Meet our writer. Written by our resident freight forwarding and shipping expert. Bob Ronai

In CPT/CIP, the seller’s obligation is to deliver the goods to its own carrier on the agreed date or within the agreed period. See my earlier post on delivery for CPT/CIP.

These rules require the seller to provide the buyer with “the usual transport document(s)”. If agreed or customary, the document must also enable the buyer to claim the goods from the carrier. If the document is in negotiable form in several originals then the full set must be presented to the buyer.

What do banks typically state in a Letter of Credit (LC)?

Ports/airports of loading and destination, a latest shipment date, and presentation of an on board Bill of Lading (B/L) or an Air Waybill (AWB). Nowhere in these two rules is there an obligation of the seller to the buyer to ship from a particular port/airport, though the seller does have the obligation to contract for carriage to the named place of destination which may well be a Container Yard (CY) or Container Freight Station (CFS) attached to a destination port, or to an airport. There is no latest shipment date or period but a latest delivery date or period.

If the seller hands the goods to its carrier at its own premises such as is usual, say on the last day agreed, then shipment could occur many days or even weeks after that date.

I suggest/recommend that in such a case the seller inserts into the sales contract certain specifics which are actually outside of the CPT/CIP rules. 

1. State a latest shipment date of at least 14 days, better still 21 days, after the contractual delivery date.

2. State a broad-based port or airport of loading, for example “any European port/airport” instead of naming say “Hamburg” or “Frankfurt.”

3. State that no responsibility attaches to the seller if shipment is delayed and remind the buyer that A2 still applies to contractual delivery and B1 still obliges the buyer to pay the agreed price.

4. State that if the seller is unable to comply with the terms of the LC because of the buyer’s failure to ensure points 1 and 2, that payment is due immediately upon demand by the seller.

Yes, just like with FCA, it’s messy, because the rules were written without regard to their practical application and disregarded LCs.


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