Air Transport document (UCP 600 – Article 23) | Trade Samaritan

Air Transport document (UCP 600 – Article 23)

Air Cargo transport constitutes only a meager 1% of the total world trade volume but 30% of the total world trade value, this is because air transport is targeted and more suitable for high value or time sensitive products.

Air transport is the most reliable, efficient and speedy medium of transport.  60% of the air cargo is shipped via passenger planes, balance 40% is transported via exclusive cargo planes.

Airway bill is a transport document issued by an international airline for the consignment/goods and also evidences the contract of carriage. Contents of a typical airway bill are shipper’s name and address, consignee’s name and address, an 11 digit no, 3 letter origin airport code,3 letter destination airport code, declared shipment value for customs, number of pieces, gross weight, a description of the goods and any special instructions. (Inflammable or perishable or fragile) It also contains the conditions of contract.

International Air Transport Association (IATA) is the trade association of airlines. As per the latest publication of IATA, the region-wise freight market looks like below

Freight market

Now lets us understand in detail the requirements stipulated by UCP 600 and ISBP 745 for the inspection of Airway bills under credits.

Basics

1)      Air transport document is a transport document covering dispatch from airport to airport

2)      Can be however named need not be named as “air way bill’ even the credit names it that way

3)      Is a straight consigned/Non-negotiable document, it is not document of title hence is non-negotiable

4)      Must indicate that goods have been accepted for carriage

5)      Must be an ‘original for shipper or consignor’ even if LC stipulates full set

6)      Contains terms and conditions of carriage or make reference to another source containing the same

7)      Contents of terms and conditions will not be examined by the Banks/Financial institutions

8)      Will be considered as discrepant only if it explicitly confirms the occurence of the defective state of the goods or packaging

Capture

9)      The word ‘Clean’ need not be mentioned even if it required by the credit. And even if the word ‘Clean’ appears to have been deleted, does not confirm any discrepancy

‘Packaging may not be sufficient for the journey’ – not a discrepancy

‘Packaging is not sufficient for the journey’ – is a discrepancy

10)  Is also known as an Air Consignment note

11)  Date of dispatch = Date of shipment; else date of issuance = Date of dispatch

Costs and Trade term

12)  Trade term should not be a replica but must not conflict with the trade term required by the credit.

13)  Words of the similar effect are acceptable

14)  If credit states costs additional to freight are not acceptable, incidental costs arising out of the delay in unloading the goods do not constitute a discrepancy.

Airports

15)  Airport of departure and arrival should be as per documentary credit

16)  Must indicate the airport of departure and destination, the country name even if stated in the credit need not be mentioned on the airway bill

17)  Same applies to the geographical areas however the actual airports within the specified geographical area have to been indicated on the air way bill.

18)  Airports of departure and destination can mentioned in their IATA codes for example LAX instead of Los Angeles is not a discrepancy

 Signatures

19)  Can be signed by the Carrier or its Agent (Carrier identified)

20)  Corrections of the original set must be to be authenticated. Signatures can be of a different Agent but the naming convention and the identification should be in compliance with the requirement

21)  Copies do not require any authentication of corrections/changes made

22) Basic signature requirements are the same as that for a multimodal transport document and can be viewed at http://tradesamaritan.com/world-trade/documents/multimodal-transport-document-art-19

Parties

23)  If specified in the credit, there are can be more than one notify parties

24)  If Applicant is appearing on the notify party or consigned to column, the name and the address should be the same as that of the credit

25)  If the goods are consigned to the applicant or the issuing bank, their addresses need not be mentioned in the Consigned to column

26)  Control over goods – Banks must insist upon holding Consignor’s copy which will prevent the shipper from exercising its right to change the destination or Consignee of the goods

27)  Banks may also insist upon being named as the Consignee of the goods

28)  Delivery of goods is made to the named Consignee against proper identification or against a Delivery Order

29)  Air transport document must indicate the name of the carrier. Carrier should be identified by full name and not the IATA code, Carrier ‘LH’ is a discrepancy, it should be mentioned as ‘Lufthansa’

IATA code is acceptable for ports but not for the carrier. For example BA instead of British Airways is a discrepancy but SFO instead of San Francisco is not a discrepancy

30)  Airway bill should not be issued as ‘to order’ or ‘to order of’ a named party because it is not a document of title

31) If mentioned as blank ‘to order’ in the consigned to column, it means that it is consigned to the issuing bank or the applicant

Issuer

32)  House airway bill is acceptable provided forwarding agent issuing it is appears to be named as the carrier, or agent of a named carrier

33)  An airway bill is not to be rejected only because it indicates a House Airway bill or Master Airway bill unless the documentary credit does not allow house airway bill

34)  If LC is calling for Airway bill and House airway bill/ Forwarder’s Airway bill is submitted then it should be signed as per Article 23 (this article) ie Carrier or Agent (carrier identified) but if LC states that House airway bill/Freight Forwarder’s airway bill is acceptable then it should not be in accordance with the article ie the Freight Forwarder can sign in his capacity and Carrier need not be identified

35)  A stipulation in a credit that “Freight Forwarder’s air waybill is not acceptable” or “House air waybill is not acceptable” or words of similar effect will be ignored unless further specification is provided.

 Trans-shipment & partial shipment

36)  Multiple sets of airway bill alone do not constitute partial shipment if the goods are stated to be on the same flight and destination

Dispatch on more than one aircraft will be considered as a partial shipment but dispatch on the same aircraft with more than one set/original airway bills will not be considered as a partial shipment

37)  Partial shipment not allowed

  1. If multiple sets of airway bills are presented the latest of the shipment dates date will be considered for the calculation of the presentation period and all shipment dates should fall on or before the last date of shipment stated in the credit

38)  Partial shipment is allowed

  1. If multiple sets of airway bill are presented, the earliest of the shipment dates will be considered for the calculation of the presentation period.

39)  Regardless of partial shipment allowed or not, all the shipment dates should fall on or before the last date of shipment stated in the credit.

40)  If documentary credit states that Transshipment is prohibited then the entire shipment should be covered under single airway bill

 

Comments:

  • cvrk

    Good one… submission of air consignment note when the credit calls for airway bill is a discrepancy or not?

    • pallaviwd

      Thanks! Not a discrepancy.

  • jassijohny john

    do submit an article of charter party b/l