Can the Beneficiary Be Both Shipper and Agent for the Carrier?

In documentary credit practice, it is not uncommon to see situations where the same party appears in more than one capacity on a bill of lading. A recent reader raised the question whether a seller under an LC (the beneficiary) could also act as the shipper and at the same time sign the bill of lading as agent for the carrier.

Below is a discussion between Domenico and Mr. Old Man:

Domenico:

Dear Nguyen,

I read your post with interest: When the Shipper Is Also the Carrier’s Agent and, of course, I agree with your response.

My question is: would the response have been the same if the shipper on the BL had been the beneficiary of the LC, i.e., the seller of the goods in the transaction?

I look forward to your reply.

Thank you and have a great day,

Domenico

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Mr. Old Man

Dear Domenico,

Yes, the answer remains the same.

UCP 600 contains no provision that prevents the beneficiary (the seller) from being both the shipper and the agent of the carrier. What matters is that the bill of lading clearly indicates the capacity in which the signature is made — for example, “as agent for the carrier.”

In bulk shipments under CIF terms, the seller is often responsible for arranging the vessel and may act as the charterer. In such cases, the charter party bill of lading may indeed show the beneficiary as both shipper and charterer who issues the bill of lading.

For a related discussion, you may also find this useful: https://mroldman.net/can-a-beneficiary-be-the-charterer-under-fob/

Best regards,

Mr. Old Man

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Domenico:

…therefore, a beneficiary could add a correction on a transport document by acting as the carrier’s agent…

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Mr. Old Man:

When the beneficiary signs the bill of lading as agent for the carrier, any corrections on the BL can be approved in that same capacity — as agent for the carrier, not as the beneficiary.

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Demenico:

Even if the point E24 of ISBP??

E24) Any correction of data on a bill of lading is to be authenticated. Such authentication is to appear to have been made by the carrier, master (captain) or any one of their named agents, who may be different from the agent that may have issued or signed a bill of lading, provided they are identified as an agent of the carrier or the master (captain).

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Mr. Old Man:

Yes, corrections can be approved by the carrier and or any its agent including the beneficiary in this case. However, if the beneficiary approves the corrections, he should be recognized as the agent for the carrier, not as the beneficiary.

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Domenico:

Thank you very much! I’m afraid, however, that some banks might raise discrepancy, contesting to the beneficiary—given the nature of their business—that they cannot qualify as an agent of the carrier. It is true that there is the principle of “on the basis of the document alone”… but…

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Mr. Old Man:

You are right that in practice some banks may raise such a discrepancy. However, as you mentioned, the principle under UCP is examination “on the basis of the documents alone.”

A bank is not entitled to reject a document based on assumptions about the beneficiary’s line of business or whether they could realistically act as the carrier’s agent.

Unless there is something in the documents themselves that creates a conflict or ambiguity, such a discrepancy would go beyond what UCP or ISBP allow.