Letters of Credit

When a beneficiary presents documents, banks are notoriously pedantic when examining these documents and find discrepancies in the most minute and unimportant details. Bills of ladings are even more difficult, since the seller/beneficiary does not write the document him/herself but hast to rely on the issuer to be detail oriented.

The preceding sentence so carefully talked about "the issuer" instead of the carrier or freight forwarder of the shipper. Attention: these three terms are very different in meaning and issuance by the wrong person renders the bill of lading useless.

The carrier is the guy with the truck or ship who actually takes your goods and ships them to their destination, he can issue a bill of lading since he promises to be responsible for the shipment of your goods.

You, the exporter, are the shipper which means you cannot issue bills of lading. What about the freight forwarder ? The freight forwarder is a tricky animal, since often the freight forwarder acts as a carrier and sometimes as a broker, that is he organizes the shipping to be performed by others. The question is, what your freight forwarder promises to do for you: If he promises to ship the goods and uses others to actually carry the goods, he is allowed to issue bills of lading under an LC, if he only promises to organize the shipment so that the actual carriers are responsible for the safe delivery of the goods, then the freight forwarder cannot issue bills of lading.

Does the person promising to perform the carriage need their own means of transportation, do they have to have a ship, truck, plane ? NO, anybody can be a carrier for purposes of the LC as long as they promise to perform the shipment. They are allowed to use subcontractors, however they are responsible.

Marine Bills of lading need to show that the goods have been shipped on board a named vessel at the port of loading.

Who can finally sign the bill of lading ? The CEO of the carrier, an agent for the carrier, the captain of the vessel, an agent for the captain ? All of the above are correct and here is how you do it:

Example Correct
Carrier: Hapag Lloyd Letterhead: Hapag Lloyd (carrier)
Signer: Hapag Lloyd Signature Box: Hapag Lloyd
Signature

Carrier: Hapag Lloyd Letterhead: Hapag Lloyd
Signer: Agent Smart Signature Box: For Hapag Lloyd
Smart
Signature
Carrier: Hapag Lloyd Letterhead: Hapag Lloyd (carrier)
Signer: Master Card Signature Box: Master
Signature

Carrier: Hapag Lloyd Letterhead: Hapag Lloyd
Signer: Agent Smart for Signature Box: For the Master Card Master Card Smart (as agent)
Signature

You can click here if you have more questions about letters of credit and how to prepare proper documents.