COMBINED SHIPMENT/COMMINGLED SHIPMENT ALLOWED

QUESTION

Dear Mr. Old Man,

Our company is going to open an LC for import of soybean meal in bulk. According to the sales contract, the LC will contain the clause “Combined shipment/commingled shipment allowed”. Our bank advises us not to incorporate such a clause into the LC to avoid risks. However, their explanation is not satisfactory.

Would you tell us the risks we may face if the LC allows combined shipment/commingled shipment?

Thanks and best regards,

VCT
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ANSWER

Hi,

Combined shipment or commingled shipment refers to the case where a shipment is combined or commingled with other shipments.

Commingled shipment would occur to shipments of natural gas and oil. It would also occur to the case where goods are shipped in bulk. Where one shipment is commingled with other shipments, the consignee may not receive correct quantity ordered.

In case of commingled shipments, the carrier would exclude his liability by adding the following note or words of similar effect to the bill of lading:

“This shipment of xxx metric tons was loaded on board the vessel as part of one original lot of xxx metric tons. For the whole shipment xxx sets of bill of lading have been issued. The carrier does not assume any responsibility for the consequences of commingling or separation of the shipped goods at the time of delivery”. [ quoted from Commerzbank’s guidance no. 03/212)

If the LC allows commingled shipment, then a bill of lading with such a note is acceptable. However, it is not acceptable if the bill of lading states that goods are covered by that bill of lading plus one or more other bill of lading and that all must bills of lading must be surrendered as a condition for delivery unless all the bills of lading form part of the same presentation under the same LC (see ISBP para. 114).

It’ good news that ISBP 745 just adds G26 covering CPBL, which says:

“A CPBL is not to expressly state that goods covered by that CPBL will only released upon its surrender together with one or more other CPBLs, unless all the referenced CPBLs form part of the same presentation under the same credit. For example, “[Cargo xxx] is covered by B/L no. YYY and ZZZ, and can only be released to a single merchant upon presentation of all CPBLs” is considered to be an express statement that one or more other CPBLs, related to the referenced cargo, must be surrendered prior to the goods being released”.

I think the adding is necessary as it covers cases where goods, e.g., natural gas or oil shipped in the tanker ship or other goods shipped in bulk are covered by more than one CPBL.

I hope my explanation can help you consider whether or not to accept the clause “combined shipment/commingled shipment allowed”.

Kind regards,
Mr. Old Man