Bill of Lading – An official detailed receipt given by a transport company to the person consigning goods, by which the company make itself responsible for the safe delivery of the goods to the consignee.

Breaking Bulk.- To “break bulk” is to commence to unload the cargo.

Bulk.-Cargo is said to be stowed in bulk when it is stowed loose instead of being loaded into containers.

Cargo Container.-An enclosed, permanent, reusable, nondisposable, weather tight shipping  conveyance fitted with a minimum of one door.

Chassis.-A frame with wheels with devices for locking containers on.  Come in skeletal types, parallel frame types and perimeter frame types, among others.

Consolidate.-To receive cargo, combine it with other cargoes, and load.

Pier to Pier.-The steamship company receives cargo on the pier and loads it into containers.  The cargo is then taken out of containers at the pier of discharge.

Pier to House.-The steamship company receives cargo on the pier and loads it into containers.  The cargo and container are delivered to consignee, after discharge, direct to consignee’s facility.

House to Pier.-Cargo is loaded into container at shipper’s facility, moves in container to pier and then overseas.  Cargo is removed from container at overseas pier.

House to House.-Cargo is loaded into container at shipper’s facility, moves in container to pier and then overseas. The cargo and container are delivered to consignee, after discharge, direct to consignee facility.

Customhouse Broker.-Acts as agent for the importer clearing inbound shipments through customs, arranging for entry, the payment of duties, the payment of collect freight charges, and the movement of the cargo to the door of the consignee.

Custom Entry.-To make a  Customs entry it is necessary to produce a bill of lading and an invoice covering the merchandise. Customs entry may be made for consumption, for warehousing, for transporation to an interior point for the purpose of completing Customs 

clearance; for export to a foreign country or for transportation and exportation

to a foreign country.  Estimated duties must be deposited or secured by posting

bond for payment.

Dock.-As used in trucking, that enclosed area of a truck terminal which is used for the handling of cargo on and off the trucks backed up to the doors.

Domestic Freight Forwarders and Carloaders.-Collect small and large shipments consolidate them and ship them in carload and truckload lots.  In addition to engaging trucking companies and railroads, they sometimes use the services of barge lines and utilize the inland waterways. Regulated by the Interstate Commerce Commission the domestic freight forwarder performs a through service, assuming full responsibility from point of receipt to the consignee.

Intermodal (literally “between modes”).-Used to donate ability of containers to change form rail to truck to ship in any order.

International Freight Forwarder.-From seller’s plant site to the door of the consignee, the foreign freight forwarder handles every detail of the shipment and supervises its movement .  He arranges for insurance, for transportation to the port. In the port he carries out the instructions of the letter of credit, he handles consular documentation, he prepares export declaration, certificate of origin, import permit, export license.  He books it aboard ship, prepares the bill of lading and the dock receipt and he advances the ocean freight.

Lift on/Lift off.-Term applied to vessel with

facilities for lifting containers without wheels unto and off the vessel.  

Facilities may be vessel powered or shore powered.

Non-Vessel Operating Common Carrier.-A

“carrier” defined by Maritime Law, offering an international cargo transport

service through the use of underlying carriers and under their own rate

structure in accordance with tariffs filed with the Federal Maritime Commission

in Washington. The rates filed are required to cover only in port-to-port

portion.  Specific authority for the NVOCC is given in the Code of Federal

Regulations,  Title 46, Chapter IV, Federal Maritime Commission Sub-Part B,

entitled, “Regulations Affecting Maritime Carriers and Related Activities.”

General Order 4, Amendment 1, Section 510.21 (d) states:

The term “non –vessel operating common carrier by water”

means a person who holds  Himself out by the establishment and maintenance of

tariffs, by advertisement,      solicitation, or otherwise, to provide

transportation for hire by water in interstate commerce as defined in the Act,

and in commerce from the United States as defined in paragraph (b) of the

section; assumes responsibility or has liability imposed by law for underlying

water carriers for the performance of such transportation whether or not owning

or controlling the means by which such transportation is affected.

Quay; Pier; Dock.-A berth is that of a pier

or quay used for vessel to tie-up.  The dock is the area used to discharge or

assemble cargo.

Rates.-In the transport of goods by

vessel or truck or rail, rates are set up on two bases.  They are known as

“class” rates and “commodity” rates.  A Class Rate is a rate stated, not on as

article, but on a symbol which represents many articles.

A Commodity Rate is a rate stated on a specific commodity

or description of traffic.

In a trade in which there are both class and commodity

rates, an article on which a commodity rate is stated may come within a class

description in the class rate.  Because the existence of a commodity rate

indicates that special consideration has been given to the article for rate

purposes the commodity rate takes preference over the class rate.

Whether charges in a trade are based only on commodity

rates or on both commodity and class rates, there is a catch-all description of

traffic for shipments that come under no specific description is usually “Cargo,

N.O.S.” (not otherwise specified).  This is known as a general cargo rate and is

usually higher than the rates on most commodities, for the carrier cannot know

exactly what kinds of goods “not otherwise specified” will be offered for

transportation.

The rate charged for transportation by through route is

called a “through” rate.

The rate charged for transportation over the line of one

carrier is called a “local” rate.

When the rate is the sum of the local rate of the two or

more carriers for their respective segments of the through route, plus an amount

to cover the cost of transfer at the transshipment points, such rates are called

“combination through rates.”

When the through rate is lower than the combination of

local rates, it is called a “joint rate.”   Proportional rates are those

applying on traffic originating and/or beyond the points to which such rates

apply.

Roll-on/Roll-off.-Term applied to

vessel with facilities for the trailers being driven on and off the vessel by

tractor power.

Trailer.-Used to describe a container

together with a removable chassis or bogie.

Weights and Measures:

Definitions

Gross.-The weight of the cargo plus its

packing

Net.-The weight of the cargo alone

Tare.-The weight of a packing box when

empty, container when empty.

Clean Bill of Lading. – A clean shipping

document is one which bears no superimposed clauses expressly declaring a

defective condition of the goods or packaging.

C.&F. (Cost and Freight)-(named point of

destination).  Under this term the seller quotes a price including the cost of

transportation to the named point of destination.

Under the quotation: Seller must (1) provide and pay for

transportation to name point of destination; (2) pay export taxes, or fees or

charges, if any, levied because of exportation; (3) obtain and dispatch promptly

to buyer, or his agent, clean bill of lading to name point of destination; (4)

where received-for-shipment ocean bill of lading may be tendered, be responsible

for any loss or damage, or both, until the goods have been delivered into the

custody of the ocean carrier; (5) where on-board ocean bill of lading is

required, be responsible for any or damage, or both, until the goods have been

delivered on board the vessel;(6) provide, at the buyer’s request and expense,

certificates of origin, consular invoices, or any other documents issued in the

country  of origin, or of shipment, or both, which the buyer may require for

importation of goods into the country of destination and, where necessary, for

their passage in transit through another country.

Buyer must (1) accept the documents when presented; (2)

receive goods upon arrival, handle and pay for all subsequent movement of the

goods, including taking delivery from vessel in accordance with bill of lading

clauses and terms; pay all costs of landing, including any duties, taxes, and

other expenses at named point of destination; (3) provide and pay for insurance

(4) be responsible for loss of or damage to goods, from time and place at which

seller’s obligations under (4) or (5) above have ceased; (5) pay the costs of

certificates of origin, consular invoices, or any other documents issued in the

country of origin, or of shipment, or of both, which may be required for the

importation of goods into the country of destination and, where necessary, for

their passage in transit through another country.

C.& F. Comments:

1.  For the seller’s protection, he should provide in his

contract of sale that marine    

      insurance obtained by the buyer include standard

warehouse  to warehouse coverage.

2.  The comments listed under the following C.I.F. terms in

many cases apply to C. & F.

      terms as well, and should be read and understood by

the C. & F. seller and buyer.

C.I.F. (Cost, Insurance, Freight) (name point of

destination). Under this term, the seller quotes a price including the

costs of goods, the marine insurance, and all transportation charges to the

named point of destination.  Under this quotation: Seller must (1) provide and

pay for transportation to named point of destination; (2) pay export taxes, or

other fees of charges, if any, levied because of exportation; (3) provide and

pay for marine insurance  (4) provide war risk insurance as obtainable in

seller’s market at time of shipment by buyer’s expense, unless seller has agreed

that buyer provide for war risk coverage  (5) obtain and dispatch promptly to

buyer, or his agent, clean bill of lading to named point of destination and also

insurance policy or negotiable insurance certificate; (6) where

received-for-shipment ocean bill of lading may be tendered, be responsible for

any loss or damage, or both, until the goods have been delivered into the

custody of the ocean carrier; (7) where on-board ocean bill of lading is

required, be responsible for any loss or damage, or both, until goods have been

delivered on board the vessel, (8) provide, at the buyer’s request and expense,

certificates of origin, consular invoices or any other documents issued in the

country of origin, or of shipment, or both, which the buyer may require for

importation of goods into country of destination and, where necessary,  for

their passage in transit through another country.

Buyer must (1) accept the documents when presented; (2)

receive the goods upon arrival, handle and pay for all subsequent movement of

the goods, including taking delivery from vessel in accordance with bill of

lading clauses and term; pay all costs of landing, including any duties, taxes,

and other expenses at named point of destination; (3) pay for war risk insurance

provided by seller; (4) be responsible for loss of or damage to goods, or both,

from time and place at which seller’s obligations under (6) or (7) above and

ceased; (5) pay the cost of certificates of origin, or of shipment, or both,

which may be required for importation of the goods into the country of

destination and, where necessary, for their passage in transit through another

country.

C. & F. and C.I.F. Comments:

Under C. & F. and C.I.F. Contracts there are the following

points on which the Seller and the Buyer should be in complete agreement at the

time that the contract is concluded (1) It should be agreed upon, in advance,

who is to pay for miscellaneous expenses, such as weighing or inspection

charges. (2) The quantity to be shipped on any one vessel should be agreed upon,

in advance, with a view to the Buyer’s capacity to take delivery upon arrival

and discharge of the vessel, within the free time allowed at the port of

importation. (3) Although the terms C. & F. and C. I. F. are generally

interpreted to provide that charges for consular invoices and certificates of

origin are for the account of the Buyer, and are charged separately, in many

trades these charges are included by the Seller in his price.  Hence, Seller and

Buyer should agree, in advance, whether these charges are part of the selling

price, or will be invoiced separately.  (4) The point of final destination

should be definitely known in the event the vessel discharges at a port other

than the actual destination of the goods. (5) When ocean freight space is

difficult to obtain, or forward freight contracts cannot be made at firm rates,

it is advisable that sales contracts, as an exception to regular C. & F. or C.

I. F. terms, should provide that shipment within the contract period be subject

to ocean freight space being available to the Seller, and should also provide

that changes in the cost of ocean transportation between the time of sale and

the time of shipment be for account of the buyer. (6) Normally, the Seller is

obligated to prepay the ocean freight.  In some instances, shipments are made

freight collect and the amount of the freight is deducted form the invoice

rendered by the seller.  It is necessary to be in agreement on this, in order to

avoid misunderstanding which arises from foreign exchange fluctuation that might

affect the actual cost of transportation and from interest charges that might

accrue under letter of credit financing. Hence, the Seller should always prepay

the ocean freight unless he has a specific agreement with the Buyer, in advance,

that goods can be shipped freight collect. (7) The Buyer should recognize that

he does not have the right to insist on inspection of goods prior to accepting

the documents. The Buyer should not refuse to take delivery of goods on account

of delay in the receipt of documents, provide the Seller has used due diligence

in their dispatch through the regular channels.  (8) Sellers and Buyers are

advised against including in a C. I. F. contract any indefinite clause at

variance with the obligations of a C. I. F. contract as specified in these

definitions.  There have been numerous court decisions in the United States and

other countries invalidating C. I. F. contracts because of the inclusion of

indefinite clauses.  (9) Interest charges should be included in cost

computations and should not be charged as a separate item in C. I. F.  

contracts, unless otherwise agreed upon, in advance, between the Seller and

Buyer; in which case, however, the term .  C. I. F.  and I (Cost, Insurance,

Freight, and Interest) should be used. (10) In connection with insurance under

C. I. F. sales, it is necessary that Seller and Buyer be definitely in accord

upon the following points: (a) The character of the marine insurance should be

agreed upon in so far as being W.A. (With Average) or F.P.A. (Free of Particular

Average), as well as any other special risks that are covered in specific trades

or against which the Buyer may wish individual protection.  Among the special

risks that should be considered and agreed upon between Seller and Buyer are

theft, pilferage, leakage, breakage, sweat, contact with other cargo and others

peculiar to any particular trade.  It is important that contingent or collect

freight and customs duty should be insured to cover Particular Average losses,

as well as Total Loss after arrival and entry but before delivery. (b) The

Seller is obligated to exercise ordinary care and diligence in selecting an

underwriter that is in good financial standing.  However, the risk of obtaining

settlement of insurance claims rests with the Buyer. (c) War risk insurance

under this term is to be obtained by the Seller at the expense and risk of the

Buyer. It is important that the Seller be in definite accord with the Buyer on

this point, particularly as the cost.  It is desirable that the goods be insured

against both marine and war risk with the same underwriter, so that there can be

no difficulty arising from the determination of the cause of the loss. (d)

Seller should make certain that in his marine or was risk insurance there be

included the standard protection against strikes, riots and civil commotions.

(e) Seller and Buyer should be in accord as to the insured valuation, bearing in

mind that merchandise contributes in General Average on certain bases of

valuation which differ in various trades.  It is desirable that a competent

insurance broker be consulted, in order that full value is covered and trouble

avoided.  

Ex (point of Origin)-“Ex Factory,” “Ex Mill,” “Ex

Plantation,”

“Ex Warehouse,” etc. (named point of origin). Under this

term, the price quoted applies only applies only to the point of origin, and the

seller agreed to place the goods at the disposal of the buyer at the agreed

place on the date or within the period fixed.

Under this quotation:

Seller must

(1) bear all costs and risks of the goods until such time

as buyer is obliged to take delivery thereof;

(2) render the buyer, at the buyer’s request and expense,

assistance in obtaining the documents issued in the country of origin, or of

shipment, or of both, which the buyer may require either for purposes of

exportation, or of importation.

Buyer Must

(1) take delivery of the goods as soon as they have been

placed at his disposal at the agreed place on the date or with the period fixed

 (2) pay export taxes, or other fees or charges, if any

levied because of exportation;

(3) bear all costs and risks of the goods from the time

when he is obligated to take delivery thereof;

(4) pay all costs and charges incurred in obtaining the

documents issued in the country of origin, or of shipment or of both, which may

be required either for purposes of exportation at destination.

Ex Dock-“Ex Dock (named port of importation).”

Under this term, seller quotes a price including the cost of the goods and all

additional costs necessary to place the goods on the named port of importation,

duty paid, in any.

Under this quotation:

Seller must

(1) provide and pay for transportation to named port of

importation;

(2) pay export taxes, or other fees or charges, if any,

levied because of exportation;

(3) provide and pay for marine insurance.

(4) provide and pay for war risk insurance, unless

otherwise agreed upon between the buyer and seller;

(5) be responsible for any loss or damage, or both, until

the expiration of the free time allowed on the dock at the named port of

importation;

(6) pay the costs of certificates of origin, consular

invoices, legalization of bill of lading, or any other documents issued in the

country of origin, or of shipment, or both, which the buyer may require for the

importation of goods into the country  of destination and, where necessary, for

their passage in transit through another country;

(7) pay all costs of landing, including wharfage, landing

charges, and taxes, if any;

(8) pay all costs of customs entry in the country of

importation ;

(9) pay customs duties and all taxes applicable to imports,

if any, in the country of importation, unless other wise agreed upon.

Buyer must

(1) take delivery of the goods on the dock at the named

port of importation within the free time allowed;

(2) bear the cost and risk of the foods if delivery is not

taken within the free time allowed.

Ex Dock Comments:

This term is used principally in United States import

trade. It has various modifications, such as “Ex Quay,” “Ex Pier,” etc., but it

is seldom, if ever, used in American export practice .

F.A.S. (Free Alone Side). “F.A. Vessel (named port of

shipment).” Under this term, the seller quotes a price including

delivery of the goods alongside overseas vessel and within reach of its loading

tackle.

Under this quotation:

Seller must

(1) Place goods alongside vessel or on dock designated and

provided by, or for, buyer on the date or within the period fixed; pay any heavy

lift charges, where necessary, up to this point;

(2) provide clean dock or ship’s receipt;

(3) be responsible for any loss or damage, or both, until

goods have been delivered alongside the vessel or on the dock;

(4) at the buyer’s request and expense, render assistance

in obtaining the documents issued in the country of origin, or of shipment, or

of both which the buyer may require either for purposes of exportation, or of

importation at destination.

Buyer must

(1)give seller adequate notice of name, sailing date,

loading berth of and delivery time to, the vessel

(2) handle all subsequent movement of the goods from

alongside the vessel;

    (a) arrange and pay for demurrage or storage charges,

or both, in warehouse or on wharf, where necessary.

    (b) provide and pay for insurance;

    (c) provide and pay for ocean and other transportation;

(3) pay export taxes, or other fees or charges, if any,

levied because of exportation;

(4) be responsible for any loss or damage, or both, while

the goods are on a lighter or other conveyance alongside vessel within reach of

its loading tackle, or on the dock awaiting loading, or until actually loaded on

board the vessel, and subsequent thereto;

(5) pay all costs and charges incurred in obtaining the

documents, other than clean dock or ship’s receipt, issued in the country of

origin, or of shipment, or of both, which may be required either for purposes of

exportation, or of importation at destination.

F.A.S. Comments;

1. Under F.A.S. terms, the obligation to obtain ocean

freight space, and marine and war risk insurance, rests with the buyer. Despite

the obligation on the part of the buyer, in many trades the seller obtains ocean

freight space and marine and war risk insurance and provide for shipment on

behalf of the buyer.  In others, the buyer notifies the seller to make delivery

alongside a vessel designated by the buyer and the buyer provides his own marine

and war risk insurance.  Hence, seller and buyer must have an understanding as

to whether the buyer will obtain the ocean freight space, and marine and war

risk insurance, as is his obligation, or whether the seller agrees to do this

for the buyer.

2. For the seller’s protection, he should provide is his

contract of sale that marine insurance obtained by the buyer include standard

warehouse to warehouse coverage.

F.O.B. (Free on Board).  “F.O.B. (named inland

carrier at named inland point of departure).” Under this term the price

quoted applied only at inland shipping point, and seller arranges for loading of

the goods on, or in, railway cars, trucks, lighters, barges, aircraft, or other

conveyance furnished for transportation.

Under this quotation.

Seller must

(1) place goods on, or in conveyance, or deliver to inland

carrier for loading;

(2) provide clean bill of lading or other transportation

receipt, freight collect;

(3) be responsible for any loss or damage, or both, until

goods have been placed, in or on, conveyance at loading point, and clean bill of

lading or other transportation receipt has been furnished by the carrier.

(4) at the buyer’s request and expense, render assistance

in obtaining the documents issued in the country of origin, or of shipment, or

both, which buyer may require either for purposes of exportation, or of

importation at destination.

Buyer Must

(1)be responsible for all movement of the goods from inland

point of loading and pay all transportation  costs.

(2) pay export taxes, or other fees or charges, if any,

levied because of exportation;

(3) be responsible for any loss or damage, or both,

incurred after loading at named inland point of departure.

(4) pay all costs and charges incurred in obtaining the

documents issued in the country of origin, or of shipment, or of both, which may

be required either for purposes of exportation at destination.

“F.O.B. (named inland carrier at named inland point

of departure) Freight prepaid to (named point of exportation).” Under

this term, the seller quotes a price including transportation charges to the

named point of exportation and prepays freight to named point of exportation,

without assuming responsibility for the goods after obtaining a clean bill of

lading or other transportation receipt at named inland point of departure.

Under this quotation:

Seller must

(1) assume the seller’s obligations as under F.O.B. above,

except that under (2) he must provide clean bill of lading or other

transportation receipt, freight prepaid to named point of exportation

Buyer Must

(1) Assume the same buyer’s obligations as under F.O.B.

above, except that he does not pay freight from loading point to named point of

exportation.

“F.O.B. (named inland carrier at inland point of

departure) Freight allowed to (named point).”  Under this term, the

seller quotes a price including the transportation charges to the named point,

shipping freight collect and deducting the cost of transportation, without

assuming responsibility for the goods after obtaining a clean bill of lading or

other transportation receipt at named inland of departure.  

Under this quotation:

Seller must

(1) assume the same seller’s obligation as under F.O.B.

above, but deducts from his invoice the transportation cost to named point.

Buyer must

(1)assume the buyer’s obligations as under F.O.B. above,

including payment of freight from inland loading point to named point, for which

seller has made deduction.

“F.O.B. (named inland carrier at named point of

exportation).”  Under this term, the seller quotes a price including the

costs of transportation of the goods to named point of exportation, bearing any

loss or damage, or both, incurred up to that point.

Under this quotation:

Seller must

(1) place goods, on or in conveyance, or deliver to inland

carrier for loading.

(2) provide clean bill of lading or other transportation

receipt, paying all transportation costs from loading point to named point of

exportation;

(3) be responsible for any lossor damage, or both, until

goods have arrived in, or on, inland conveyance at the named point of

exportation;

(4) render the buyer, at the buyer’s request and expense,

assistance in obtaining the documents issued in the country of origin, or of

shipment, or of both, which the buyer may require either for purposes of

exportation or of importation at destination.

Buyer must

(1) be responsible for all movement of the goods from

inland conveyance at named point  of exportation;

(2) pay export taxes, or other fees or charges, if any,

levied because of exportation;

(3) be responsible for any loss or damage, or both,

incurred after goods have arrived in or on, inland conveyance at the named point

of exportation;

(4) pay all costs and charges incurred in obtaining the

documents issued in the country of origin, or of shipment, or of both, which may

be required either for purposes of exportation, or of importation at

destination.

“F.O.B. Vessel (named port of shipment).”

Under this term, the seller quotes a price covering all expenses up to, and

including, delivery of the goods unpon the overseas vessel provided by, or for,

the buyer at the named port of shipment .

Under this quotation:

Seller must

(1) pay all charges incurred in placing goods actually on

board the vessel designated and provided by or for the buyer on the date or

within the period fixed;

(2) provide clean ship’s receipt or on-board bill of

lading;

(3) be responsible for any loss or damage or both until

goods have been placed  on board the vessel on the date or within the period

fixed;

(4) render the buyer, at the buyer’s request and expense,

assistance in obtaining the documents issued in the country of origin or of

shipment, or of both, which the buyer may require either for purposes of

exportation or of importation at destination.

Buyer must

(1) give seller adequate notice of name, sailing date,

loading berth of, and delivery time to, the vessel;

(2) bear the additional costs incurred and all risks of the

goods from the time when the seller has placed them at his disposal if the

vessel named by him fails to arrive or to load within the designated time;

(3) handle all subsequent movement of the goods to

destination;

      (a) provide and pay for insurance;

      (b) provide and pay for ocean and other

transportation;

(4) pay export taxes or other fees or charges, if any,

levied because of exportation;

(5) be responsible for any loss or damage or both,  after

goods have been loaded on board the vessel;

(6) pay all costs and charges incurred in obtaining the

documents other than clean ship’s receipt or bill of lading, issued in the

country of origin, or of shipment or of both, which may be required either for

purposes of exportation or of importation at destination.

“F.O.B. (named inland point in country of

importation)”. Under this term, the seller quotes a price including the

cost of the merchandise and all costs of transportation to the named inland

point in the country of importation.

Under this quotation:

Seller must

(1) provide and pay for all transportation to the named

inland point in the country of importation;

(2) pay export taxes, or fees or charges, if any levied

because of exportation.

(3) provide and pay for marine insurance;

(4) provide and pay for war risk insurance, unless

otherwise agreed upon between the seller and buyer;

(5) be responsible for any loss or damage or both, until

arrival of goods on conveyance at the named point in the country of importation;

(6) pay the costs of certificates of origin, consular

invoices, or any other documents issued in the country of origin, or of

shipment  or of both, which the buyer may require for the importation of goods

into the  country destination and where necessary, for their passage in transit

through another country;

(7) pay all costs of lading, including wharfage, lading

charges and taxes in any;

(8) pay all costs of customs entry in the country of

importation;

(9) pay customs duties and all taxes applicable to imports,

if any in the country of importation.

Buyer must

(1)  take prompt delivery of goods from conveyance upon

arrival at destination.

(2) bear any costs and be responsible for all loss or

damage, or both, after arrival at destination

Comments of All F.O.B. Terms. In connection

with F.O.B. terms, the following points of caution are recommended:

1.    

  The method of inland transportation, such as trucks railroad cars,

lighters, barges, or aircraft should be specified

2.    

  If any switching charges are involved during the inland transportation,

it should be agreed, in advance, whether these charges are for account of the

seller or the buyer.

3.    

  The term “F.O.B. (name port)”, without designating the exact point at

which the liability of the buyer begins, should be avoided.  The use of this

term gives rise to disputes as to the liability of the seller or the buyer in

the event of loss or damage arising while the goods are in port, and before

delivery to or on board the ocean carrier.  Misunderstandings may be avoided by

naming the specific point of delivery.

4.    

  If lighterage or trucking is required in the transfer of goods from the

inland conveyance to ship’s side and there is a cost therefore, it should be

understood, in advance, whether this cost is for account of the seller or the

buyer.

5.    

  The seller should be certain to notify the buyer of the minimum quantity

required to obtain a carload, a truckload or a barge-load freight rate.

6.    

  Under F.O.B. terms, excepting “F.O.B. (named inland point in country of

importation),” the obligation to obtain ocean freight space, and marine and war

risk insurance, rests with the buyer.  Despite this obligation on the part of

the buyer in many trades the seller obtains the ocean freight space and marine

and war risk insurance, and provides for shipment on behalf of the buyer.  

Hence, seller and buyer must have an understanding as to whether the buyer will

obtain the ocean freight space, and marine and war risk insurance, as is his

obligation or whether the seller agrees to do this for the buyer.

7.    

  For the seller’s protection, he should provide in his contract of sale

that marine insurance obtained by the buyer include standard warehouse to

warehouse coverage.

Negotiability and

Assignability.   It may be said at the outset that negotiability is used

in the same that the bill of lading, drawn to order and endorsed in blank with

the name of the consignor and sold for value to a bona fide purchaser who has no

notice of any infirmity in the goods or in document, confers on the purchaser

not merely all the right which the consignor possessed, but a right possibly

superior, to the extent that the purchaser is not bound by any concealed or

undisclosed knowledge in the possession of the consignor. Thus a bona fide

purchaser of an endorsed “order” bill of lading which is “clean” is not bound by

any arrangements between the consignor and the carrier as to the goods being

actually in bad order and covered by some sort of a “letter of indemnity.”

Assignability, on the other hand,

means only that the purchaser acquires such rights-disclosed or concealed-as the

seller has.  “Order” bills are seldom assigned, although a restricted transfer

is possible.  “Straight” bill of lading on the contrary are only transmissible

by assignment; they cannot be negotiated, because by definition they are not

drawn to “order.”  A business man wishing to avoid the broader perils of a

negotiable bill of lading should use the “straight” form, keeping control more

securely in his own hands.

“Order” Bill of Lading.  

In these days, almost all ocean bills of lading are “order” bills of lading;

they state that the carrier, ship-owner, charterer or master and/or ship will

deliver the goods at the port of destination not merely to the name consignee,

but to his order,  The word “order” means that the bill of lading is more than

the ship’s receipt for the goods, more than the contract to carry the goods; it

possesses, by reason of the words “to the order of” a named party, a third and

highly legal and commercially important characteristic-namely, it becomes a

document of title. In the United States the Pomerene Act expressly states in

section 3 that “a bill in which it is stated that the goods are consigned or

destined to the order of any person named in such bill is an order bill.”

And for good measure the statute

adds:

“Any provision in such a bill or

any notice, contract, rule, regulation, or tariff that it is nonnegotiable shall

be null and void and shall not affect it is nonnegotiable within the meaning of

this Act unless upon its face and in writing agreed to by the shipper.”

In some countries the same

proposition is established by case law. Thus the legal ownership-the property

interest in the goods described can be transferred form the named consignee to

any other persons whatsoever and by them still other persons without any of

these persons ever seeing the goods or having the goods in their physical

possession.   This transfer of possession is accomplished initially merely by

the written

Signature of the named

consignee-his name written on the bill of lading.

Once so endorsed, the bill may

pass from hand to hand, and needs no further endorsement until the holder

present it to the carrier at the port of destination and  demands his goods.

This means that all the endorsees

and holder for value are legally entitled to reply upon the tally and upon the

statements of apparent (good) order and condition”  in the bill as true;  They

may in the United States hold the carrier and also (except under various

chartering circumstances)  hold the ship liable for their loss if the statements

are not true.