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.
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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.
FAQs
The consignee, in turn, receives and inspects the goods, completing the transaction. While the shipper and consignee are the main players in a transaction, the notify party is the behind-the-scenes hero. They act as a communication bridge between both parties, ensuring a smooth and seamless transport of goods.
Who should be the notify party on a bill of lading? ›
What is a Notify Party? The person designated on a Bill of Lading, Sea Waybill or Air Waybill to be notified when a shipment arrives at its destination. This person is often responsible for arranging customs clearance and can be the buyer, consignee, shipping agent or other entity.
What is an example of a shipper and consignee? ›
All consignee means, though, is the person who's designated to receive the shipment. For example, let's go back to the example of a supplier (the shipper), sending you parts via a steamship line (the carrier), which are intended for your company (the consignee), who will use them in their manufacturing processes.
Can a shipper and consignee be the same party on a bill of lading? ›
Therefore, the shipper and the consignee can be the same. The other instance in which the shipper and the consignee can be the same is when the consignee comes to the United States and buys the merchandise while living or based in the United States to ship to him/herself in another country.
Am I the shipper or consignee? ›
The shipper is the party who contracts with the carrier for the transportation of goods. The consignee is the party who is to receive the goods at the destination. Was this information useful?
What should I put in consignee? ›
Who is the consignee? A consignee in shipping is listed on the bill of lading (BOL). This person or entity is the shipment receiver and generally the owner of the shipped goods. Unless there are other instructions, the consignee is the entity or person legally required to be present to accept the shipment.
What is the difference between buyer and notify party? ›
The notify party is the contact person who is notified when the shipment arrives at the destination. The notify party can be several people: the buyer, the shipping agent, or any other entity. The notify party is also responsible for arranging customs clearance at destination.
Is consignee always the buyer? ›
The consignor is the sender of a consignment while the consignee is the receiver of the consignment. The consignee may be a buyer or just an agent who acts on behalf of the consignor. The ownership of the goods or the consignment remains with the consignor until the goods have been paid for in full by the consignee.
Who is the consignee on a shipment? ›
What is a Consignee? The recipient of the goods being shipped or transported. This person takes ownership of the goods once they have cleared customs and is generally the one responsible for import duties and taxes.
What is the difference between ship to party and consignee? ›
The term “consignee” and “shipper” are often used interchangeably. However, there are key differences between the two parties. In contrast with the roles of the shipper, the consignee is not the sender, but the receiver of the goods. Usually, the consignee is the owner or buyer who purchases the goods from the seller.
The 'contractual shipper', being the person who books the transportation with the carrier. A bill of lading is issued to evidence the carriage contract agreed. The 'actual shipper' who delivers the goods to the carrier (whether line or NVOC).
What is BL consignee? ›
What is a consignee? The consignee is the party to whom ownership of the goods will transfer when the cargo is released at the destination. A consignee must be named on a bill of lading.
Can a notify party make payment? ›
Can Notify Party Make Payments? Yes, notify party can make payments. The notify party can make this payment in advance or during delivery of goods.
Can a notify party clear the cargo? ›
Once these formalities are completed, the buyer or the party who is legally entitled to the goods has to receive the goods on time and in good condition as agreed. The notify party mentioned on the transport bill is usually the one who is entrusted with clearing the cargo upon its arrival at the destination port.
Who should the consignee be on a commercial invoice? ›
Most commonly, the “Buyer of the Goods” is entitled as the Consignee, but not in every case. The Agent nominated by the buyer could also turn out to be the Consignee. In some cases, Consignee could also be the buyer's bank.
What does consignee notified mean? ›
The entity may sell or forward the goods to the end customer or client, often referred to as the “notify party”. After receiving the goods, the consignee must inform or notify the end party when the goods were received at the final port of destination. Consignee and notify party can be the same or different.
What does consignee mean in shipping? ›
What is a Consignee? The recipient of the goods being shipped or transported. This person takes ownership of the goods once they have cleared customs and is generally the one responsible for import duties and taxes.
Does consignee mean buyer or seller? ›
The consignor is the sender of a consignment while the consignee is the receiver of the consignment. The consignee may be a buyer or just an agent who acts on behalf of the consignor. The ownership of the goods or the consignment remains with the consignor until the goods have been paid for in full by the consignee.
