Other Carriage Contracts

Sea Waybill

Traditionally, the contract of carriage contemplated a bit of lading being issued. In modern times, other documents have emerged which replicate some of the bill of lading’s functions.

The sea waybill is in the nature of a non-negotiable bill of lading.  It proves the terms of the contract but does not transfer title to the goods. The sea waybill is made out to a named consignee. Delivery is to be made to a named consignee, without the need for production of the waybill. In order to be available for finance, the banker must be named as a party.

It is not necessary to produce the sea waybill in order to obtain delivery of the goods. This obviates the risk that the bill of lading will not be available upon delivery.  In such circumstances, it might be otherwise necessary to give an indemnity, possibly backed by a bank, to the carrier A sea waybill may be appropriate unless the goods are resold during the course of the voyage.

The seaway bill is not a document of title.  It embodies a contract for the carriage of the goods. A waybill does not accommodate the use of letters of credit.  The waybill must be made payable to the bank, which entails certain disadvantages.

Delivery Order

Where a consignment, such as bulk cargo,  needs to be divided among several buyers, a delivery order may be used.  This is a direction by the shipper to the shipowner to deliver the designated portions of the entire consignment, to named consignees or holders of the delivery order.  There may still be a single bill of lading.

The carrier agrees on the instructions and attorns (binds itself) to the delivery order. The master signs it, and it becomes a ship’s delivery order. The attornment is a commitment on behalf of by the ship-owner to deliver in accordance with the delivery order against its production to consignee / holder.

A ship’s delivery order may transfer constructive possession of the goods. The attornment by the carrier gives title to the holder.  The ship’s delivery order then acts as a substitute for a bill of lading and may be used for payment against documents.

Variants of Bill of Lading

A combined transport bill of lading may be used where there are multiple modes of transport, e.g.  carriage by sea and road between two inland places. The bill of lading is a received for shipment bill of lading rather than a shipped bill of lading. It is not clear if it is capable of transferring title. Production of the bill is required against delivery of the goods.

The carrier may be responsible for the goods over several voyages, where there is trans-shipment from one vessel to another.

A “through” bill of lading may be used for the voyage including the trans-shipment.  In this case, the carrier is a principal in relation to one part and an agent who contracts with another for the shipper in another part of the voyage. The carrier’s liability lasts while the goods are in his possession.

Under another variation, the carrier is principal throughout the entire carriage, while other subcontractors perform part of the carriage. In this case, the bill of lading is a “combined transport” bill of lading. It may be issued by a freight forwarder, in which case it is a “received for shipment” bill of lading.

Multi-Modal Carriage

In modern times, the carrier’s responsibility often extends beyond a single sea voyage. Transshipment may take place.  Goods may be taken over at an inland depot.  The delivery may be made to another point in the country of destination.  The transport may be multimodal. Modified forms of contracts have evolved in response.

The modified contracts come in a number of variants.  The initial carrier may act as principal in relation to part and contract out with other carriers as shipper’s agent for the rest of the transit.  In this case, a through  bill of lading will be issued, which allows transhipment and provides  that the liability of the carrier ceases once the goods are no longer in its custody.

Under another form of contract, the carrier contracts as principal in relation to the entire carriage but subcontracts out other aspects.  The subcontractor contracts only with the carrier and not with the shipper/consignor.

A combined transport bill of lading may be issued by a freight forwarder.   Some such bills may achieve negotiable status by trade custom.

Container Traffic

There has been a modern trend towards containerisation. The container may belong to the shipper or may be supplied by the carrier.  The shipper may fill a container supplied by the carrier.  The shipper or carrier may transport the container from the shipper’s premises to the vessel. The same process will happen on the other end.

In containerised traffic, containers may be supplied by the carrier or shipper. A Contract made on the basis of a full container is a full container load. Full container with delivery the other end is referred to as FCL/FCL.

Where the shipper uses part of the container only, the carrier will generally pack the container with the shipper’s goods, together with those delivered by other carriers. This contract is on the basis of a less than container load (LCL).

Container Traffic Contract

Containerised traffic will often to use combined transport. Containerised goods are usually sealed in the course of the voyage. It is less easy than in traditional practice, to demonstrate that any loss or damage to particular goods was caused by the carrier. It is necessary to show that the goods were in good condition at the time the carrier took possession of them

Contain traffic may use a seaway bill or less commonly, a bill of lading as the contract of carriage. The contract will deal with the movement of the container.  It may be premises to premises, house to house/door to door on an FCL/LCL basis.  The contract may be limited to the voyage in which case it will be port to port.

Upon delivery, there may be unpacking and separation under an LCL/LCL arrangement. The contract of carriage will provide for delivery by the carrier and receipt by the consignees. The delivery may be from premises of the shipper to the premises of the consignee or on other terms. More classically, there may be pier-to-pier or port-to-port carriage.

Electronic Bill

Electronic bills have begun to replace paper bills of exchange. The electronic document interchange system is known as EDI. A public digital key is used to decrypt and authenticate the electronic bill. The Bill of lading in Europe project BOLERO contemplates the transmission of data through a central registry system operated by a body of which shipper’s, carriers, consignees and banks will be members. The body would have a system of rules governing electronic bills of lading or waybill.

A named holder to order is designated upon loading. The named party may notify the registry that it will unload the goods and it will no longer be assignable. Another member of the system may be designated in a manner equivalent to endorsement.

A pledge or security may be made through the system. A pledgee obtains the right to designate a successor. Ultimately, there is a holder to order to whom delivery must be made who is usually the end buyer who takes delivery of the goods.

References and Sources

Consumer Law  Long      2004

The Law of Transport and Road Haulage (1999) Canny

Consumer Law Rights & Regulation          Donnelly & White 2014

Commercial Law White  2nd ed    2012

Commercial & Economic Law in Ireland  White    2011

Commercial Law Forde  3rd ed    2005

UK Texts

Schmitthoff: The Law and Practice of International Trade 13th ed Carole Murray, David Holloway, Daren Timson-Hunt, Schmitthoffs 2018

Bills of Lading in Export Trade 4th ed Charles Debattista 2018

Arnould’s Law of Marine Insurance and Average 19th ed  Jonathan Gilman, Robert Merkin, Claire Blanchard, Mark Templeman 2018

O’May on Marine Insurance 2nd Ed Julian Hill 2018

Shipping Law 3rd ed  Sweet & Maxwell Ltd 2018

The UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea 2nd ed Michael Sturley, Tomotaka Fujita, Gertjan van der Ziel 2018

Commercial Maritime Law Edited by: Melis Ozdel 2018

Springer-VerlagScrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement

Scrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement (Book & eBook Pack) Scrutton on Charterparties and Bills of Lading 23rd ed: 1st Supplement (Book & eBook Pack)

Bernard Eder, Howard Bennett, Steven Berry, David Foxton, Christopher Smith 2017

The Bill of Lading: Holder Rights and Liabilities The Bill of Lading: Holder Rights and Liabilities

Frank Stevens 2017

Charterparties: Law, Practice and Emerging Legal Issues Edited by: Baris Soyer, Andrew Tettenborn 2017

Shipping and Trade Law 2017

Multimodal Transport Law Michiel Spanjaart 2017

Maritime Law 4th ed Edited by: Yvonne Baatz 2017