Home Mr Old Man PARTIAL SHIPMENTS UNDER SUB-ARTICLE 31 (B)

PARTIAL SHIPMENTS UNDER SUB-ARTICLE 31 (B)

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QUESTION

Dear Mr. Old Man,

LC does not allow partial shipments.

Documents were presented to the issuing bank in two separate covering schedules. The first set reached the issuing bank’s counter on 5 October, 2015 and the second set on 8 October, 2015.  However, the bills of lading in the two sets showed goods were shipped on the same vessel for the same journey and destination.

Can we (the issuing bank) refuse the documents stating the discrepancy “partial shipments”?

Thank you in advance.

Best regards,

TT

—-

ANSWER

Hi,

I ever gave my answer to the same question a few years ago.

According to UCP 600 sub-article 31 (b), A PRESENTATION consisting of more than one set of transport documents evidencing shipment commencing on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering a partial shipment, even if they indicate different dates of shipment or different ports of loading, places of taking in charge or dispatch…

The documents in your case were presented to your bank in two separate presentations with two separate covering schedules for separate drawings. Therefore, you can refuse both presentations for the same discrepancy “partial shipments” notwithstanding that the bills of lading show shipment made on the same vessel, the same journey and for the same destination.

If the presenting bank rejects the discrepancy, you may draw its attention to the word “A PRESENATION” in sub-article 31 (b), which means a single presentation, not two or more separate presentations..

I have recently come across the same topic on www.linkedin.com . Some experts opine that it should be acceptable if the two sets of documents are presented separately but there is a cross reference or a link between the two covering schedules stating that the documents presented under the two covering schedules constitute one single presentation. This view is worth noting. For your reference, here is the link:

https://www.linkedin.com/grp/post/3709833-6060093153988403201

Kind regards,

Mr. Old Man

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15 Comments

  1. Alex

    October 26, 2015 at 10:50 am

    Dear Mr. Old Man,

    I have 3 questions pertaining to Partial Shipment as defined under article 31 of UCP600.

    Base on UCP600 article 31, if there is more than 1 set of BL submitted for presentation, so long all the BL set shows same means of conveyance, same journey and same destination, it is not partial shipment even there is more than one port of loading or shipment date.
    I understand the same mean of conveyance part, but don’t quite understand same journey and same destination.
    As i interpreted article 31, same journey can’t be defined as having the exact same load port (since article 31 already mentioned there can be more than one load port and not be considered partial shipment). Same journey also can’t be defined by having the same shipment date (since article 31 also mentioned that there can different shipment date and not be considered partial shipment).

    (1)So what is exactly “SAME JOURNEY”?

    My next question is regarding the definition of “SAME DESTINATION”. A documentary credit name load port as “NEW YORK PORT” and name discharge port as “ONE OR MORE SAFE PORT(S) IN CHINA”. 2 set of BL has been received under one single presentation by the nominated bank. The first set of BL stated load port as “NEW YORK PORT” and discharge port as “BEIJING PORT”. The second set of BL stated load port as “NEW YORK PORT” and discharge port as “SHANGHAI PORT”. The vessel name on both set of BL is exactly the same.

    (2) Does this constitute a partial shipment?

    My last question is with regards to UCP600 article 19 which elaborated on multimodal transport document. I understand multimodal transport document to means the involvement of at least 2 different modes of transportation from the place of taking in-charge/dispatch/shipment to the place of discharge/destination. I also understand that if in a single presentation more than one set of multimodal transport documents is received, so long as all the multimodal transport document presented reflect the same means of conveyance, same journey and same destination, then it would be constituted as partial shipment.
    Multimodal transport document set A: Cargo transported by truck (serial number: 1234) to load port and then loaded onto a vessel (Vessel name: MT FAIRLADY) which then deliver the cargo to destination as per DLC.
    Multimodal transport document set B: Cargo transported by truck (serial number: 4567) to load port and then loaded onto vessel (vessel name: MT FAIRLADY) which then deliver the cargo to destination as per DLC.

    (3) Does the above constitute partial shipment?

    I hope you can enlighten me with your valuable insight and experience.

    Thanks.

    Reply

    • mroldman

      October 27, 2015 at 9:56 am

      Dear Alex,
      Thank you for sending me your questions. They are excellent questions, in deed!
      Instead of giving my own answer, this time I would like to pass your excellent questions to our Trade Services Update editors for their comments which will be forwarded to you soon.
      Kind regards,

      Reply

    • mroldman

      October 28, 2015 at 3:15 pm

      Hi,

      I referred your questions to our Trade Services Update Newsletter’s editors and received the same point of view as follows:

      1) Same journey under Article 31 means same means of conveyance for the same destination.
      2) Yes, it is a partial shipment.
      Sub-article 31 (b) refers to shipments to the same destination (as opposed to different destinations) not being treated as a partial shipment.
      3) Yes, it is a partial shipment. The first leg covers shipment by two separate trucks constitutes a partial shipment.

      Kind regards,
      Mr. Old Man

      P/s: Full discussion will be posted when the Q&A is published in Trade Services Update Newsletter

      Reply

  2. Alex Soon

    November 2, 2015 at 10:45 pm

    Dear Mr. Old Man:

    ISBP745 D7
    “When a credit requires shipment to commence from a port, i.e., when the first leg of the journey, as required by the credit, is by sea, a multimodal transport document is to indicate a dated on board notation, and in this event paragraph E6 (b-d) will also apply.”

    I don’t understand why should a multimodal transport document such as multimodal BL indicate a dated on board notation if the 1st leg of the carriage is by sea. Does ISBP articl D7 imply that if the 1st leg of carriage is by sea, then the date of issuance of the multimodal BL will definitely not be the actual shipment date and hence the need for a dated on-board notation? What if the multimodal BL is pre-printed with the wordings “SHIPPED ON BOARD”?

    From my understanding, a dated on-board notation is only required if (1) Place of receipt indicated on BL is the name port of loading stated in documentary credit; dated on board notation to state explicitly name of port of loading as stated in documentary credit. (2) Place of final destination indicated on BL is the name port of discharge stated in documentary credit; dated on board notation to state explicitly name of port of discharge as stated in documentary credit. (3) When documentary credit explicitly called for dated on-board notation. (4) When date of issuance of multimodal transport BL is not the actual shipment date.

    Reply

    • mroldman

      November 3, 2015 at 10:07 am

      ANSWER
      Hi
      ISBP 745 D7 is an explanation of UCP 600 sub-article 19 (a) (ii).
      The words “dispatched, taken in charge or shipped on board” in Article 19 cover various forms of transport, i.e. “dispatched” refers to transport by air, taken in charge refers to transport by road and shipped on board refers to transport by sea. So, if the first leg of the journey by sea, i.e. starting at a port of loading, then “shipped on board notation” is required.
      According to ICC Banking Commission Recommendations in respect of On Board Notations, Article 19 does not require an on board notation as a default position for most of the time. However, an on board notation is required when the LC so requests. It also requires when the LC requires shipment to be effected from a sea port, i.e. by sea, to the place of final destination. If a MMTD evidences a place of receipt that is different from the place stated in the LC, and that place stated in the LC is a port, the dated on board notation will require the addition of the name of the vessel and port of loading, unless the MMTD evidences that the on board notation or pre-printed shipped on board wording applies to the named vessel and port of loading. The key, therefore, is for the LC either:
      (a) to expressly require an on board notation, or absent that;
      (b) to make clear whether the place from which the goods are to be taken in charge by the carrier is a sea port.
      Kind regards,
      Mr. Old Man

      Reply

      • Alex

        November 4, 2015 at 10:46 am

        Dear Mr Old Man:

        I have read through the Banking commission opinions regarding on-board notation and also ISBP D7.

        I had come out with 3 possible scenario:

        I understand a multimodal transport documents such as the multimodal bill of lading consists of fields – Place of receipt, Load port, Place of final destination, Discharge port etc.

        Documentary credit field 44E Port of loading read as “Busan Port”, 44F Port of discharge read as “New York Port” and field 44B Place of disport: “XYZ warehouse, New York”.

        Scenario 1: Multimodal BL field “Port of loading” read as “Busan Port”. Action required: Make sure face of multimodal BL have a dated on-board notation.

        Scenario 2: Multimodal BL field “Port of Loading” read as “Daesan Port” and field “Place of receipt” left blank or state a different place such as “ABC WAREHOUSE”.. Action required: Check for any pre-printed wording such as “SHIPPED ON BOARD” or any on-board notation on face of multimodal BL.

        If there is NO on-board notation (no indication of pre-carriage) but just the pre-printed wording “SHIPPED ON BOARD” then can safely assume the pre-printed wording refer cargo loaded onboard the named vessel and the named port of loading (as per field 44E). For this, only a dated on boad notation will be required.

        If there is pre-printed wording “SHIPPED ON BOARD” and also on-board notation stating a different port of loading from field 44E, then multimodal BL needs to be stamped with a dated onboard notation accompanied by name of vessel and name of port of loading as per field 44E.

        If there is already a dated onboard notation indicating name of load port as per field 44E Busan Port of DLC, then no action required.

        Scenario 3: Multimodal BL field “Port of Loading” left blank” and field “Place of receipt” read as “Busan Port”. Multimodal BL need to have a dated onboard notation accompanied by name of vessl and name of load port as per field 44E Busan Port.

        Is my intrepretation of the 3 scenario correct?

        Thanks.

        Reply

        • mroldman

          November 4, 2015 at 7:10 pm

          Hi,

          You are recommended to refer to Bill of Lading Flowchart in ICC Banking Commission Recommendations on On Board Notations (Document 470/1128rev final).

          Based on the above mentioned flowchart, I would like to answer your questions as follows:

          Scenery 1:
          For MMTD with or without a place of receipt and NO indication of pre-carriage, a dated on board is required

          Scenery 2:
          According to ISBP 745 D9, a MMTD is to indicate the place of receipt, dispatch, taking in charge, port of loading or airport of departure stated in the LC. The MMTD is discrepant as the port of lading indicated is that stated in the LC (Deasan Port instead of Busan Port).

          Assuming that the MMTD shows Busan Port as Port of Loading, a dated shipped on board is required.

          Article 19 does not say anything about the case where a MMTD does not indicate the port of lading stated in the LC as the port of loading, but based on sub-article 20 (a)(iii), the MMTD in question it is acceptable if it bears an board notation indicating the port of loading as stated in the LC, the date of shipment and the name of the vessel.

          Scenery 3:
          Agreed with you.

          Kind regards,
          Mr. Old Man

          Reply

      • Alex Soon

        November 4, 2015 at 11:33 pm

        Dear Mr Old Man:

        So the whole idea is to make sure the named port of loading in documentary credit is mentioned inside the multimodal BL. It can be mentioned under place of receipt field, port of loading field, or indicated as an on-board notation.

        Same for port of discharge or place of final destination in documentary credit, they are to be mentioned in multimodal BL either under place of final destination field, port of discharge field or indicated as an on-board notation.

        I am still puzzled by one last part quoted below:

        “If a MMTD evidences a place of receipt that is different from the place stated in the LC, and that place stated in the LC is a port, the dated on board notation will require the addition of the name of the vessel and port of loading, unless the MMTD evidences that the on board notation or pre-printed shipped on board wording applies to the named vessel and port of loading. ”

        I understand everything except for the line reading “….or pre-printed shipped on board wording applies to the named vessel and port of loading” above.

        If a multimodal BL have the pre-printed wordings “SHIPPED ON BOARD”, how do i know if it refers to cargo loaded on board at the port of loading stipulated by documentary credit field 44E?

        Reply

        • mroldman

          November 5, 2015 at 7:54 am

          If there is no indication of any pre-carriage, then the pre-printed on board notation is applicable to the vessel and the port of loading named on the MMTD. The date of issue is deemed to be the shipped on board date.

          Reply

      • Alex Soon

        November 5, 2015 at 7:06 pm

        Dear Mr Old Man:

        Understood the part on pre-printed wording “SHIPPED ON BOARD” referring to cargo loaded on board named vessel at named port of loading stated on MMTD.

        In such case, where there is the pre-printed “shipped on board” wording and no sign of pre-carriage on MMTD, if the port of loading mentioned on the MMTD is different from field 44E, then the bill of lading would be consider discrepant as it had failed to mention port of loading provided under field 44E of LC?

        Also, i would guess that if port of loading on MMTD is as per field 44E, and MMTD is pre-printed with “SHIPPED ON BOARD” wordings with no indication of pre-carriage, then there is no need for a dated on board notation (date of issue of MMTD is shipment date). If MMTD have a dated on board notation in addition to pre-printed wordings, then the dated on board notation date will be taken to be the shipment date.

        Many Thanks.

        Reply

  3. M.C

    June 21, 2016 at 11:49 am

    HI

    As per discussion, can we understand: partial shipment: more than one means of conveyance – same mode of transport (more than one vessel). If a MMTD shows different modes: truck in place of receipt, vessel in port of loading –> it is not partial shipment

    Reply

    • mroldman

      June 21, 2016 at 3:16 pm

      Agreed not partial shipments

      Reply

  4. Quynh

    September 5, 2016 at 7:04 pm

    Dear Mr old man

    Sorry for revisiting the article again, we are a bit confused for this article. Whether 30(b) does not include transhipment. Same means of vessels, same journey, same destination –> not regarded as partial shipment. But if there is transhipment during the journey, whether we can still treat it not partial shipment

    Highly appreciate to receive your feedback

    Quynh

    Reply

    • mroldman

      September 6, 2016 at 4:50 pm

      It is not partial shipment even the transport documents indicate transhipment which is not prohibited by the LC provided that the transport document evidences shipment commencing on the same means of conveyance and for the same journey, the same destination.

      Reply

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