Meaning of Consignee
A consignee is a person to whom the cargo
would be delivered at the destination by the carrier.
What is
Consignee?
‘Consignee’
is a shipping terminology which is used widely under the contract of carriage.
A ‘consignee’ is a person to whom the shipping line will deliver the cargo at
the port of destination.
People often
think a consignee to be the buyer of the cargo; which is true in a limited sense
but not always necessary. ‘Buyer’ is a commercial term and represents a person
who has purchased goods under the contract of sale.
Consignee in
bills of lading:
The consignee
is mentioned in bills of lading either expressly or by endorsement. Both
instances are discussed below.
Express
mention -
At the time
of issuing B/L, if the shipper gives instructions to the shipping line for
mentioning a particular name under the field of ‘consignee’ as to clearly
identify him to be ‘the consignee’ under that B/L, it is called express mention
of Consignee.
In this
instance, the cargo would be delivered at the destination to such consignee
only since he is clearly identified from the face of the B/L. Such bills of
lading are known as ‘Consigned B/L’
or ‘Straight B/L’.
For simple understanding,
we can relate it with an ‘account payee
cheque’ which is always deposited in the account of the person whose name
is mentioned as ‘payee’.
Endorsement
–
It is very
common practice in International trade that the cargo might get re-sold during
the transit. In such a case, the physical transfer of the cargo is not possible
but the document of title needs to be altered in favour of the new buyer. This
alteration could be done by the way of endorsement in favour of the new buyer by
the existing consignee of the B/L.
A bill of
lading is treated to be a document of title and hence it is possible to
negotiate/transfer it by endorsement.
FAQ –
Consignee
Can consignee and notify party
be the same?
Yes,
consignee and notify parties can be the same. However, it is not necessary that
they have to be the same. They could be different parties and could be
mentioned separately under the head of “Consignee” and “Notify” in a bill of
lading (B/L).
Can there be more than one (01)
consignee?
No, there can
not be more than one (01) consignee in single B/L. Mentioning more than one
consignee will lead to confusion as to whose order the shipping line should
deliver the cargo at destination. There is an exception of part bills of lading
but it is an altogether a different sort of transaction.
Can a consignee nominate some
other person to receive the cargo?
Yes, a
consignee can nominate any other person to receive cargo either –
(a)
as an agent acting on behalf of the
consignee to facilitate him (like a forwarder or a clearing agent), or
(b)
as an owner of that cargo (in cases
where the cargo has been sold by the original consignee to another buyer during
transit).
In both
cases, the consignee will have to put his endorsement in favour of such person
at the back side of the bill of lading.
Is consignee a buyer of the
cargo?
It depends
upon the commercial transaction between the buyer and seller. 'Consignee' is a
shipping term and 'Buyer' is a commercial term. Consignee, in most cases, is a
buyer of the cargo but not necessary in all the cases. He could also be –
(a)
a clearing agent of the buyer, or
(b) his banker or any other financial
institution who has funded the buyer for the cargo.
Is consignee liable to clear the
cargo at the destination?
Yes,
Consignee is liable to custom clear the cargo and to receive delivery at
destination. In cases where the consignee refuses to take delivery, the
shipping line shall either -
(a)
bring back the cargo at origin to the
shipper, or
(b)
deliver it to any other person at the
destination under shipper's instruction, or
(c)
divert the cargo to other ports as
instructed by the shipper, or
(d)
take the custody of the cargo for
recovering dues. This is the last option resorted to by the shipping line.
As per rules
and regulations of several countries, the shipping line must secure consignee's
NOC (no objection certificate) to otherwise dispose-off the cargo. The matter
gets truly complicated in aforesaid circumstances.
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