Letter of Credit Forum

Phill, thanks you very much for your full explanation. which helped me alot to understand fact and risk.

"if you leave it as it stands and you surrender the bills in Dubai, technically the ‘consignee’ should not know who the shipper is (as they will not sight the bill): however, there are other means open to them if they are really interested in knowing." its really worth..

Thanks Ciao,

As always received prompt suggestions.. Thanks again

Hello Shakil

There are two considerations:

1. Can the credit work if the shipper is the same party as the applicant: my understanding here is that the answer is “yes”. Unless the credit specifically names who the shipper must be, the shipper may be any party. (I am open to correction on this point).

2. Will the carrier (the shipping line) accept a foreign entity as shipper? This is a harder question to answer. Firstly, the carrier’s principle is the party who booked space with them, NOT the named shipper. So if your supplier booked in their own name, they may – in that process – ask for a bill of lading to be issued showing you as shipper. It is on the carrier to allow this or not. However, secondly, your supplier loses certain rights in this process and they must be happy to relinquish those rights to you – which is not easy for them to do if they are also being paid via an L/C where there is a risk of discrepancies and non-payment.

Added to this, if you leave it as it stands and you surrender the bills in Dubai, technically the ‘consignee’ should not know who the shipper is (as they will not sight the bill): however, there are other means open to them if they are really interested in knowing.

Just be careful when working with ‘switch bills’. Personally I am not sure they are legally sound. If you can introduce a freight forwarder’s document ‘under’ the carrier’s bill of lading, you are on safer ground if you really need/wish to ‘switch’ documents.

I wish you well.

Cheers

phill

“...in the kingdom of the blind...what you see is what you get...”

Hi Friend,

Your bank and a forwarder may advise you to word the l/c in the way to obtain a bill of lading where you are indicated as

shipper. Normally is the entity that pay the freight ad is liable for other charges.

Other comments appreciated

Ciao