QUESTION :
We have exported goods as per LC direction. We have submitted 3 OBL +Invoices+Packing lists in bank.Bank has dispatch the documents to buyer bank.
Buyer told us that we have to send one original BL to the destination of port of discharge,But we have already send all 3 OBL to bank and they have dispatched it to them. We have received the acceptance message for LC as well.
They goods are reached at destination port and demurrage has been started now our Buyer requesting asking that we should ask our shipping agent to send express release message to port of discharge for the release of goods.
Please suggest how we can ask the shipping company to send express message for the release of goods and what are terms?
Malik
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Malik, whenever there is an LC involved, there will be a bank involved and invariably the Original Bill of Lading will be consigned To order of XYZ Bank.. Your role as a Shipper is to export the goods as per the contract, prepare the documentation as per the LC requirement and submit to the bank, which you have done in this case..
There is no limitation on number of original bills of lading issued.. In your case, 3 originals have been issued..
Irrespective of number of bills of lading issued, if a Negotiable bill of lading has been issued, upon surrender of 1 duly discharged original bill of lading to the shipping line/agent at destination in exchange for the good or delivery order, all other bills of lading issued will be considered null and void.. 
So in your case, all 3 originals have been sent to the bank, but your customer at destination is requesting for an Express Release message for the release of the goods.. As this shipment is covered by an LC and the bill of lading that is issued is a negotiable bill of lading, it is NOT POSSIBLE for the shipping line to issue an Express Release for the same.. The shipping line has fulfilled its obligation..
Its between the Issuing bank and Confirming bank to discuss between themselves the reasons for the delay in the release of the Original Bills of Lading and arrange for at least one of those originals to be surrendered to the shipping line/agent at destination for the release of the cargo..
Alternatively the bank that is holding up the processing or release of the Original Bill of Lading must issue a bank guarantee to the shipping line/agent at destination for the release of the cargo without production of Original Bill of Lading..
Thanks a lot, sir!
I also have the same situation with shipments against LCs. actually we are importer, all shipments are against LC. transit time between POL & POD is very short lets say 9 days & from some POL its 14 days. Cargo is reefer cargo. Bank negotiation of documents takes time. the whole process takes minimum 25 to 30 days. Ultimately we are landing up in paying huge dammarages. how can i get out of such a costly situation ? Please advise. what is the ulternative aside to bank guarantee. ???
Malik, please advise what happened in this case. It will be interesting to know.
My thoughts
– Since this shipment is covered under LC and the opening bank has provided their acceptance, the opening bank is liable to pay you, irrespective of your buyer pay them or not.
– When the shipment is covered under a LC, you deal with the LC opening bank and not the buyer.
– The fact that the opening bank has given their acceptance means that your documents are perfect and there is no discrepancy. Hence they are bound to pay on the due dates even if the buyer does not pay them
– The only guess buyer is asking to for one set of OBL is that they are unable to release the documents from the bank, (for whatever reason-could be credit related, past dues- banks normally hold and do not release the documents to buyer in such case) and they want to take the goods without paying the bank.
– Since they need the goods urgently they have requested you to send the one set of OBL. In case you send the OBL (which does not happen as the shipping company will not issue further OBL) you will be responsible for the release of the goods
Mahess ,
As per UCP600 , Refusal note is to be prepared by bank within 5-days (excluding the date of receipt of documents)
iF
If i am not wrong the consignee can approach the shipping line with bank guarantee for releasing the cargo. Hope this way it can be done.
I am looking for our companies HS Code for export of Macadamia Processing Machinery in a knock-down form.
Hi,
This is very difficult situation. Could be possible but shipping line could also ask for a bank garantee for the value of the cargo. Dont forget having a LC the consignee on OBL will be the opening bank not the importer.
For the future shipment, issuing original HBL will be easier to control. So, you can always issue express/telex release on the MBL.
Hi Ana, your suggestion is not entirely right.. The simple reason is that a HBL can also be a Negotiable Document and the client could face a similar situation if that document is surrendered to the bank and a release is sought.. In the case of MBL yes you can get an Express Release, but when there is a HBL issued, generally the MBL wont be the releasing document..
If the buyer has opened an LC, he cannot expect to secure a release of cargo in any way other than receiving the original from their bank after negotiation and surrendering that to the shipping line for release.. Either that or the issuing bank should issue a Bank Guarantee/LOI to the shipping line for release of the cargo without OBL pending the sorting out of whatever issue that is holding up the release of the OBL..
Exporters/shippers have submitted, as per LC instructions, 3 OBL +Invoices+Packing lists in the bank.
The only way to receivers/notify party to receive cargo is to present either one original BL duly endorsed by the bank or a receivers bank garantie (the bank mentioned as consignee on the BL).
Hope above self explanatory.
Regards / Maan
Hi!
The issue involved here is quite interesting. There is a time limit of 7 days under UCP600 for the bank to reject the documents. But, there is no time limit to release documents to the applicant (buyer), as I know the UCP600.
The delay could be for many reasons, but mainly due to:
1. The applicant’s delay remitting full amount of LC.
2. Loss of documents at any stage in the transit or processing.
3. The ‘nominated bank’ being away from the POD where the BOL is actually to be surrendered and the documents has to travel to another ‘presenting bank’ at POD.
Normally, when seller has to also ship the cargo and the time between ETD and ETA is narrow, the LC could be finalized with ‘nominated bank’ at POD itself.
With regards,
Mahess
No you cannot, that’s not legal.
But Subject to liners discretion, under Bank release order.
Sent on my BlackBerry® from Vodafone
Good Read !! My own 2 cents below.
Generally speaking , a work around to avoid these situations should be as below.
1. Structure the LC such that only 1 original BoL and 2 copies are attached for payment processing ,so that the payment process and shipment clearance using the other 2 BoL’s are de-linked.
2. Assuming the shipment takes about ‘x’ days to reach destination , the beneficiary should ensure that this ‘x’ days is sufficient for the payment processing to take place and original BoL reaching destination for shipment clearance. If there are discrepancies in the documents then there is every possibility of demurrage accumulation before the discrepancies can be cleared – payment effected and docs handed over for shipment clearing.This situation can be sort of partly resolved if we have negotiated with the shipping liner for at least 14 – 21 “demurage free days”.
Hope this helps.
Regards
Basskar