ICL Unit-2
ICL Unit-2
&
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
E-NOTES
UNIT-2
CARRIAGE OF GOODS
   Unimodal Transport
   Unimodal transportation refers to transportation wherein the goods are transported by a single
   mode of transport, including by road, railways, sea, inland waterway, air, space, and pipeline. In a
   nutshell, it refers to the transportation of goods through a single mode of transportation.
   In sea shipping, where the goods are transported by a single carrier that issues its own transport
   contract, a bill of lading from one port to another is the common situation, however, If there are
   several carriers, such as for carriage from one port to another port (transshipment at intermediate
   port) and then to the ultimate destination port, the very first carrier in control may issue a via bill of
   lading containing the whole transport with complete responsibility and liability for the complete
   port-to-port transport. This is also known as Unimodal transportation.
   Intermodal Transport
   Two or more modes of transportation, such as road, rail, sea, and air, can be combined to provide
   the most efficient shipping feasible. Multimodal and intermodal transportation are the two types of
   combined transportation.
   They can be utilized for long-distance deliveries as well as when the client has a tight delivery
   deadline or a package that requires special care.
   It is a sort of transportation that transports commodities from one location to another across
   international borders using at least 2 forms of transportation. It entails transporting freight in an
   intermodal container or vehicle across an intermodal transport chain, which allows the integration
   of several transportation networks, while avoiding any handling of the freight itself while changing
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
modes.
   The goal of intermodal transportation is to eliminate cargo handling throughout transit, improve
   cargo protection, increase security, and decrease commodity damage and loss. Furthermore, it
   would improve transportation performance by utilizing the most productive modalities. Long-haul
   transport, for example, may be done by rail or inland canal, while delivery flexibility and efficiency
   will be handled by truck.
   Multimodal Transport
   “European Conference of Ministers of Transport (ECMT) defines “Multimodal Transport” as “the
   carriage of goods by at least two different modes of transport.”
   At the core of the scheme, the Multimodal Transport Operator must be able to design, evaluate, and
   schedule transportation systems, as well as provide efficient transportation at a reasonable expense
   and in less time on specific routes. Multimodal transport, by legal standard, “is a contract for the
   carriage of goods that includes an agreement by a carrier known as the Multimodal Transport
   Operator to conduct carriage of goods using at least two separate modes of transportation from the
   point where the goods are taken in care to the point of delivery.” This means that the carrier accepts
   responsibility for the whole carriage in the complete transportation chain, even though the carrier
   only performs part of the carriage or none at all. Although the consignor may only receive one
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   transport document for the whole journey, the multimodal transport operator can accept several
   documents from the sub-carrier or his subcontractors.
   The item is collected by a truck and driven to the port, where it is then sent to Europe by sea and
   delivered by railway to the consignee‟s city. When using intermodal shipping, each part of
   transportation must be organized separately with distinct carriers, each according to their own
   agreement. Although intermodal shipping necessitates additional logistical work, it allows the
   sender to negotiate terms with every logistics provider.
   If a firm picks multimodal transportation, the entire cargo will be covered by one contractual
   arrangement with only one logistics provider. This indicates that only one logistics provider is
   accountable for the whole transportation, even if some portions are outsourced to sub-carriers
   known as “real carriers.” Because the entire transit is coordinated by a single organization, this
   method of transportation involves less logistics coordination.
   To ease the transport difficulty, traders may seek 3PLs (Third Party Logistics Service Provider) to
   lend a hand in logistics operations. Thus, traders may focus on their main business and cut in
   logistics expenses because of greater expertise of Multimodal Transport Operators or 3PLs.
   Specialized 3PLs are becoming increasingly focused on making the most efficient and effective use
   of their own transportation network. The cost and quality of transportation are improving as a result
   of using multimodal transportation to improve trade movement from one location to another.
   What are the documents required for Multimodal and Intermodal Shipping?
   The Bill of Lading is one of the most crucial papers to have when exporting cargo overseas. It
   includes the consignee‟s, carrier‟s, and shipper‟s names, as well as details regarding the sort of
   items being transported.
   There will be just one contract and one Bill of Lading when employing a multimodal service. The
   document is issued by the competent logistics provider, commonly known as a multimodal
   transport operator (MTO). In this instance, it is called “multimodal or combined transport Bill of
   Lading”. When using an intermodal service, the only distinction is that rather than only
   one document, you‟ll have multiple Bills of Ladings, one per carrier.
   If land transportation is used, unimodal transport will provide door-to-door shipment. However,
   where there is no physical connection for a truck to drive and trucking costs are not in the economy
   range, there are limitations. Unimodal shipping, on the other hand, is mostly used to transport
   goods from one terminal to another or from one port to another.
   If goods are either delivered from port to port or terminal to terminal, unimodal transport is much
   more cost-effective; however, when goods must be transported beyond the ports or terminals,
   multimodal transport is more cost-effective when a single deal is made and the Trader does not
   need to locate carriers to take over the shipment for the second leg of transportation and so on.
   usually shipped by air, although intercontinental goods may be shipped by water. In an ideal world,
   all modes of transportation might be merged to provide the most cost-effective option. Road, sea,
   and air transportation are the most common modes of freight transport. When sending single
   parcels, however, a mix of trucks and airplanes is typically the best option.
   destination. If the service is provided by a ship, such considerations are unquestionably distinct
   ports.
   In the traditional multimodal shipping, the shipper prefers to deal with only one party to coordinate
   the whole shipment. The criminal issues that may arise in the case of unimodal delivery are minor
   in contrast to those that may arise if the deal were for multimodal delivery. In the latter case,
   products are delivered by at least one or more modes of transportation, such as buses and ships,
   cars and ships, or airplanes, among others.
   A shipment can be shipped using either method of transportation, depending on the circumstances.
   Freight forwarders, providers, and multimodal operators facilitate these types of contracts. A
   freight forwarder could also serve as the shipper‟s agent and contribute to the compilation of
   carriage contracts for each provider, which would then be issued to their corresponding criminal
   regimes. Items could be shipped at the expense of the shipping owner under such arrangements,
   with no private legal liability on the freight forwarder‟s part.
   When multimodalism evolved, providers adopted practices for the issuing of multimodal bills of
   lading. Historically, most ocean carriers have provided bills of lading that account for legal
   responsibility of services entirely dependent on a “community device” of appropriate legal
   responsibility regimes (the legal responsibility gets limited by choosing community device). The
   legal obligation of each connecting provider is governed by the legislation applicable to each step
   of transportation under this scheme.
   Among the providers, the rights of indemnity and contribution are governed likewise. Under those
   cases, each provider restricts its legal liability to the process that it conducts, and the applicable
   legislation is specified to tour with the shipment in a few situations, in comparison to the
   community device of liabilities, multimodal bills of lading which furthermore indicate that the
   issuing provider takes legal responsibility all over the whole period of transportation. This is
   known as the uniform system.
   Commercial Invoice is one of the most important documents when shipping your ocean freight. It
   is the invoice that is issued by the seller (exporter) to the buyer (importer). It is required in the
   customs clearance process.
   The Packing List is another important shipping document when transporting ocean freight
   internationally. It is a detailed overview of the cargo mentioned on the Commercial Invoice above.
   It also includes information on how the shipment has been packed and which marks and numbers
   are noted outside of the shipment boxes.
   An Export or Import Customs Declaration lists details of the goods which are imported or
   exported. This declaration is especially important when shipping international freight. Describing it
   in legal terms, with a Customs Declaration a person shows the wish to place goods under a given
   customs procedure. The Declaration is used for customs clearance and to calculate the duties or
   taxes applicable to the cargo. It is prepared by a customs broker using the invoice and packing list.
   The Bill of Lading is a detailed document which you will receive from us. It is the transportation
   contract and important details on the shipment are included in it. It is another relevant part of the
   ocean freight and proof that the carrier has received the goods from the shipper in good condition.
   The party holding this document is also the party controlling the cargo.
   A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper that details the
   type, quantity, and destination of the goods being carried. A bill of lading also serves as a shipment
   receipt when the carrier delivers the goods at a predetermined destination. This document must
   accompany the shipped products, no matter the form of transportation, and must be signed by an
   authorized representative from the carrier, shipper, and receiver.
   A bill of lading, therefore, is a very important issue when making shipments to move the cargo or
   freight from one point to the other. On one hand, it is a contract between a carrier and shipper for
   the transportation of goods and on the other hand, it serves as a receipt issued by a carrier to the
   shipper.
   Hence, the bill of lading is considered a legal document which provides all the vital details to the
   shipper and the carrier to conveniently process the freight shipment through different maritime
   countries and invoice it correctly.
   The original copy of the bill of lading is provided to the carrier, and a copy of the same should also
   be ascribed to the packaged freight.Negotiable and Non-negotiable bill of lading, Negotiable bill of
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   lading: In this type of bill, clear instruction is provided to make the delivery of the goods to
   anyone having the possession of the original copy of the bill, which itself signifies the title and
   control of the freight. In this type of bill, the buyer/ receiver or his/her agent has to acquire and
   present an original copy of the bill of lading at the discharge port. In the absence of original bill
   copy, the freight will not be released.Non-negotiable bill: This type of bill of lading fixes a
   specific consignee/name of the receiver to whom the freights will be shipped and delivered. It,
   however, does not itself serve the ownership of the goods. Under this type of bill, the assigned
   receiver/ buyers can claim the cargo by confirming their identity.
   2. Open bill of lading – This is a negotiable bill of lading where the name of Consignee can be
   changed with consignees‟ signature and thus transferred. This can be transferred multiple times.
   Switch bill of lading is a type of open bill of lading.
3. Bearer bill of lading is a bill that states that delivery shall be made to whosoever holds the bill.
   Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether
   in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical
   delivery. They are used for bulk cargo that is turned over in small amounts.
   4. Order bill of lading is the bill uses express words to make the bill negotiable. This means that
   delivery is to be made to the further order of the consignee using words such as “delivery to A Ltd.
   or to order or assigns. The cargo is only delivered to the bonafide holder of the bill of lading, and it
   has to be verified by an agent who issues delivery order and the verified bill of lading. The order
   bill of lading:
   – Is the most modern type bill which is widely used all over the world
   – Ensures the safety of delivery of cargo to a bonafide holder of B/L
   – Since the ship visits several foreign ports where the language, practice, procedures may be
        different the master might be inconvenienced during the delivery of the cargo. People might
        fraudulently collect the cargo.
   – To overcome this difficulty and avoid future cargo claims and litigations, the consignee or the
        holder is required to surrender the bill of lading to the ship‟s agent at the discharge port who
        will verify the genuineness of the bill of lading. When satisfied the agent will issue a delivery
        order and the verified bill of lading. Now any person can collect the cargo from the ship by
        surrendering the bill of lading and the delivery note to the ship.
   As the bill of lading is made to “to order” of the consignee, it is a negotiable instrument of title.
   This means that the ownership of the bill of lading can be transferred from one person to another
   by authorising signature and delivery of the bill of lading.
   All goods which have not been paid in advance and are shipped under “To order” of the bill of
   lading can be categorised into two types:
     To Order, Blank Endorsed: not consigned to any named party but „To Order‟ of the consignor,
        with the intended – consignee‟s name given under „notify party.‟ The consignor must stamp
        and sign (endorse) this B/L so that its title can be transferred.
     To Order, Bank: consigned to a bank with the intended consignee‟s name given under „notify
        party.‟ The bank endorses the B/L to the intended consignee against payment of (or a pledge to
        pay) the amount of the accompanying bill of exchange. „To Order‟ B/Ls are used commonly in
        the letter of credit transactions and may be bought, sold, or traded, or used as security for
        borrowing money from banks or other lenders.
   endorsement of this bill ensures that the carrier has received goods but does not confirm it is
   onboard of the assigned vessel
   Shipped B/L – This bill of lading is Issued when cargo is loaded on board. It binds the shipowner
   and the shipper directly
   A clean bill of lading is one which states that the cargo has been loaded on board the ship in
   apparent good order and condition. Such a bill of lading will not bear a clause or notation which
   expressively declares a defective condition of goods and/or the packaging. The opposite term is a
   soiled bill of lading. It reflects that the goods were received by the carrier in anything but good
   condition.
   Through B/L – This bill of lading is a legal document that allows for direct delivery of cargo from
   point A to point B. The bill allows transportation of goods both within domestic borders and
   through international shipment as it serves as a receipt of the cargo, a contract of carriage, and
   sometimes title for the products as well
   Combined transport B/L – This bill gives information about cargo being transported in large
   containers by sea and land, i.e. through multi-model transport
   Dirty bill of lading: If the shipowner raises an objection about “the condition of the cargo is in
   good order”, he/she can include a clause thereby causing the bill of lading to be “claused or dirty”
   along with the remarks as per the finding of the cargo condition. E.g. torn packing, broken cargo,
   shortage in the quantity of the goods etc.
   The master will sign the original bill of lading, and when the master of agent signs the three-bill of
   lading, all other copies are considered void. This clause is clearly written on the bill of lading
   which is supplied in sets.
   This is a reason why the bank, negotiating a letter of credit that covers the cargo, will always ask
   for the full set of B/Ls. This is to prevent other B/L holders from legally claiming the cargo before
   the bank does.
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   The popularly used conventions and rules which covers the contract of carriage for carrying goods
   by sea :
   – Hamburg Rules
   – Rotterdam Rules
   – Hague Rules
   – US COGSA
   – Hague – Visby Rules
   The convention which governs the contract of the carriage is usually stated in the first page of the
   bill of lading. Upon booking space for shipment by the consignee the carrier sends a booking
   confirmation which states Clauses sent by the carrier, it will indicate the terms and conditions that
   will govern the booking and contract of carriage.
   with the shipping carriers to track the bill of lading for easy trade.
   However, these precautions must be taken before signing the bill of lading.
   Understanding Incoterms is a vital part of International Trade because they clearly state which
   tasks, costs and risks are associated with the buyer and the seller.
   The Incoterm states when the seller‟s costs and risks are transferred onto the buyer. It is also
   important to understand that not all rules apply in all cases.
Whereas others only apply for sea and inland waterway transport (FAS, FOB, CFR and CIF)
   CIF (Carriage insurance, Frieght) means that the seller delivers when the suitably packaged goods,
   cleared for export, are safely stowed on board the ship at the selected port of shipment. The seller
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   Despite the seller paying for the freight contract to the selected destination port, once the goods are
   safely stowed on board, responsibility for them transfers to the buyer.
   The seller is only obliged to procure the minimum level of insurance coverage. This minimum
   level of coverage is not usually adequate for manufactured goods. In this event, the buyer and seller
   are at liberty to negotiate a higher level of coverage.
   Buyer
   He is responsible for the cost and risk of transportation from the moment that the merchandise is
   delivered alongside the ship at the loading port. He receives and takes the merchandise from the
   carrier at the named destination port. The buyers appreciate this Incoterm because they are released
   from logistics formalities.
   CIP (Carriage and insurance paid to) means that the seller delivers the goods to a carrier or
   another approved person (selected by the seller) at an agreed location.
   The seller is responsible for paying the freight and insurance charges, which are required to
   transport the goods to the selected destination. CIP states that, even though the seller is responsible
   for freight and insurance, the risk of damage or loss of the transported goods transfers from the
   seller to the buyer the moment the carrier receives the goods.
   The seller is only obliged to procure the minimum level of insurance coverage. Should the buyer
   want additional insurance, they are responsible for arranging it themselves.
   Seller
   CIP is identical to CPT, but the seller must supply, in additional, a transportation insurance. The
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   seller settles the transportation contract, pays the freight and the insurance premium. "Under the
   CIP rule of Incoterms® 2020, the seller is required to obtain limited insurance coverage in
   accordance with Clause A of the Institute Cargo Clauses or any other similar set of clauses.
   However, the parties are free to agree on a lower level of cover.
   The risk of damage or loss is borne by the buyer from the moment that the merchandise is loaded
   into the first carrier. After that, the buyer takes care of the import customs clearance and the
   unloading expenses.
   Insurance Coverage
   According to the term CIP, the seller is not obliged to apply for insurance but for a minimum
   coverage. If the buyer wishes to protect himself by a superior coverage, under these circumstances,
   he would need to obtain the agreement of the seller or apply on his own for a complementary
   insurance.
   CFR (Cost Insurance, Frieght) means that the seller delivers when the suitably packaged goods,
   cleared for export, are safely loaded on the ship at the agreed upon shipping port.
   The seller is responsible for pre-paying the freight contract. Once the goods are safely stowed on
   board, responsibility for them transfers to the buyer, despite the seller paying for the freight
   contract to the selected destination port. The buyer must be informed of the delivery arrangements
   with enough time to organise insurance.
   He chooses the transportation, contracts and pays for the freight up to the named port of
   destination; the unloading of the merchandise is not included. The loading of the merchandise after
   customs clearance into the vessel is his responsibility as well as the shipping formalities. However,
   the transfer of risk is the same as in FOB.
   He is responsible for the risk of transportation from the moment that the merchandise is delivered
   alongside the ship at the loading port; he receives the carrier and picks up the merchandise
   delivered at the designated destination port.
   CPT (Carriage paid to) stands for when the seller delivers the goods to a carrier, or a person
   nominated by the seller, at a destination jointly agreed upon by the seller and buyer. The seller is
   responsible for paying the freight charges to transport the goods to the named
   location. Responsibility for the goods being transported transfers from the seller to the buyer the
   moment the goods are delivered to the carrier.
   If multiple carriers are used, risk passes as soon as the goods are delivered to the first carrier. The
   seller‟s only responsibility is to arrange freight to the destination. They are not responsible for
   insuring the goods shipment as it is being transported.The seller should ensure that they make it
   clear on their quotation that their responsibility for the goods ends at loading and, from this point
   forward, the buyer should arrange appropriate insurance.
   The seller controls the logistic chain. After having taken care of export customs clearance, he
   chooses the cargo carrier and pays the charges up to the designated place.
   The risk of damage or loss is borne by the buyer from the moment that the merchandise is loaded
   into the first carrier. After that, the buyer takes care of the import customs clearance and the
   unloading expenses.
   Unloading fees
   It is important to clarify the concept of who is responsible for the unloading charges into the frame
   of the transportation contract. Normally, the buyer must be responsible for these charges unless
   they are included in the transportation fee. In this case, they are charged to the vendor. The vendor
   must clarify this question with the buyer in order to prevent finding himself in a situation where the
   receiver refuses to pay and the cargo carrier turns back to the provider (the seller) to demand his
   part of the payment for the unloading charges as well as the eventual fees for the vehicle's
   immobilization while waiting for the problem to be solved.
   DAT(Delivered at Terminal) is a term indicating that the seller delivers when the goods are
   unloaded at the destination terminal.
   „Terminal‟ can refer to a container yard, quayside, warehouse or another part of the cargo terminal.
   The terminal should be agreed upon accurately in advance to ensure no confusion over the location.
   While there is no requirement for insurance, the delivery is not complete until the goods are
   unloaded at the agreed destination. Therefore, the seller should be wary of the risks that not
   securing insurance could pose.
   DAP (Delivered at Place) means that the seller delivers the goods when they arrive at the pre-
   agreed destination, ready for unloading.
   It is the buyer‟s responsibility to effect any customs clearance and pay any import duties or
   taxes. Additionally, while there is no requirement for insurance, the delivery is not complete
   until the goods are unloaded at the agreed destination. Therefore, the seller should be wary of the
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   The seller has to deliver the merchandise and place it at the buyer's disposal into the inland freight
   transportation carrier ready to be unloaded at the designated place of destination. He has to take
   care of the export customs clearance; however, he is under no obligation of performing the import
   customs clearance. The seller must bear a contract for the transportation of the merchandise up to
   the named destination and unload it from the transportation carrier at its arrival. The seller has no
   obligation towards the buyer of obtaining an insurance contract. Nevertheless, he must provide the
   buyer, at his own expense, the documents that will allow him to pick up the merchandise delivered.
   The Incoterms® 2020 rules explicitly allow for the necessary transport to be performed under a
   contract of carriage or to be arranged by own means (without the involvement of a carrier acting as
   a third party).
   He has to pay the price of the merchandise as stipulated in the sales contract and he has to pick up
   the merchandise once it has been delivered.
   DDP (Delivery duty paid) means that the seller delivers the goods to the buyer, cleared for import
   and ready for unloading, at the agreed location or destination. The seller maintains responsibility
   for all the costs and risks involved in delivering the goods to the location. Where applicable, this
   includes pre-shipment inspection costs and import „duty‟ for the country of destination. Import
   duty may involve customs formalities, the payment of these formalities, customs duties and taxes.
   DDP holds the maximum obligation for the seller. While there is no requirement for insurance, the
   delivery is not complete until the goods have been unloaded at the destination. Therefore, the seller
   should be wary of the risks that not securing insurance could pose.
   The seller has, in this case, the maximum obligation; he is responsible for all transfer charges and
   risks until the merchandise is delivered to the buyer. The import customs clearance is also under his
   charge.
   The Incoterms® 2020 rules explicitly allow for the necessary transport to be performed under a
   contract of carriage or to be arranged by own means (without the involvement of a carrier acting as
   a third party).
   The buyer picks up the delivery at the designated destination place and pays the unloading fees. He
   must request from the seller to furnish him with all the information required in relation to the
   security which he will need for the export, import and transportation of the merchandise until its
   final destination.
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   EXW (Ex Works) means that the seller has delivered when they place or deliver suitably packaged
   goods at the disposal of the buyer at an agreed-upon place (i.e. the works, factory, warehouse, etc.).
   The goods are not cleared for export.
   The seller is not required to load the goods onto a collecting vehicle and, if they do, it is at the
   buyer‟s expense. EXW is the only Incoterm where the goods are not required to be cleared for
   export, although the seller has the duty to assist the buyer (at the buyer‟s expense) with any needed
   documentation and export approvals.
   After collection, the buyer must provide the seller with proof that they collected the goods. From
   collection, the buyer is responsible for all risks, costs and clearances.
   The only responsibility of the seller is to prepare the merchandise for the buyer, at his own
   premises, suitably packed for export shipping purposes (in general, the price includes loading the
   merchandise in the pallet).
   The buyer is responsible for all the charges and risks involved in the shipment of the merchandise
   from the moment it leaves the seller's warehouse until it reaches its destination place.
   The term EXW represents a minimum obligation for the seller. However, if the parties agree that
   the vendor insures the loading of the merchandise at the point of departure "EXW Loaded", and
   make the vendor responsible of these risks and charges, they have to precise this issue very clearly
   on an explicit clause included in the sales contract (ex: EXW Paris loaded, ICC 2020).
   The seller is expected to provide for the buyer, at his request and at his charge and risks, all the
   assistance required to obtain an export license, insurance and provide the buyer with all the useful
   information in his possession which will allow the buyer to insure the export of his merchandise in
   full security.
   FAS (Free Alongside Ship) stands for when the seller delivers the goods, packaged suitably and
   cleared for export, by placing them beside the vessel at the agreed upon port of shipment. At this
   point, responsibility for the goods passes from the seller to the buyer. The buyer maintains
   responsibility for loading the goods and any further costs.
   The seller may procure a freight contract at the buyer‟s request or, if the buyer fails to procure one
   by the date of a scheduled delivery, the seller may procure one on their own initiative. The buyer is
   responsible for the cost and risk associated with the freight contract.
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   The obligations of the seller are henceforth fulfilled when the merchandise is placed, after customs
   clearance, alongside the ship at the dock or at the lading of the designated port of shipment.
   From this moment on, the buyer is responsible for all charges and risks of loss or damages, from
   the moment that the merchandise is delivered alongside the ship, especially in the case of a ship's
   schedule delay or the cancellation of a port of call. The buyer designates the carrier, arranges the
   transportation contract and pays for the freight.
   License acquisition
   The acquisition of an export license or any other official authorization is at the charge and risk of
   the seller. In the same way, the buyer is responsible for the import license. The buyer must provide
   the vendor with all the information regarding the name of the vessel, the loading place and the time
   chosen to deliver the merchandise within the period accorded.
   Documents fees
   The seller must, should the case arise, provide for the buyer, at the right time, all the assistance
   needed to obtain all the documents and information regarding the security requirements for the
   export and/or import of the merchandise and/or for its transportation to its final destination. The
   cost of the documents furnished and/or the assistance given are costs and risks paid by the buyer.
   FCA (Free Carrier) means that the seller fulfils their obligation to deliver when the goods are
   handed, suitably packaged and cleared for export, to the carrier, an approved person selected by the
   buyer, or the buyer at a place named by the buyer. Responsibility for the goods passes from seller
   to buyer at this named place.
   The named place may be the seller‟s premises. While the seller is responsible for loading the
   goods, they have no responsibility for unloading them if the goods are delivered to a named place
   that is not the seller‟s premises.
   The seller may procure a freight contract at the buyer‟s request or, if the buyer fails to procure one
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   by the date of a scheduled delivery, the seller may procure one on their own initiative. The costs
   and risks of this freight contract fall on the buyer. The buyer must be informed of delivery
   arrangements by the seller in time for the buyer to arrange insurance.
   If the delivery takes place at the seller‟s premises, it is the seller, who handles the loading of the
   suitably packaged goods into the vehicle provided by the buyer, (specify “FCA seller‟s premises”).
   Export customs clearance is the responsibility of the seller.
   The buyer has chosen the type of transportation and the carrier with whom he has signed a
   transportation contract and pays for the main transportation (if applicable). The transfer of charges
   and risks takes place at the moment when the carrier picks up the merchandise. The parties must
   agree upon naming a place where to hand over the merchandise (the carrier‟s terminal or the
   vendor‟s premises).
   The seller must, should the case arise, provide for the buyer, at the right time, all the assistance
   needed to obtain all the documents and information regarding the security requirements for the
   export and/or import of the merchandise and/or for its transportation to its final destination. The
   cost of the documents furnished and/or the assistance given are costs and risks paid by the buyer.
   The Incoterms 2020 rules explicitly allow for the necessary transport to be performed under a
   contract of carriage or to be arranged by own means (without the involvement of a carrier acting as
   a third party).
   Variant
   "FCA seller's premises".
   This Incoterm was officially added to the revised version of Incoterms 2000: it is the responsibility
   of the seller to load the merchandise.
   FOB (Free on Board) means that the seller delivers the goods, suitably packaged and cleared for
   export, once they are safely loaded on the ship at the agreed upon shipping port. At this point,
   responsibility for the goods transfers to the buyer. The seller may procure a freight contract at the
   buyer‟s request or, if the buyer has failed to procure one by the date of a scheduled delivery, the
   seller may procure one on their own initiative. The buyer is responsible for the cost and risk of this
   freight contract.
   The seller must inform the buyer of delivery arrangements in good time to sort out insurance for
   the shipment.
   FOB is a frequently misused term. If a supplier insists FOB needs to be used for containerised
   goods, the buyer should make certain that the selected insurance covers the goods „warehouse to
   warehouse‟.
   He has to deliver the merchandise at the designated loading port, on board of the vessel chosen by
   the buyer and fulfill all the formalities of export customs clearance, if there are any.
   Under a contract type FOB, the seller fulfills his delivery obligation when the merchandise is on
   board of the vessel at the designated loading port, or in the case of successive sales, the vendor
   obtains the merchandise and delivers it, as well, in order to have it all transported up to the
   designated destination place indicated in the sales contract.
   He selects the vessel, pays the maritime freight, the insurance and he takes care of the formalities at
   the arrival. He is also responsible for all the charges and risks of loss and damage that could arise
   to the merchandise from the moment it was delivered.
   Variant
   For information, the "ARRANGING FOB" is the term used by the freight brokers to indicate that
   the operations that take place prior to placing the merchandise aboard have been done and
   accomplished, as well as the export customs clearance operations, if needed. All these operations
   represent an extra cost, to be paid by the seller, which is sometimes called "fee of placing into
   FOB".
   The "FOB STOWED" and/or "FOB STOWED and TRIMMED" are variations. The seller is
   responsible for the total charges incurred by the merchandise at the loading port. However, it has to
   be stipulated in the contract at which point the transfer of risks takes place.
   The seller must, should the case arise, provide for the buyer, at the right time, all the assistance
   needed to obtain all the documents and information regarding the security requirements for the
   export and/or import of the merchandise and/or for its transportation to its final destination. The
   cost of the documents furnished and/or the assistance given are costs and risks paid by the buyer.
   Hague-Visby rules
   The Hague Rules set an important precedent to maritime issues that were otherwise plagued by
   chaotic turn-of-events. Drafted and passed in the early 1920s, the international maritime law was
   originally outlined and is still formally known as the „International Convention for the Unification
                                    Campus: Plot No. OCF, Sector A-8, Narela, Delhi-110040
Ph: 91-11-27284333 / 34. Toll Free No. : 1800117677. Website: www.cpj.edu.in. E-mail: cpj.chs@gmail.com
                               Chanderprabhu Jain College of Higher Studies
                                                                      &
                                                           School of Law
                                                 An ISO 9001:2015 Certified Quality Institute
        (Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)
   of Certain Rules of Law Relating to Bills of Lading.‟The Hague Protocol was amended in the late
   1960s and the maritime law post its amendment came to be known across global maritime channels
   as the „Hague-Visby Rules.‟
   The Hague-Visby Rules stipulate the extent of the governance of the waybill for a cargo ship being
   chartered alongside the liabilities that stand to be potentially imposed on the parties agreeing to the
   charter. Thus it follows that in order for the Hague-Visby amendment to be applicable to a
   particular cargo charter; the waybill is required as the primary document of verify the authenticity
   of the consignment and all the other details as provided by the concerned personnel chartering the
   vessel.
   Though almost every country engaged in maritime activities across the world, follows the outlining
   of the provisos of The Hague Protocol, certain countries haven‟t accepted all the stipulations of the
   international maritime law. Some of these countries either;Follow the stipulations of the original
   Hague Rules or,Have established a separate law dealing with the governance and ambit of
   waybills, whilst including the stipulations of the Hague-Visby protocol or,Have outright not
   sanctioned the acceptance of the provisos of the Hague-Visby protocol. Each of the 10 articles of
   the Hague-Visby law, outline in detail the requirement on the part of the shipping corporate that
   engages the vessel for the necessary operation and the chartering company that provides the
   required cargo ship.
   As per the stipulations specified, the shipping corporate is expected to supply up-to-date and the
   most accurate of data pertaining to the cargo potentially being consigned. If shipping corporate
   fails to do so, then as per the stipulations of the Protocol, neither the chartered vessel nor the
   operator of the vessel will be held culpable for any loss arising out of any accident during the
   course of the transit.
   At the same time, on the part of the operator of the cargo ship, it is expected, as per the rules of the
   law that the vessel engaged is:
     Thoroughly suited to be utilised for the cargo transiting operation
     All the vessel‟s cargo decks are suitable to be loaded with the necessary cargo load and are
       appropriately equipped with the required infrastructure
     In terms of the ambit of the terminology of cargo, as per the outlining of the international
       maritime law, all objects and commodities except cattle, fowl and all those variants of cargo
       which would be required to be placed in the open decks come within the stipulations of the
       Hague Protocol.
   Similarly even in case of a shipping organisation providing all the required cargo details in the
   waybill, operators have been exempted from paying recompense to the aggrieved shipping
   company on the basis of several defined points.
   In case the cargo has to be thrown into the open sea on account of any maritime emergency, the
   cargo ship‟s operators are required to provide partial compensation to the shipping corporate
   incurring the loss, as per the Hague-Visby Rules.
   Such recompense however can be claimed by the shipping corporate either on the basis of each
   parcel of the entirety of the cargo shipment or on the basis of each kilogram of the total gross cargo
   tonnage carried by the ship.A shipping corporate claiming financial recompense also needs to note
   that its claim will be accepted and validated only if the exact quantitative details about the cargo
   have been provided and listed in the waybill.
   Additionally, the monetary value for the recompense depends on the cost of similar cargo in the
   market, while the currency utilised to calculate the amount of recompense depends on the
   geographic location where the accident has occurred.