The business of global transportation has many intricacies and variables in its operations, with ocean transportation particularly known for its varied shipping operations, handling of various cargo types, and documentary requirements..
Documents before sale, documents during contract negotiations, documents before packing, documents after packing, documents before shipping, documents during shipping, documents after shipping, documents before payment, documents for payments, documents during payments, documents after payment…………………. you get the drift..
So it is natural for many people, even those in the business, to be a bit overwhelmed with all these documents, and especially since much of the information in all these documents is repeated..
One such document that is used mainly and especially in break bulk and bulk trades is the Mate’s Receipt.. In my recent #FreightdayFact, I clarified the origin of the term Mate’s Receipt, so not repeating it here..
Any cargo loaded on board bulk or break-bulk ships is given a receipt as proof of its acceptance on board the ship.. This receipt is signed by the First Mate, who is in charge of cargo operations on board and hence the term “Mate’s Receipt”..
A Mate’s Receipt, as standardised by BIMCO, looks like below..
As you can see, it is quite similar to the details on a bill of lading (example BIMCO’s CONGENBILL 2022), which may be the reason for some confusion..
But this is where the similarity ends..
While the Mate’s Receipt may be used to demand the issuance of a Bill of Lading, the Mate’s Receipt is just a “receipt” of the goods, compared to a Bill of Ladin,g which is
- A transport document
- Evidence of the contract of carriage or a contract of carriage, depending on the type of contract
- Document of Title to the goods
- Receipt of cargo
Why is a Mate’s Receipt important..??
The Mate’s Receipt does not just say “we got your cargo”.. It also notes the condition of the cargo at the time of loading..
For example, if steel bars are rusty or bags are torn, those remarks are recorded on the receipt.. If no issues are noted, the cargo is marked as “Clean”..
This small note has a big consequence:
- A clean Mate’s Receipt allows the carrier to issue a Clean Bill of Lading, making it compliant with Letters of Credit and claim-free delivery..
- A claused Mate’s Receipt (showing damage or defects) results in a “claused Bill of Lading”, which can complicate sales contracts, bank negotiations, and payments..
- Not just for “Clean, on board”, a Mate’s Receipt is also used to record the “quantity” of goods received on board.. As an example, if 190 bundles of steel bars were received but the Bill of Lading is issued as 200 bundles of steel bars, there is obviously a claim lodged at destination, in which case, the Mate’s Receipt quantity will generally prevail as it has been signed by the First Mate..
If you are wondering why the Out-turn reports by the ports and terminals are not used for the same purpose, in the past, the loading and discharging operations were carried out using the ship’s cranes and crews, and therefore the liability and onus was on the ship to record the correct quantity loaded on board..
In modern days, the Mate’s Receipt may also be cross-referenced with the Out-turn reports to ensure compliance and avoid any disputes..
While some say that the advances in technology, port handling operations, and digitalisation may have “diminished” the relevance of Mate’s Receipt, it is still widely used in bulk and break-bulk shipments..
POINT TO NOTE: A Mate’s Receipt is never used in containerised shipments, as in a container shipment, no one verifies the quantity or quality of goods or even what the goods are (scary thought).. It goes purely based on a shipper’s declaration, and we all know how that is working..
