclose the charge, the endorsee will have a right to claim damages for failing to transfer an unencumbered title. Also known as a non-negotiable bill of lading. Order bill of lading This bill uses express words to make the bill negotiable, e.g. it states that delivery is to be made to the further order of the consignee using words such as "delivery to A Ltd. or to order or assigns". Consequently, it can be endorsed by A Ltd. or the right to take delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of A Ltd.'s intention to transfer. Also known as a negotiable bill of lading. Bearer bill of lading This bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery. Surrender bill of lading


Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading (SBL), i.e. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods.

The bill of lading has three functions: It defines, in detail, the terms of the contract between the shipper and the shipping line for the carriage of goods from one specified port to another. It is a formal, signed receipt for a specified number of packs, e.g. crates, drums, etc., which is given to the shipper by the shipping line when the shipping line receives the consignment. It should be pointed out that the shipping line denies all knowledge of quantity, quality, value or condition of the contents of the packs. It is a document of title (i.e. a certificate of ownership) to the goods. As such, it must be produced at the port of final destination by the consignee in order that he may claim the goods. As a document of title, the bill of lading is a negotiable document, e.g. the consignee may sell the goods by endorsing and handing over the bill of lading to another authorised party. Thus, a buyer in Australia, for example, who has an original bill of lading, may pledge the consignment of goods concerned to his bank, or may resell them to somebody else while the goods are still at sea. The title to the goods can therefore be sold while the goods are in transit and a new owner can take possession of the goods at the port of destination. The reverse side of the bill of lading details the terms and conditions of the contract of carriage. (The stated conditions on most bills of lading are similar in effect if not in wording.) Bills of lading may be completed by shipping lines from the information provided in the shipping instruction when a computerized bill of lading system is in operation, or may be 27

completed by the exporter/his freight forwarder on preprinted forms which are available from the shipping line concerned. The government in the country of destination may specify the details to be included in the bill of lading, e.g. the import license number and the language in which the bill is to be completed. In general, however, the salient points to be incorporated in a bill of lading are: the name of the shipper (usually the exporter) the name of the vessel a full description of the cargo including any shipping marks, number of individual packs in the consignment, contents, cubic measurements, gross weight, etc. the marks and numbers identifying the goods the port of dispatch the port of transshipment, if applicable the port of destination if the bill is 'freight collect', full details of the freight including when and where it is to be paid the name of the consignee or, if the bill of lading is to be made negotiable (i.e. the consignor wishes to ensure that someone other than the consignee or the consignee's authorized nominee can negotiate it)/if the L/C calls for it, the shipper's order. If the bill of lading is to be consigned 'to order', it must be endorsed on the back by the exporter. This gives the holder of the bill of lading in due course* the right to the goods. If, for example, the bill of lading is sent to a bank with a draft for collection, the bank will hold the bill of lading (thereby acquiring title to the goods) until the buyer pays for the goods. the terms and conditions of the contract of carriage the date the goods were received for shipment and/or loaded on the vessel depending on whether the bill is a 'received for shipment' or 'shipped on board' document the name and address of the notify party (i.e. the person who is to be notified when the shipment arrives - usually the buyer) the number of original bills of lading to be signed on behalf of the ship's master or his agent acknowledging receipt of the goods, and the number of copies required the signature of the ship's master or his agent. Bills of lading are normally made out in sets and are issued with a number of copies. A set consists of a certain number of originals (usually three). The number of originals and the number of copies will depend on the requirements of the consignee, the method of payment, and any regulations which are in force. The originals are signed by the shipping line and as a result, they become documents of title to the goods. Each of the originals has equal validity for claiming delivery of the goods at destination but when delivery has been effected against any one original, the others cease to have validity. The wording on the bill of lading is "one being accomplished, the others stand void". The copies are 28

marked as non-negotiable. If the bill of lading constitutes one of the payment documents under a letter of credit or a documentary collection, it is important that all the originals are kept together for presentation to the bank which will then forward them, together with the other necessary documentation, to its correspondent bank in two or more separate postings. It is vital that the consignee/buyer has in his possession at least one original bill of lading before, or at the time of, the arrival of the vessel because the shipping line will not hand over the goods to the consignee unless he is able to present an original bill of lading. The usual procedure is that when the ship arrives at the port of destination, the importer presents the original bill of lading to the ship's agent and receives in return a delivery order on a particular shed or warehouse at the port. When the importer presents the delivery order to the relevant authority, the goods are released. If the ship arrives before the importer has received the documents, or if any of the documents are inaccurate or missing, the importer may be required to pay a fine. Alternatively, the goods may have to be stored until the corrected documentation is received, in which case storage charges will be payable. In the event of the bill of lading being lost or delayed, the shipping line will allow delivery of the goods to the person claiming to be the consignee, if the latter provides a letter of indemnity countersigned by a bank. The letter of indemnity relieves the shipping line of any liability should somebody else at a later stage present the actual bill of lading.

NEGOTIABLE AND NON-NEGOTIABLE BILLS OF LADING A negotiable bill of lading is one which may be sold for a consideration (i.e. an amount of money) to a third party who, as a result of his purchase of the bill, acquires ownership of the goods concerned. One of the boxes in the top left hand corner of the bill of lading reads: 'Consignee'. If the shipper wishes to ensure that the bill of lading can be negotiated by a third party whom he has nominated, he completes this box by inserting the words 'to order' and stating as 'notify party' in the box beneath it the name of the consignee, the consignee's bank, the shipper's bank, or any other party specifically designated. In so doing, the exporter can transfer his rights to a third party, e.g. the bank, by blank 29

endorsement, i.e. by signing his name on the reverse side of the bill of lading. The third party can then take delivery of the goods. If the exporter wishes to obtain a bill of lading which can only be negotiated by the buyer or someone authorized by the buyer, he does not insert the words 'to order' in the relevant box, but rather inserts the name of the consignee in that box. By doing this, the shipper can transfer title to the goods to the consignee by delivering the bill of lading to him. Should the buyer wish to transfer title of the goods to a third party, he can do so either by endorsing in blank or endorsing in favor of the third party. Whoever, in the due course of trade, possesses a bill of lading which has, for example, the endorsement of the consignee in blank on the back, has the title to the goods. Thus, the bill of lading can become a highly negotiable document. The importer can enable his clearing agent to take delivery of the goods by endorsing the bill in blank but this does not involve any transfer of ownership as no money is exchanged for the bill. All original bills of lading are thus negotiable documents to some extent -it is only copy bills of lading that are absolutely non-negotiable. Although negotiable bills of lading are in common use, certain Latin American countries either do not allow them or make it difficult for them to be used. The exporter should therefore check with his customer that the bill of lading agreed upon is acceptable to the country concerned. SHIPPED AND RECEIVED FOR SHIPMENT BILL OF LADING A shipped bill of lading indicates that the goods have been loaded on board the vessel. This type of bill must be issued if payment is being made on the basis of a letter of credit. A shipped bill of lading is also called an on board bill of lading, particularly in the United States. A received for shipment bill of lading acknowledges that the carrier has received the goods, i.e. they have been delivered into the custody of the carrier but have not actually been loaded on board the vessel. A received for shipment bill of lading is not usually acceptable to the client but may be used where dock strikes, congestion at the port, etc. are prevalent. Once the goods covered by a received for shipment bill of lading have been physically placed on board the vessel, the shipping line will, on request, stamp the bill 'on board' and in accordance with ICC rules, indicate the date of shipment. The same applies to house bills of lading .


CLEAN AND CLAUSED BILLS OF LADING If the cargo is apparently in good order when the shipping line receives it and it is properly packed, the bill of lading which the shipping line issues is clean. By issuing clean bills of lading, the ship owner admits full liability for the cargo described in the bill. If, however, a bale is torn, a cask is leaking or some other defect is noted, a clause will be added to the bill to this effect. The bill then becomes unclean, dirty or claused. Typical clauses are: 'inadequate packaging' 'unprotected machinery' 'second-hand cases' 'wet or stained cartons' 'damaged crates' 'cartons missing' 'on deck' etc. When the export transaction is being conducted on the basis of a letter of credit, banks will refuse shipping documents bearing such clauses unless the letter of credit specifically states that they are acceptable. Where it is the custom of the trade to use second-hand packing or to ship goods unprotected or on deck, it is important that the importer's L/C application states that bills clause in this way are permitted under the L/C. The exporter should discuss this with the importer during the early stages of the sales negotiation. Although shippers have been known to acquire clean bills by signing a document which releases the shipping line from all responsibility in the event of there being a claim for damages, exporters should be wary of this practice because of its association with fraud. FREIGHT PRE-PAID AND FREIGHT COLLECT BILLS OF LADING Under, for example, a CIF contract, the exporter must always pay freight to the shipping line in advance, and the exporter thus acquires a freight pre-paid bill of lading. There are occasions, however, when the parties to the contract have agreed that the buyer shall pay the freight on arrival of the goods, e.g. under an FOB contract. The bill of lading in this instance would be a freight collect bill of lading. CHARTER PARTY AND STEAMSHIP BILL OF LADING Unlike the steamship bill of lading, the charter party bill of lading, although incorporating some of the terms of the charter party, does not contain all the essential terms of the contract of carriage. Because of this, banks will refuse to accept the charter party bill of lading under an L/C unless instructed to the contrary by the buyer. THROUGH OR TRANSHIPMENT BILL OF LADING


It is often necessary to employ two or more carriers to transport a consignment of goods to its final destination. In such cases, the transaction would become more complicated and expensive for the shipper if he had to employ an agent at the point of transshipment to arrange onward carriage. Shipping lines, therefore, issue bills of lading which cover the whole transit, and the shipper need only deal with the first carrier. Normally, a through rate is quoted in such a situation. Unless it is expressly stated in a letter of credit that the transshipment of goods is prohibited, the Uniform Customs and Practice for Documentary Credits (UCP) (1983 Revision) provides in Article 29 that "banks will accept transport documents which indicate that the goods will be transshipped, provided the entire carriage is covered by one and the same transport document." In addition, "even ~transshipment is prohibited by the terms of the credit, banks will accept transport documents which: incorporate printed clauses stating that the carrier has the right to transship, or state or indicate that transshipment will or may take place, when the credit stipulates a combined transport document, or indicates carriage from a place of taking in charge to a place of final destination by different modes of transport including a carriage by sea, provided that the entire carriage is covered by one and the same transport document, or state or indicate that the goods are in a container... and will be carried from the place of taking in charge to the place of final destination in the same container... under one and the same transport document." COMBINED TRANSPORT OR MULTIMODAL DOCUMENT (CT DOCUMENT) This document has developed with the advent of containerization, and is used for containerized cargo only. By issuing a CT document, the combined transport operator accepts full responsibility for the performance of the combined transport operation, as well as liability (according to the terms stated in the ICC's Uniform Rules for a Combined Transport Document) for loss or damage incurred during the combined transport operation. The CT document may be issued in a negotiable or non-negotiable form depending on the requirements of the parties concerned. CONTAINER BILL OF LADING If a shipping line engages in combined transport, it may issue a container bill of lading. Container bills of lading are subject to the Hague-Visby Rules which contain express provisions applying to the carriage of goods in a container, pallet or in another 32

consolidated form. All container bills of lading: are normally 'received for shipment' bills and not 'shipped on board' bills as many container terminals are situated inland adopt what is known as the network liability system, i.e. when the stage where the loss of or damage to the goods cannot be ascertained, the liability of the carrier is governed by the HagueVisby Rules state (usually in the terms and conditions printed on the reverse) that the ship owner is entitled to carry containers on deck. If, however, containers are carried on deck, the bill must be marked as such on its face , the UCP (1983 Revision) provides that under an L/C a combined transport bill of lading or similar document will be acceptable to banks unless the bank has been instructed only to accept a shipped on board marine bill of lading. STALE BILL OF LADING In order to safeguard the interests of the buyer, a bank may reject a bill of lading as 'stale'. A stale bill of lading is one which, although conforming in every other respect to the requirements of the credit, is presented so late (i.e. after the goods are due at the port) that, as a result of the delay in its presentation, the consignee could become involved in legal or administrative complications, or may be liable for additional costs, e.g. for the storage of the goods. In the UCP (1983 Revision), it is stated that transport documents must be presented to the bank within a specified period after they have been issued, and that if no period is specified, banks may refuse a transport document that is presented to them more than 21 days after the document was issued. The bank may, however, accept a stale bill of lading 'with recourse', i.e. provided the L/C so permits or provided the shipper issues an indemnity in favour of the bank or consignee for resultant loss or damage. The shipper should inform the buyer of the circumstances giving rise to the problem and obtain the buyer's consent to the stale bill. GROUPAGE BILL OF LADING/HOUSE BILL OF LADING Freight forwarders are permitted to group together or consolidate various compatible consignments from different consignors, and to dispatch the cargoes as one containerized consignment. The various consignees are usually situated at the same destination (country/area). The shipping line issues a 'master' bill of lading to the forwarder once the full container has been loaded. Because the freight forwarder cannot hand his principals 33

the shipping line's bill of lading, he issues to the individual shippers a house bill of lading. At the destination, an agent of the forwarder breaks down the consignment and distributes the goods to the various consignees subject to an original house bill of lading being produced. Because the group age operator acts as a carrier, the house bill of lading should enjoy the same status as other bills of lading. However, banks may reject it if an L/C does not specifically state that it is acceptable. The shipper selling on the basis of an L/C should ensure that his house bill is stamped 'on board' once the goods have been placed on board the vessel unless the L/C makes provision for a received for shipment bill of lading. A FIATA combined transport bill of lading can be used in the place of a forwarder's house bill of lading. The former document is recognized by the ICC, and according to the UCP (1983 Revision) will be accepted by banks in letter of credit transactions, provided the L/C does not specifically exclude it.

Sample Short Form Straight Bill of Lading Bill of Lading
TRAILER/CAR NUMBER: __________________ BILL DATE: __________________

Consignee Street Destination City/State/Zip Route:

Shipper Street Origin City/State/Zip Special Instructions:

Name Company Street City/State/Zip


REMIT C.O.D. C.O.D. AMOUNT: $ TO: ADDRESS: If this shipment is to be delivered to the consignee without recourse on the consignor, the consignor shall sign the following statement: The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges. ________________________________ (Signature of Consignor) NOTE: W here the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value of the property. The agreed or declared value of the property is hereby specifically stated by the shipper to be not exceeding $ per


 

Freight Charges are collect unless market prepaid


RECEIVED subject to the classifications and tariffs in effect on the date of the issue of this Bill of Lading, the property described above in apparent good order, except as noted (contents and condition of packages unknown), marked consigned and destined as indicated above which said carrier (the word carrier being understood through this contract as meaning any person or corporation in possession of the property under the contract) agrees to carry to its usual place of delivery as said destination. If on its route, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed as to each carrier of all or any of said property, over all or any portion of said route to destination and as to each party at any time interested in all or any said property, that every service to be performed hereunder shall be subject to all the Bill of Lading terms and conditions in the governing classification on the date of shipment. Shipper hereby certifies that he is familiar with all the Bill of Lading terms and conditions in the governing classification and the said terms and conditions.

Shipper Per

Carrier Per


Mark with “X” or “RQ” if appropriate to designate Hazardous Material s Substances as defined in the Department of Transportation Regulations governing the transportation of hazardous materials. The use of this column is an optional method for identifying hazardous materials on Bills of Lading 172.201(a)(1) (iii) of Title 4 9. Code of Federal Regulations. Also when shipping hazardous materials, the shipper' s certification statement prescribed in section 172.204(a) of the Federal Regulations, as indicated on the Bill of Lading does apply, unless a specific exception from the requirement is pro vided in t he Regulation for a particular material.

1. SHIPPER (From) - Enter the company name and address of the shipper (Consignor). 2. POINT OF ORIGIN (At) - Enter the city and state of the actual shipping point. 3. DATE OF SHIPMENT - Enter the date of the shipment; that is, the date the Carrier took control of the merchandise. 4. TRUCK/FREIGHT - Check the truck block if the shipment is to move by truck, or the Freight block if the shipment is to move by rail. 5. SHIPPER'S NUMBER - Enter a unique control number to reference the shipment with the Carrier. 6. CARRIER - Enter the name of the company which will take initial control of the shipment and cause its delivery to the consignee. 7. AGENT'S NUMBER - Enter Carrier's control number, if known or required. 8. CONSIGNED TO - Enter the full of the final recipient of the shipment, the ultimate consignee, if different than destination, for Carrier notification purposes. 9. DESTINATION - Enter the street address, city, and zip code where the Carrier will make delivery to the Consignee in Field 8.


10. ROUTE - If applicable, enter the route the Carrier will take to the consignee. This Field may also be used to specify docks, warehouses, etc., and to specify any intermediate Carriers. 11. DELIVERING CARRIER - If applicable, specify the carrier which will deliver the shipment to the ultimate consignee at the Destination, but only if different than the Carrier entered in Field 6. 12. VEHICLE/CAR NO. - Enter any vehicle identifying numbers or initials, if applicable. 13. NO. PACKAGES - Enter the total number of packages per line item; if the packages are consolidated on a pallet or in an outer container, note this information on a second line. Ex: 112 PKGS 3 Pall. 14. DESCRIPTION OF SHIPMENT - Enter the description of each line item, noting the type of package (carton, barrel, etc.) and the quantity per package. Since the correct freight classification is essential in describing an item, there must be a separate line item for each different freight classification description. If more than one type of packaging is used per freight classification, a separate entry must be used for each type of package. Enter any special package markings, special handling requirements, and delivery instructions. Note: For hazardous material items, special provisions must be met in completing this field. 15. WEIGHT - Enter the total gross weight, in pounds, for each line item. For Bulk shipments, the TARE and Net weights should also be referenced in the description field. For package shipments, include the weights of pallets and skids. The total weight of the merchandise should be shown after the last line item, with pallet and dun age weights shown separately. 16. CLASS OR RATE - Enter the 5-digit class (per the Uniform Freight Classification or the National Motor Freight Classification) or a two digit Class Rate (a percentage of the First class 100 rate) per line item. This information may be determined with the Carrier. 17. WITHOUT RECOURSE - Per standard Bill of Lading terms, the shipper is ultimately liable for freight charges, even when the shipment is sent on a collect basis to the consignee. By signing this statement, the shipper is released from the liability of freight charges for collect shipments delivered by the Carrier to the consignee without the Carrier's collecting the freight charges. For prepaid shipments, leave blank. 18. PREPAID SHIPMENTS - Enter "Prepaid" if shipment is to be paid by the Shipper. If this field is left blank, the Carrier will seek to collect the freight charges from the consignee (see field 17). 19. PREPAYMENTS RECEIVED - Carrier enters any payments received in advance from the Shipper for the shipment. 20. CHARGES ADVANCED - Carrier enters any advanced charges for the shipment, if applicable. 21. C.O.D. SHIPMENT - First, check whether the freight charges are prepaid (the Carrier bills the shipper) or collect (the Carrier deducts the freight charges from the amount 36

collected from the Consignee). Second, enter the amount to be collected for the merchandise itself - be sure to include the freight charges. Third, enter any collection fees, if applicable. Enter total charges to be collected by the Carrier. 22. SHIPMENT DECLARED VALUE - When the weight charged by the Carrier is dependent upon the value of the shipment, the dollar value per unit of measure (ex: $100/pound) must be stated by the Shipper - enter this information in field 14. 23. SHIPPER - Enter the company name of the shipper. 24. SHIPPER'S AGENT - Enter the signature of the individual preparing the shipment for the shipper. 25. CARRIER'S AGENT - The Carrier's agent will sign here prior to taking control of the shipment. 26. PERMANENT ADDRESS - Enter the permanent (business) address of the shipper. This may be the same as for field 1. 27. CERTIFICATION - A signature is required by the Department of Transportation after this statement for all shipments of hazardous material.

Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of lading can be issued. A document used in shipping goods by sea. In the case of free goods the shipping notes are the receiving note, addressed by the shipper to the chief officer of the vessel, requesting him to receive on board specified goods, and a receipt for the mate to sign, on receiving whose signature it is called the mate's receipt, and is surrendered by the shipper for the bills of lading. The mate's receipt is an acknowledgement that the ship owner has received the goods in the condition stated therein, but usually has no further legal relevance. It is usually a preliminary document only, which is later given up in return for the bill of lading, but occasionally is the only document used, in which case it may operate as if a document of title, as long as it is not marked "Non-negotiable": Kum v. Wah Tat Bank. Possession of the mate's receipt is evidence of title but it is not conclusive, so the ship owner is not bound in all cases to deliver the bill of lading to the person who delivers up


the mate's receipt. See, e.g., Nippon Yusen Kaisha v. Ramjiban Serowgee; Cowas-Jee v. Thompson. It was suggested in Pyrene v. Scindia that in some circumstances an f.o.b. seller may be required to obtain a mate's receipt and to hand it to the forwarding agent to enable him to obtain the bill of lading. A document signed by the mate of a ship as proof that the goods specified in the document have been loaded onto his ship, especially if they have been delivered direct to the ship, rather than from a quayside warehouse. The mate's receipt functions as a document of title, which may be required as proof of loading in a free on board (FOB) contract, pending the issue of the bill of lading. When goods are loaded on board ship, they are inspected by tally clerks who record the date of loading, identification marks, weight and/or measurements, the number of individual packs making up the consignment and any defect or comment about the condition in which the goods are received. A special note is made of any damage to individual packs, inadequate outer protection, ambiguous markings, etc. Once loading has been accomplished, the ship's officer in charge of the loading operations signs the mate's receipt which is based on the notes of the tally clerks and embodies any comments or qualifications made in respect of the condition of the goods received. If the mate's receipt is qualified, it is said to be claused or unclean. If it does not contain any adverse observations, it is termed clean. The qualifications on the mate's receipt are later embodied in the bill of lading which, in turn, will be either claused or clean. A signed copy of the mate's receipt is given to the shipper/his freight forwarder once the goods have been loaded on board ship, and he then exchanges this document for the original bills of lading. Representatives of the shipping line compare the contents of the mate's receipt with the contents of the draft bills of lading/shipping instruction which have been prepared by the shipper or his freight forwarder. If there are no discrepancies, the bills are dated and signed on behalf of the shipping line and are then handed over to the shipper/freight forwarder after the freight has been paid. If there are discrepancies, the bill will be claused and then signed. The full particulars of all bills of lading are entered on the ship's manifest. These include: the relevant marks and numbers, the contents and quantity of the consignment, the shipper's name, the consignee's name, and any other particulars which may be required by the consular authorities of the importing country. The ship's manifest contains the details of the total cargo carried by the ship and is a requirement of naval, port, customs and, on occasion, consular authorities.


The mates receipt consists of:          Description of packages Condition of goods loaded on the vessel Name of the vessel Date of loading Port of loading Port of delivery Name and address of the shipper ( exporter) Name and address of the consignee Other required details Mate’s receipt can be qualified or cleaned. If there are any adverse remarks by the mate of the ship as to the quality or condition of the cargo, then such mate’s receipt is known as qualified mates receipt. If there are no adverse remarks on the receipt, then such receipt is known as clean mates receipt. As far as possible the exporter should get clean mate’s receipt. Procedure to obtain mate’s receipt: After loading of the goods on board the vessel, the mate of the ship issues an acknowledgement giving the details and condition of the goods loaded on the ship. This acknowledgement is called as mate’s receipt. The mate’s receipt is then sent to the port trust office. The C & F agent pay the port trust dues and collects the mate’s receipt. It is then shown to the customs preventive officer. The CPO certifies the fact of shipment on the relevant documents. The receipt is then sent to the shipping company and copies of bill of lading are obtained. It is to be noted that mate’s receipt is just an acknowledgement and not a document title to goods.



In the present day context everything is driven by the technology. The computerization has made a dramatic improvement in the shipping process, E-Annex has been developed to automate creation of Shipping Bill (For Exports) and Bill Of Entry (For Imports) Data to be transmitted to Indian Customs, printing of Common Declaration Form and documents like Exporter’s Invoice and Packing list, Manual Shipping Bill, GSP, AEPC, COO etc. Adequate care has been taken to minimize the data entry operations. This solution has been designed to reduce human errors, to being almost non-existent, which occur during the entry of the information in the Annexure. Shipping Bill can be created by creating a new job directly in E-Annex. The job created for Shipping Bill and Bill Of Entry can be directly sent to Indian Customs via email from E-Annex. E-Annex reduces the operational cost by reducing the processing time and eliminating errors, which are very frequent when done manually. Eliminating repetitive data entry reduces the manpower cost. Thus it helps in cost reduction. Due to the adoption of computerization, one can even track the current status of the goods which are exported or imported.


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