Mr Old Man Payment Q&A Are “Destination Haulage Charges Collect” a Discrepancy Under an LC? By Mr Old Man Posted on 1 hour ago 4 min read 0 0 2 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr A Practical Q&A with Mr. Old Man In trade finance, additional charges shown on a bill of lading often cause unnecessary anxiety—especially under CIF/CIP terms where the line between commercial responsibility and LC compliance can get blurry. In today’s question, Julia raises a common concern: does the notation “Destination Haulage Charge Collect” create a discrepancy? Let’s break it down. Question Dear Mr. Old Man, I have a shipment under CIP terms and the L/C requires the B/L to show: “3/3 CLEAN ON BOARD MARINE BILL OF LADING ISSUED TO THE ORDER OF ISSUING BANK, MARKED FREIGHT PREPAID WITH NOTIFY TO APPLICANT.” We complied with all LC requirements in the B/L, but it also shows: ORIGIN PORT CHARGE PREPAID SEA FREIGHT PREPAID DESTINATION CHARGE COLLECT DESTINATION HAULAGE CHARGE COLLECT In that, Destination Haulage Charge should actually be paid by us, but the B/L states “Destination Haulage Charge Collect.” Does this create a discrepancy under the LC? Looking forward to hearing from you. Best regards, Julia Truong ________ Answer Dear Julia, Under CIF/CIP Incoterms, it is standard that certain destination charges are collected at the destination. However, when such charges appear as collect on the bill of lading, this does not automatically mean the consignee must bear them. Commercial arrangements—like your agreement to pay the destination haulage—do not need to appear on the B/L and do not affect LC compliance. From a documentary examination standpoint, the decisive rule is UCP 600 sub-article 26(c), which permits a transport document to show references to charges additional to freight, by stamp or otherwise. This includes origin charges, destination charges, haulage charges, and whether they are prepaid or collect. Further guidance comes from ISBP 821 paragraph E27: E27(a) – Only when the LC explicitly states that additional costs are not acceptable must the B/L avoid indicating them. E27(b) – Such costs may be shown either explicitly or through trade terms like FI, FO, FIO, or FIOS. Since your LC does not prohibit the indication of additional costs, the notation “DESTINATION HAULAGE CHARGE COLLECT” is perfectly acceptable. Conclusion: No discrepancy arises. The B/L is compliant as presented. Best regards, Mr. Old Man