Does “Shipped on Board” Satisfy a “Clean Shipped on Board” Requirement?

Introduction

The wording used in a letter of credit can sometimes appear more demanding than the wording normally used on a transport document. This raises an interesting practical question: when an L/C requires a “clean shipped on board” bill of lading, can a B/L showing only “shipped on board” be accepted?

In this case, the shipping line’s policy does not permit the word “clean” to appear on its B/Ls. The answer lies in distinguishing the “clean” requirement from the “shipped on board” requirement.

Question

Dear Mr. Old Man,

I am currently working at a freight forwarding company and recently came across the following case.

Our customer has a shipment paid under an L/C. The L/C requires:

“FULL SET (3/3) ORIGINALS AND 3 NON-NEGOTIABLE COPIES OF CLEAN SHIPPED ON BOARD OCEAN BILLS OF LADING MADE OUT TO ORDER AND BLANK ENDORSED.”

However, according to the shipping line’s policy, they do not allow the wording “CLEAN SHIPPED ON BOARD” to appear on the B/L. They only allow “SHIPPED ON BOARD.”

In this case, would the B/L still comply with the L/C requirement if it only shows “SHIPPED ON BOARD”?

If yes, could you please advise which UCP 600 or ISBP provision I should refer to when explaining this to our customer?

If possible, I would be very grateful if you could get back to me today.

Thank you very much for your time and guidance.

Best regards,

TT

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Answer

Dear TT,

As you wish to receive my answer today, here is my quick answer.

Yes. A bill of lading showing a “Shipped on Board” notation may comply with an L/C requirement for a “clean shipped on board” bill of lading, provided that the B/L does not contain a clause or notation expressly declaring a defective condition of the goods or their packaging.

The absence of the word “clean” does not, by itself, make a bill of lading unclean.

You may refer to UCP 600 Article 27, which provides that a clean transport document is one that bears no clause or notation expressly declaring a defective condition of the goods or their packaging.

Therefore, the word “clean” does not necessarily have to appear on the B/L for it to qualify as a clean transport document.

As regards the “shipped on board” requirement, ISBP 821 paragraph E7 is particularly relevant. It states:

“Terms such as ‘Shipped in apparent good order’, ‘Laden on board’, ‘Clean on board’ or other phrases that incorporate ‘shipped’ or ‘on board’ have the same effect as the words ‘Shipped on board’.”

Accordingly, a B/L showing “Shipped on Board” does not need to include the additional word “clean” merely because the L/C uses the expression “clean shipped on board.”

In this case, therefore, the B/L should be acceptable as far as the “clean shipped on board” requirement is concerned, assuming that it contains no clause or notation indicating a defective condition of the goods or their packaging and that all other L/C requirements are complied with.

So, you may explain to your customer that:

“Clean” is a status of the bill of lading, not necessarily a wording that must appear on the bill of lading.

Best regards,

Mr. Old Man