Bill of Lading Discrepancy: Issued by Charterer Rather Than Carrier

Introduction

A bill of lading must be issued by the carrier or its agent to satisfy the requirements of UCP 600 Article 20. When a documentary credit requires a bill of lading and the document is issued by a charterer (the party that has chartered the vessel) rather than the carrier (the party responsible for transporting the goods), a discrepancy arises. This guide examines the regulatory distinction between carrier and charterer, identifies the failure modes that produce this discrepancy, and provides a structured process for ensuring the bill of lading is issued by the correct party.

Failure Mode Analysis

Failure 1: Bill of Lading Issued by Charterer in Its Own Name

A charterer charters a vessel and issues a bill of lading in its own name as the issuing party. The credit requires "bill of lading issued by the carrier." The bank raises a discrepancy because the bill of lading is issued by the charterer, not the carrier.

Root cause: The charterer treated itself as the carrier and issued the bill of lading without identifying the actual carrier.

Failure 2: Bill of Lading Does Not Identify the Carrier

A charterer issues a bill of lading and signs it as "agent for carrier" but does not name the carrier. The bank cannot identify the carrier from the document's face and raises a discrepancy under Article 20(a)(i).

Root cause: The bill of lading omitted the carrier's name, making it impossible to verify that the document was issued by or on behalf of the carrier.

Failure 3: Bill of Lading Signed by Charterer's Agent

The charterer's agent signs the bill of lading without identifying itself as the carrier's agent. The bank cannot determine whether the signing party is the carrier, the charterer, or a third party. The discrepancy arises from the ambiguity of the signing party's identity.

Root cause: The bill of lading's signature block did not clearly identify the signing party's relationship to the carrier.

Failure 4: Credit Expressly Permits Charterer's Bill of Lading

The credit expressly states "charter party bill of lading acceptable." The beneficiary presents a charterer's bill of lading. The bank raises a discrepancy, arguing that even if the credit permits a charter party bill of lading, Article 20 requires the carrier's name to appear on the document.

Root cause: Misunderstanding of the interaction between the credit's express permission for charter party bills of lading and Article 20's carrier identification requirement.

Deterministic Resolution Architecture

Step 1: Identify the Credit's Bill of Lading Requirements

Extract from the credit: (a) whether a bill of lading is required, (b) whether the credit requires the bill of lading to be issued by the carrier, (c) whether charter party bills of lading are permitted, and (d) any other transport document requirements.

Step 2: Determine the Carrier and Charterer Relationship

Before arranging shipment, identify: (a) who is the carrier (the party that will transport the goods), (b) who is the charterer (the party that has chartered the vessel), and (c) whether the charterer is acting as the carrier's agent for bill of lading purposes.

Step 3: Instruct the Carrier to Issue the Bill of Lading

Request the bill of lading directly from the carrier or its authorised agent. Ensure the carrier issues the document in its own name and signs it as the carrier.

Step 4: Verify the Carrier's Name Appears on the Bill of Lading

Before presentation, review the bill of lading for: (a) the carrier's name in the header or identification section, (b) the carrier's signature or the signature of its authorised agent, and (c) clear identification of the signing party as the carrier or the carrier's agent.

Step 5: Address Charter Party Situations

If the vessel is chartered, ensure the bill of lading is issued by the carrier (the vessel's operator) rather than the charterer. If the credit permits charter party bills of lading, ensure the document still identifies the carrier under Article 20(a)(i).

Step 6: Cross-Check Against the Credit's Terms

Compare the bill of lading's issuing party against the credit's requirements. If the credit requires a carrier's bill of lading and the document is issued by the charterer, request a replacement from the carrier.

Step 7: Present the Corrected Bill of Lading

Submit the carrier-issued bill of lading as part of the complete document set.

Step 8: Maintain Records of the Carrier and Charterer

Keep records of the carrier's identity, the charterer's identity, the bill of lading's issuing party, and any correspondence with the bank about the carrier/charterer distinction.

Conclusion

The carrier/charterer distinction on a bill of lading is a fundamental compliance requirement under UCP 600 Article 20. The bill of lading must identify the carrier by name and be issued by or on behalf of the carrier. The resolution architecture above ensures that the bill of lading is obtained from the correct party and presents clearly on its face.

FAQ

Q1: Can a charterer issue a bill of lading under UCP 600?
A charterer may issue a bill of lading only if it is acting as the carrier's agent and the document clearly identifies the carrier. If the charterer issues the bill of lading in its own name without identifying the carrier, the document is discrepant.

Q2: What is a "charter party bill of lading"?
A charter party bill of lading is a bill of lading issued in connection with a chartered vessel. The credit may expressly permit or prohibit charter party bills of lading. If permitted, the document must still satisfy Article 20's carrier identification requirement.

Q3: Does the ICC accept charter party bills of lading?
The ICC does not prohibit charter party bills of lading. However, the credit must expressly state that they are acceptable. If the credit is silent, the bank may reject a charter party bill of lading.

Q4: How does a shipper obtain a carrier's bill of lading when the vessel is chartered?
The shipper requests the bill of lading from the carrier (the vessel's operator), not the charterer. The carrier issues the bill of lading in its own name and signs it as the carrier.

Q5: Can the bank verify the carrier's identity from the bill of lading alone?
Yes, if the bill of lading clearly states the carrier's name. If the carrier's name is not on the document, the bank cannot verify the issuing party's identity and will raise a discrepancy.

Source Notes

• Source file: 2026-07-14_bill-of-lading-discrepancy-issued-by-charterer-not-carrier.md
• Query: bill of lading issued by charterer transport documentary credit site:iccwbo.org
• Source results (5):
• "Position Papers n° 1, 2, 3, 4 on UCP 500" — ICC Digital Library (Apr 2019): Historical ICC guidance on transport document requirements that informed UCP 600's approach to carrier identification. Context only.
• "Set of Guidance Papers on Recommended Principles and Usages around UCP 600" — ICC (Mar 2023): Official ICC guidance addressing carrier vs. charterer issues on bills of lading. Context only.
• "Incoterms 2020: CFR or CIF?" — ICC Academy (Aug 2024): Incoterms guidance relevant to transport document requirements. Context only.
• "Uniform Rules for Documentary Credits (UCP 600) — eBook" — ICC Academy (Dec 2024): Full UCP 600 text. Context only.
• "UCP 600 — Uniform Rules and Practice for Documentary Credits — Including eUCP Version 2.1" — ICC (Jul 2023): Primary rule text. Context only.