Is there a connection between Incoterms and the shipping line..??
Are Shipping Lines concerned with Incoterms®..??
There have been several questions raised on this blog wherein readers (mostly forwarders and importers / exporters) have complained that their booking was on FCA, FOB, CIF etc and that the Carrier refuses to show details relating to commercial and sales information of the cargo on the bill of lading..
So I thought to clarify the connection between the shipping line and Incoterms®..
ICC (International Chamber of Commerce), defines Incoterms® as below :
Incoterms® – International Commercial Terms
The Incoterms® rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods.
First published in 1936, Incoterms® rules provide internationally accepted definitions and rules of interpretation for most common commercial terms.
The rules have been developed and maintained by experts and practitioners brought together by ICC and have become the standard in international business rules setting.
They help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers to buyers.
Incoterms® rules are recognized by UNCITRAL as the global standard for the interpretation of the most common terms in foreign trade.
Incoterms® are primarily an integral part of the sales contract for use between the seller and buyer..
So technically and legally there is no connection between Incoterms and the shipping line as these terms do not form part of any contract between a customer and shipping line..
The lines also will not show the Incoterms on their bill of lading either in the ports fields or in the body of the bill of lading as they don’t want to undertake the liabilities and risks that comes with the Incoterms especially when it is not a part of their contract..
But ironically, the shipping lines use the terms CIF business or FOB business to classify cargo that is commercially controlled by the shippers at a port (CIF) and cargo that is commercially controlled by the consignees at the same port (FOB)..
Here commercially controlled refers to whoever controls the freight rate negotiations with the shipping lines..
Have you come across any instances where the shipping line has been involved with Incoterms..??