Letter of Credit Forum

Master Documents

Every international movement requires a master transport document. This is the document issued by the actual carrier. The ‘actual’ carrier in this context would be the shipping line, the airline, the road haulier or the rail service. This could extend to include the carrier’s appointed agent or representative but, as discussed below, it would usually not describe (for example) a freight forwarder.
The master transport document will serve a variety of functions amongst which will be its role as a record of the terms and conditions of carriage – or as a reference to a set of such terms that will be applied in the relationship between the shipper and the carrier.
When the buyer and seller are working without a freight forwarder (or a cargo consolidator), the carrier issues the master transport document directly to the shipper. However note that under certain conditions even when the seller is working with a freight forwarder the carrier’s document may show the seller, and not the freight forwarder, as the shipper. In such cases, the freight forwarder is most probably acting in the capacity of agent for the seller. But, it is more often the case that a freight forwarder acts as a principal and the carrier issues the master transport document to the freight forwarder directly, with the freight forwarder shown as the shipper on that master document. The freight forwarder in turn issues their own ‘house’ transport document to the actual sellers, who will be shown on them as the shipper.

House Documents

When the buyer and seller are working without a freight forwarder (or a cargo consolidator or NVOCC), the carrier issues the master transport document directly to the shipper. But, if they are working though a forwarder, then the carrier issues the master transport document directly to, and in the name of, that forwarder who will in turn issues their own ‘house’ transport document presumably as directed by the seller or buyer.
This freight forwarders’ document is referred to as a House document – for example, a House Airwaybill or House Bill of Lading etc., and commonly the seller would be shown on it as the shipper with the seller’s client – presumably the buyer – in turn shown as the consignee.
Note that under certain conditions even when the seller is working with a forwarder the actual carrier’s document may show the seller and not the forwarder, as the shipper. However it is more often the case that, as mentioned above when a forwarder is involved, the carrier issues the master transport document to the forwarder directly with the forwarder shown as the shipper on that master document.
This process mainly allows freight forwarders to buy bulk space for ‘x’ from the actual carrier under the master document and to retail this space in smaller units to shippers for ‘y’, using a house document to record the individual transactions which make up the whole. Accordingly, is an integral device in running a seafreight groupage or airfreight consolidation service.

cheers

phill