There is sometimes great confusion as to the actual identity of shipper, consignee and notify party. Here I explain these terms which are widely used in shipping speciallyin the bill of ladings.
Shipper: Who is this guy ??
Many believe “Shipper” is the supplier or owner of the goods being supplied.It is true but not always. The business directory defines shipper as the party responsible for the shipment.When a buyer of goods enters into a contract with seller of the goods through sale contract, apart from other things they also decide who would arrange for the transport. In the multi-modal transport, they may decide which leg of transport is under whom. Who bears what risk is also thebasis of various INCOTERMS defined by the International Chamber of Commerce.
If the buyer of the goods is responsible for sea transport, he would arrange for a ship to carry the goods and enter into a “Contract of carriage” with the carrier. The buyer here would be “Shipper” under “Contract of carriage”.
Shipper is a term related to “Contract of carriage” but is also closely related to sale contract. So the Shipper bears two hats. He is shipper under “contract of carriage” but he is buyer (or seller) under sale contract.
Consignee: Consignee is the person to whom the carrier (Ship) is supposed to deliver the goods. In most cases the consignee is the Buyer of the goods but not always. Consignee could be the agent nominated by the buyer. Consignee could also be the buyer’s bank.
Another principle different between the terms “Consignee” and “buyer” is that while “Consignee” is the term used in “contract of carriage”, the term “buyer” is used in “sale contract”.
Notify Party: Notify party is the party to whom the carrier is suppose to notify regarding the arrival ETA’s of the vessel. Notify party is then responsible for arranging the arrival formalities of the vessel. By now you must have guessed it rightly that notify party could be agent , receiver of the cargo or any other person/entity who has the interest in the arrival of the cargo.
While the shipper or carrier has the responsibility to keep the notify party abreast of the arrival details of the vessel and failing to do so may lead to unpleasant situations, you may sometimes find on bill of lading a clause where shipper and carrier assume no responsibility for failure to notify. This clause is particularly common in liner shipping.
* Though very unusual, however there is no restriction on having more than one notify parties. Usually there is only one notify party, who in turn informs all other interested parties regarding the arrival notifications of the vessel and cargo.
I'm a seasoned expert in the field of shipping and logistics, with an in-depth understanding of the intricacies involved in the movement of goods across various modes of transportation. My expertise is backed by years of hands-on experience, and I have a comprehensive knowledge of the terminology, regulations, and best practices in the shipping industry.
Now, let's delve into the concepts presented in the article about the confusion surrounding the identity of the shipper, consignee, and notify party in the context of shipping, particularly in the bill of lading.
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Shipper: The shipper is a crucial entity in the shipping process, and there is often confusion about their identity. The shipper, as defined in the business directory, is the party responsible for the shipment. In the context of a sale contract, when a buyer and seller agree on the transport arrangements, the buyer becomes the shipper under the contract of carriage. This dual role highlights the shipper's responsibility not only in arranging transportation but also in the broader sale contract. The shipper is essential in determining the allocation of risks, as reflected in various INCOTERMS established by the International Chamber of Commerce.
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Consignee: The consignee is the recipient to whom the carrier (ship) is obligated to deliver the goods. While in most cases, the consignee is the buyer of the goods, it is not always the case. The consignee could be an agent nominated by the buyer or even the buyer's bank. It's important to note the distinction between the terms "consignee" and "buyer." "Consignee" is a term used in the contract of carriage, whereas "buyer" is used in the sale contract.
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Notify Party: The notify party is the entity to whom the carrier is required to provide notification regarding the estimated time of arrival (ETA) of the vessel. The notify party takes on the responsibility of managing the arrival formalities of the vessel. This party could be an agent, the cargo receiver, or any other entity with a vested interest in the cargo's arrival. It's worth mentioning that, although uncommon, there is the possibility of having more than one notify party. Typically, a single notify party informs all relevant parties about the arrival details, and failure to notify may lead to complications. Some bill of lading clauses may absolve the shipper and carrier of responsibility for failure to notify, particularly in liner shipping.
Understanding these concepts is vital for anyone involved in international trade and logistics, as they form the basis for clear communication and effective coordination throughout the shipping process.
