We all have seen the clause SAID TO CONTAIN or STC in a Bill of Lading issued for an FCL shipment.. What does it mean and should the Said To Contain clause be allowed or not..??
As explained briefly in Part 3 of my Parts of a Bill of Lading post series, for containerised cargo, especially if it is an FCL, it is VERY IMPORTANT that the shipping line shows the SAID TO CONTAIN clause on the bill of lading..
The reason it is important for the carrier is that in an FCL shipment, the shipping line does not get involved in the packing of the container and therefore does not know “what (the cargo)” and “how many / how much (weight/packages)” of the what is packed inside the container..
The shipper collects the empty from the shipping line, packs it, seals it and delivers the full container to the port.. The line may not even get to sniff the container..
Shipping line issues the bill of lading based on what is declared by the shipper on the bill of lading instructions..
In a bill of lading that reads
“1×20′ container Said To Contain 750 x 25 kg bags of Sugar”, Sugar is the “what” and and the 25 bags amounting to 18,750 kgs (750×25) is the “how many / how much” of the Sugar is packed inside the container..
Suppose the container reaches destination and the receiver opens the container to find there are only 700 bags instead of 750 bags as per example above, natural instinct would be to hold the shipping line responsible just because they carried the cargo..
The cargo, the quantity and the weight inside the container are not known or verified by the shipping line (although the SOLAS VGM may be proof of the weight) because they are not involved in the packing of the container..
Therefore the shipping line needs some protection against potential claims relating to shortage etc, so they clause the bill of lading with Said To Contain..
This means the shipping line is stating that they don’t know the cargo, the quantity and the weight inside the container and they are accepting the shipper’s declaration of the goods under the Said to Contain condition..
A valid clause then, for sure..
However, the Said To Contain clause is considered by some authorities like Customs and Border Protection (CBP) in U.S.A as being generic in nature and is related to their concerns about terrorist threats and that weapons, bombs or other devices may be smuggled into the country under this “generic cover”..
Hence post 9/11, CBP in USA advised that they cannot accept the Said to Contain Clause..
In line with this, some shipping lines seem to have stopped showing this clause on the bill of lading..!!
However, for a shipping line, this could be a double-edged sword.. By choosing not to show the Said To Contain clause in order to trade in the USA, the carriers may be waiving their rights to an important clause that can prevent them from any claims relating to shortage or loss of goods..
In the case of bulk and breakbulk shipments, this clause is not shown because the carrier can clearly see what, how many and how much they are receiving and in what condition..
But with FCL shipments, the carrier does not have this option and without this clause, they may be held responsible for any shortages based on the cargo quantity stated in the bill of lading..
Andrew Trasler of the TT Club has addressed this concern with the CBP who have given assurance that the prohibition on the use of the term “Said To Contain” applies only to the cargo manifests submitted by the shipping lines to CBP and not the bill of lading..
As per CBP, as long as there is a precise description of the cargo in the bill of lading including the Harmonised Tariff Schedule (HS Code) under which the cargo is classified, weight of the goods etc, the words “Said To Contain” may still be used in bills of lading..
On the bill of lading, Said To Contain clause is usually accompanied by another clause – Shipper’s Load Stow and Count..
I have read in some publications/papers that Shipper’s Load Stow and Count clause may be used or is being used as an alternative to the Said To Contain clause..
I disagree with this because in my personal opinion these two clauses serve different purposes..
Said To Contain refers to “what (the content)” is packed in the container whereas the Shipper’s Load Stow and Count refers to “how many / how much (weight/packages) of the what” is packed in the container.. Both are different..
Shipper’s Load Stow and Count refers to the condition that
- the shipper has loaded the goods into the container using their own means/methods of loading;
- the shipper has stowed the goods loaded in the container in a manner safe for transport.. This also means that the shipper maybe liable for cargo damage due to improper stowage of cargo in the container..
- the shipper has counted the goods loaded and stowed in the container (ex : 750 bags of sugar)..
What the Shipper’s Load Stow and Count clause doesn’t say is what the “goods” are..
Said To Contain is the shipping line’s statement that the container is Said To Contain “Sugar” based on the declaration they have from the shipper..
So what do you say..??
Are these two terms interchangeable..??- Should the bill of lading show the Said To Contain
- If you are one of the carriers that have stopped showing the Said To Contain clause on the bill of lading,
- have you faced any shortage claims from the receiver..??
- what is your prevention mechanism against such claims..??
Hello,
Contain clause on the bill of lading,
have you faced any shortage claims from the receiver..??
what is your prevention mechanism against such claims..??
Any examples on these ones?
Dear Hariesh,
It has been a long time since I last wrote to you,
Please note that even the Shipping lines who have removed the STC condition, they added it in other formats as CMA did in the attached image.
((( Description of Packages and goods as Stated by the Shipper
Shippers Load Stow and Count ))))
I also like to draw the attention of everyone that there are responsibilities on the shipping line, but conditional that there is damage to the customs SEALS on the container during the way from POL to POD.
PLEASE NOTE: your site dose not accept images, so I had to write the phrase of CMA above.
Essam Hamed
Export Manager
Hi Essam, thank you for this useful information.. 🙂
Dear sir,
Please give PDF download option. very useful news so please consider sir
Dear Mr Shariah
both stc and slc are different purpose , the shipping line is a transporter only . i want to check the information that the b/l direct to the receiver from USA dont show stc
Tanks
Hassan
there is a practice with some operators (atleast) to use both the STC and SLSC clauses on the Bills of Lading (!) which makes it beyond any doubt the fact the cargo inside the container is fully known only to 1 party – the shipper.
Why does this matter? This clause has been in use since the 70’s without any issues. Why even bring this up? What is the point?
Yes it may have been used since the 70’s and it is in the interest of the line to keep using it, but since 9/11 this issue has become relevant and the question was whether the STC clause and SLAC clause are interchangeable..
You should always use STC (Said To Contain). Your freight forwarder does not go out to inspect the container to see if you shipped Rice or Rifles.
It will be very difficult for a line to authorize the cargo, weight and count with out seeing / counting and weighing. Options can be, a) certification from an independent surveyor or b) to state ” cargo contents/ weight / count based on the customs approved shipping declaration”.
Regards / Manohar
Thanks Manohar, but the lines that are issuing bills of lading without the STC will be authorising it without verification.. No line is doing surveys as it is expensive to do so on each box..
“cargo contents/ weight / count based on the customs approved shipping declaration” – I don’t think there is any customs approved shipping declaration as customs also don’t check what is inside the container unless they inspect every box which they don’t..
So in the end it all boils down to the shipper’s declaration..
Said to contain
No risk for IATA or shipping line
Hi Mehta, does IATA bills also show such clauses..?? Interesting to compare what other clauses is applicable in Airfreight..
Hariesh,
To answer your remark about airfreight, yes air waybills (the equivalent of maritime bills of lading) do also contain STC or SLC indications- and airlines face the same challenge as shipping lines in front of Customs (by the way, not only in the US).
There is also the related issue of having to provide HS Codes instead of more generic goods description, as you noted in your post. Customs tend to consider that generic goods descriptions does not allow proper risk assessment and there is an increasing trend in making HS code indications mandatory, although transport carriers (whether in maritime or air) have in many instances no means to produce that information if it is not provided to them. Nobody can take the chance of guessing the right HS code: only the party that owns the goods will know the correct HS code.
Thank you for your comments Christian.. Appreciate the clarity.. 🙂
Good very useful information
I am a shipper. I feel the STC clause is lawful as the carrier do not get chance to ensure identity, quantity & quality of the material they get to transport. Even if the carrier’s inspection of the goods is sought for at the time of packing and stowing, I don’t think the carrier have the expertise to ensure the product is correct as per the buyer’s requirement.
So, the carrier can declare STC
Thanks for your honest view as a shipper Manu.. 🙂
Hello, I dont think SLC and STC are interchangeable. While SLC is a protection for carriers against unsafe packing/stowing by a shipper, STC is a declaration (based on back to back shipper declaration) about nature of cargo. Even for consolidators, they can still use the STC clause whereas they cannot use the SLC clause since the consolidators themselves do container pack.
Thanks for your views Vikash and you are right about the consolidators..