How do I identify all related charges in addition to freight in a shipment..??

How do I identify all related charges in addition to freight in a shipment..??

This is a question from a reader of the blog relating to global trade and documentary credit..

My question is regarding Charges in addition to Freight.

UCP 600 Article 26(c) states that it is acceptable that a transport document bears a reference to charges additional to freight, for example, payable by the consignee (buyer)—regardless of the agreed trade terms.

There are, however, many documentary credits that will effectively modify this rule by stating: “Transport document showing charges additional to freight are not acceptable.”

charges additional to freightISBP 745 describes the practice in such situations stating that “An indication of charges additional to freight may be made by express reference to additional costs or by the use of trade terms which refer to costs associated with the loading or unloading of goods, such as, but not limited to, Free In (FI), Free Out (FO), Free In and Out (FIO) and Free In and Out Stowed (FIOS).”

Thanks in advance.

There are a few questions derived from the above issue/question

  1. Would it be possible to identify all charges in addition to freight related to a shipment..??
  2. Is the shipper allowed to show charges in addition to freight on the transport document..??
  3. If the documentary credit issuer requires this to be shown on the transport document but the shipping line refuses, then what is the solution..??

I invite everyone (especially global trade, documentary credit and banking experts) to comment..


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11 comments on “How do I identify all related charges in addition to freight in a shipment..??”

  1. By Kunjesh Mali Reply

    I have imported one shipment of 5 pallets cbm on freight prepaid *CFS.CFS* mentioned in BL..from bangkok to navasheva port… What charges I expect shipping company to charge me?

  2. By Seaworld Shipping Services Reply

    Because ultimately, paying party is buyer and collecting party is destination forwarder who has to arrange delivery.
    So only the best solution to avoid ect. Charges is that the buyer should have consent, prior to ship, in writing from the delivery agent, about all charges involved , freight + destination charges. Such a fair practice ‘ll enhance business with peace of mind.
    Thks.
    Dr. Shaukat Ali

  3. By ida Reply

    I like this topic. can someone share if I buy on FOB terms example FOB Singapore and I requested for a surrender or Swb which incur an additional charge from carrier.. that should be under my cost as a buyer or my seler?

    • By praveen

      Hi,

      In FOB shipments, if any SWB or surrender takes a role. That particular cost as to observe by shipper only. Shipper as a response to get BL from carrier and surrender to buyer.

  4. By Saibal Bhattacharya Reply

    Prior to any shipment the expoter should take in writing the charges applicable at destination. If it is part cargo you must know that how much is the volume/ weight . Check with three consolidators charges and then appoint the correct shipping company
    This is the riddle you need to practice

  5. By shaurya Reply

    We cant identify exact additional charges in addition to freight, but find out the lumpsump amount in addition to freight as stated below:-
    a) Containerized material
    1)sea freight/Air freight
    2)CHA Charges (loading/unloading/thc/manifesto/washing/cleaning/do etc)
    3)Local transportation from PORT to works.

    b) Bulk material
    1)Sea Freight
    2)Stevadoring charges
    3)birthing charges
    4)HMC charges
    5)Sampling analysis charges
    6)Loading & Local transportation from PORT to works.

  6. By Sam PRETAT Reply

    Hello,
    Rated BLs are mandatory in some countries and forbidden in others.
    Usually, shippers are not eager to have transport-related costs listed so as to avoid disclose pricing info to their customers or third-parties, unless they have to by law (Brazil).
    By all means, a rated BL can only show charges related to the shipment carried up by the document issuer. A marine BL (port to port) cannot show M/H inland haulage costs, for example.
    Samuel

  7. By Muhammad Rizwan Reply

    1.Generally all charges payable at destination or stated on Bill of Lading. Sometimes B/L showing freight prepaid and Destination charges at consignee account which means all charges but not limited to THC, DO, PHC, DPC, Container Monitoring / Inspection / Imbalance, Demurrage, Storage, Over-length charges will be consignee Account.

    2. In my opinion standard format of carriers dont allow to mention break-up or destination charges.

    3. The term with applicable charges can be elaborated on Invoice if shipping line doesnt allow to mentioned additional charge on B/L.

  8. By Chris Papyan Reply

    Hi, I can comment on No. 3 – Since Shipper requires a DC as guarantee for payment by the issuing bank and protection against several risks including risks associated with the buyer financial difficulties then the Shipper must insist on removing that condition from the DC to maintain that guarantee. Otherwise the bank will refuse to pay and payment will be conditional upon acceptance of the transport document by the Buyer. If the ocean line insists on the charges to be shown and the bank insists the condition to apply in the DC then documentary collections transaction subject to ICC URC 522 can be used by the trading parties but the Seller should know that doc collections do not provide payment guarantee by the bank but only provide some extent of security in regards with the BOL as the title document for the goods shipped will be held by the bank until invoice is paid by the Buyer. Doc Collections are usually cheaper transactions than DCs.

    Chris

  9. By Jaime Varas Reply

    A Line B/L or straight B/L issued by an ocean carrier (steamship line) will only show the freight charges due to them. A NVOCC or consolidators can have freight charges and any other charges as a lump sum to their House B/L , which is acceptable by UCP.

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