When the Bill of Lading indicates “Intended Port of Discharge”  and “Place of Delivery” — What does ISBP 821 E8(b) say?

Sometimes a Bill of Lading can make bankers frown for all the wrong reasons.

We’ve seen cases where it shows an “intended port of loading” and that’s fine under UCP 600, but what about when it shows an “intended port of discharge” instead? Does that make it discrepant?

Let’s see what happens when Durban plays both roles — as the intended port of discharge and as the place of delivery.

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Question

Dear Mr. Old Man,

Greetings. Hope this email finds you well.

Request you to please clarify the below query.

LC details:

• F44E: Any Italian Port
• F44F: Durban Port
• F44B: Durban
• Marine Bill of Lading required
• Shipment terms: EXW, Italy

The presented Bill of Lading shows Intended Port of Discharge: Durban and Place of Delivery: Durban.

ISBP mentions the case of an intended port of loading, but not an intended port of discharge.

Please advise if a discrepancy can be cited.

Regards,

Priya

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Answer

Dear Priya,

Thank you for your question.

I note that the LC provides shipment from any Italian port to Durban, with Durban stated as both the port of discharge and the place of delivery, and that the shipment term is EXW (Ex Works).

The Bill of Lading presented shows Intended Port of Discharge: Durban and Place of Delivery: Durban, and your question is whether such a Bill of Lading is discrepant.

Here is my view:

• Under EXW, the seller (beneficiary) is responsible only for making the goods available at their premises (for example, a factory or warehouse). The seller is not obliged to load the goods, arrange transport, or handle export and import formalities. Therefore, unless there is a separate arrangement under which the seller undertakes shipment on behalf of the buyer (possibly at the buyer’s cost and outside the LC), the presentation of a Bill of Lading under EXW is unusual but not impossible.
• It is correct that UCP 600 refers only to the case where a Bill of Lading shows an intended port of loading instead of the port of loading stated in the credit. The purpose of that rule is to ensure that the on-board notation evidences actual shipment from the port required in the credit. UCP 600, however, does not address the situation of an intended port of discharge.
• Nevertheless, ISBP 821 paragraph E8(b) provides helpful guidance. It states that the named port of discharge may appear in the field headed “Place of Final Destination” (or similar wording), provided there is a notation evidencing that the port of discharge is that stated under that heading. For example, when a credit requires shipment to Felixstowe but Felixstowe appears as the place of final destination instead of the port of discharge, this may be evidenced by a notation such as “Port of discharge Felixstowe.”

In the present case, the Bill of Lading shows both the Intended Port of Discharge and the Place of Delivery as Durban. Although there is no explicit notation such as “Port of discharge Durban,” the repetition of Durban in both fields clearly identifies Durban as the intended discharge and delivery port.

While a strict interpretation of ISBP 821 E8(b) could require a specific notation, in practice most banks would consider such a Bill of Lading acceptable, in this case there is no ambiguity about the port of discharge.

In my view, the Bill of Lading in question is acceptable.

Best regards,

Mr. Old Man

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Bottom line:

Even though ISBP 821 E8(b) calls for a notation linking the “Place of Delivery” to the “Port of Discharge,” when both are shown as the same port — here, Durban — it clearly identifies the discharge port. In my view,  there is no discrepancy.