When the Shipper is Also the Carrier’s Agent

One of the quirks of transport documents under a letter of credit is that the same party may sometimes wear two hats — appearing as shipper of the goods and also signing the bill of lading as agent for the carrier. Does this raise a red flag under UCP 600? A reader recently asked for clarification.

QUESTION

Dear Mr. Old Man,

It is understood from the LC as follows:

• LC calls for full set original BL
• Shipper in BL – ABC Co Ltd
• Signature on BL – ABC Co Ltd as agent for the carrier Atlas Shipping Co

Is it acceptable for the shipper to also be the shipping agent on the BL?

Since the requirements of the UCP are met in terms of the signature capacity, I believe this should be fine. Would you agree?

Regards,

Rohini

______

ANSWER

Dear Rohini,

Sub-article 14(k) of UCP 600 states that “the shipper or consignor of the goods indicated on any document need not be the beneficiary of the credit.”

This means the shipper shown on a bill of lading could be the beneficiary, a freight forwarder, or even another third party, depending on how the shipment was arranged.

In your case, where the bill of lading shows ABC Co Ltd as shipper and is also signed by ABC Co Ltd as agent for the carrier, this is acceptable. It simply reflects that the same party arranged the shipment and at the same time acted as the carrier’s agent for signing purposes.

As long as the signature complies with sub-article 20(a)(i) — i.e., it makes clear it was signed by the carrier or by an agent on the carrier’s behalf — the document is compliant, regardless of whether the shipper and the carrier’s agent are the same entity.

Best regards,

Mr. Old Man