SHOULD B/L SHOW CFR LO

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HussainM
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Joined: 01/03/2012
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Dear Experts,

My supplier is asking me to do away with requirement of B/L to show CFR LO in 46(A) Documents required of the L/C, they are saying that it is already mentioned in price terms covered in 45(A). Can somebody please advice if this creates any ambuigity which can result in buyer having to bear the discharing of cargo from the vessel, my understanding of CFR LO is that the Liner bears the cost of discharing the cargo.

Hussain

trangnq
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Joined: 02/02/2012
ANSWER

Dear Hussain,

In my opinion, Trade term mentioned in 45(A) means that B/L will contain this as a part of description of goods or not as in Article 14(e) UCP 600.  However, trade term CFA LO will still be applied, which suggests that the buyer has to bear the discharging of cargo based on INCOTERMS 2000 or 2010.

phill doran
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Joined: 02/10/2009
mixed bag

Hello there

As an incomplete Incoterms rule, CFR would be a poor effort to qualify the contract between the Seller and Buyer, but is meaningless in the context of the contract of carriage.
LO – if it means anything – could be a qualification to the freight rate and relationship between the Shipper and carrier.

Welded together they remain meaningless – perhaps they are a corruption of the common (but undefined) C&FFO (and note here that in this matter C&F and CFR are NOT the same, they mean two different things)

To use the seller’s term combined with the shipper’s term, to interpret the beneficiary’s position with the issuing bank...well can you not see what is wrong with that picture?

Remember too that as a qualification to a freight rate, “LO” endeavours to imply that the discharge costs are included in the freight rate – but this is subject to ‘the custom of the port’ and may not be true in every instance. By all means put this type of information (correctly written) into the sales contract - but IMHO you should keep it out of the credit.

I wish you well with this, but you are going to make some serious assumptions which may be wrong if you take action on the thin information you have.

cheerrs

phill

"in the kingdom of the blind, what you see is what you get"

Brajamusti
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Joined: 12/07/2011
SHOULD B/L SHOW CFR LO

Hi !

In my experiences, the "LO" as well as "LI", "; "FO" and "FI" is the loading/discharging terms used for a special goods, it means that the loading/discharging the goods have to use the special equipment . This should effected in charter shipment.

It is right that the discharging cost as well as stevedore charges shall be borne by Vessel/Ship Owner or the freight is include the discharging cost.

So it deppends to the contract of Sales, what is the terms price stiulated in contract ?

Regards,

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