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UNIT 3 Carriage Documentation 115

Unit 3 Notes
__________________
__________________
Carriage Documentation __________________
__________________
__________________
Objectives
__________________
After reading this unit you will be able to understand:
__________________
O The importance of transport documents and their crucial role in
__________________
smooth movement of the goods across borders.
__________________
O Complex web of procedures and documents involved in
transportation of the goods especially by the sea route. __________________
O International legal framework of the rules and regulations which
controls and monitor the movement of the goods by various modes
of transportation.

All the documents that serve the purpose of evidencing

shipment of goods, such as the bill of lading (in case of marine
transport), combined transport document (in case of multi-
modal transport), consignment note or way bill (for rail, road,
air transport), and cargo receipt (in postal or courier delivery)
are collectively known as carriage documents. Apart from
the function of evidencing the shipment of the goods, some
of these documents also serve other purposes. For example
Bill of Lading serves several purposes apart from the above
function:

1. Serve as a proof of delivery of the goods on board the

ship;

2. Serve as an evidence of the contract of carriage; and

3. A means of transferring title of the goods in transit to

another party.

4. Also identifies contracting parties and defines terms and

conditions of agreement.

The counterpart of Bill of lading in the air carriage is called

the Airway Bill (AWB). AWB differs from the Bill of Lading
in some ways as explained later in this chapter. Various
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Notes carriage documents used in international transactions are

__________________ described below:
__________________
__________________ Marine (or Ocean) Bill of Lading (B/L)
__________________ A contract to carry goods by sea is called the “contract of
__________________ affreightment” and the charges paid for the carriage of the
__________________ goods is called “freight”. A contract of affreightment can be
__________________ of the two forms, namely
__________________ 1. A charter party, where an entire ship, or a major part of
__________________ the ship is employed at the disposal of merchant (known
__________________ as a charterer); or

2. A bill of lading where the goods are to be carried in a

general ship which carries goods of a number of
shippers. The person consigning the goods is known as
a shipper.

In both these contracts, the ship owner (the carrier)

undertakes to carry the goods of a consignor (i.e., the
charterer or the shipper) safely and securely to the
contracted destination.

Bill of lading is a unique and an important document (perhaps

the most important document in ocean transport) issued by
the shipping company to the shipper against the delivery of
the cargo for the sea carriage to the port of destination. Due
to its multi functional nature, B/L has got a unique
importance in shipping and is also known as the ‘document
of title’. It means that the legitimate holder of this document
is entitled to claim the ownership of the goods as covered in
the original full set of B/L. Therefore, it would be impossible
for the importer to obtain the possession of the cargo unless
they surrender a signed original full set of bill of lading to
the shipping company at the port of destination.

Bills of lading, whether inland or ocean, can be issued in

either non-negotiable (straight) form or in negotiable form.
If the bill of lading is specified as being non-negotiable, the
carrier must deliver it only to the person named in the B/L
as “consignee”, thus the bill of lading acts both as a receipt of
goods and also as an agreement to transport these goods to a
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UNIT 3 Carriage Documentation 117
specific destination, to be delivered to the consignee, in Notes
return for payment of the carriage charges, if not already __________________
paid. If the bill of lading is specifically endorsed as being __________________
negotiable, ownership to the goods and the right to re-route __________________
the shipment are with the person who has ownership of the
__________________
bill of lading. Such bills of lading are issued to shipper’s
__________________
order, rather than to a specific, named consignee. Where
collection and payment is through banking channels, such __________________

as under a letter of credit or documentary collection, __________________

negotiable bills of lading is must. The exporter must “endorse” __________________
the “clean” (signifying that the goods have been boarded on __________________
the ship in good order and condition) bill of lading and deliver __________________
it to the bank in order to receive payment based on and in
consonance with the documentary credit opened by the buyer.

A document of title means that a lawful holder of a bill of

lading has the right to claim the goods from the carrier at
the port of destination. Besides, an endorsed bill of lading is
a ‘negotiable’ document, in which case, ownership of the
goods specified in it can be transferred from one party to
another one. The negotiability is made in the bill of lading
by endorsing ‘to order’ at the specified place on the bill of
lading. Therefore an exporter should insist upon ‘to order’
bill of lading from the shipping company against delivery of
the goods on board the ship. In this case, mentioned cargo
would be released on presentation of an original of ‘to order’
bill of lading. Whereas the “consignee named” bill of lading
is non-negotiable. Therefore, the “consignee named” Bill of
Lading should be accepted by an exporter only in case he/
she is confident of receiving timely payment at a later stage.
This can be done in the case of either advance payment or an
irrevocable letter of credit. An exporter should also insist
on a clean Bill of Lading since a “claused” (unclean) B/L is
normally not acceptable to the buyer unless it agrees for it
specifically in the documentary credit.

There can be several types of B/L. These have been described

below.

1. On board or shipped bill of lading: It certifies that

the goods have been placed “on board” the carrier. In a
FOB and C - terms an “on board” bill of lading is required.
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Notes 2. Clean bill of lading: Clean B/L does not contain any
__________________ adverse remarks on the quality or condition of the cargo
__________________ received. In fact, all importers must insist upon a clean
__________________ bill of lading.
__________________ 3. Dirty (claused) bill of lading: In case a shipping
__________________ company puts remarks on the B/L about the bad
__________________ condition of cargo or its poor /damaged packaging, it
__________________ becomes dirty or claused bill of lading. Generally, this
__________________ kind of bill of lading is not acceptable by most importers
__________________
unless explicitly stated in the contract of sale.
__________________ 4. Received for shipment bill of lading: It indicates that
goods have been received by the shipping company, but
shipment is still pending. In this case, cargo is under
the custody of the carrier lying at his warehouse. In case
of shipment on FAS (free alongside ship) terms, a
“received for shipment” bill of lading is required.

5. Through bill of lading: This is issued when cargo is

to be moved from one carrier to another in between. It
is a form of combined transport document where the
first carrier acts as the main carrier and is responsible
for the total duration of the voyage and is liable in the
event of any loss or damage to the cargo at any point of
the carriage.

6. Trans-shipment bill of lading: It is issued when trans-

shipment of cargo during the voyage, is needed. Since
the first carrier issuing the bill of lading acts as an agent
for the subsequent stages of the voyage, the first carrier
cannot be held liable for any loss or damage in the
subsequent stages of transport by the holder of trans-
shipment bill of lading. Importer generally prefers a
through bill of lading to avoid complication of
responsibility of the subsequent losses. But exporter
should insist that trans-shipment bill of lading should
not be prohibited at the time of finalizing the export
contracts, as it may become necessary to transship in
unavoidable circumstances.

7. Stale bill of lading: It is a bill of lading that is

presented well after the vessel has not only sailed but
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UNIT 3 Carriage Documentation 119
also the goods have already arrived at the port of Notes
destination. It may lead to delay in customs clearance __________________
of goods at the importer’s end, payment of demurrages, __________________
and the risk of loss or damage to the cargo at the port of __________________
destination especially in the case of perishable cargo. __________________
However, the issuing bank may issue the importer a
__________________
prior ‘shipping guarantee’ for delivery of goods and a
__________________
bond, for getting the goods cleared through customs in
__________________
the absence of the bill of lading. However, an importer
needs to surrender the properly endorsed bill of lading __________________

upon its receipt. __________________

__________________
8. Short forms bill of lading: It has got all the features
of a bill of lading except that it does not contain all the
preconditions given in the contract of affreightment.
Banks do accept short forms bill of lading, unless
specifically prohibited in the contract of sale or the
documentary credit.

9. House or freight forwarders’ bill of lading: It is

issued by the freight forwarder, consolidator, or non-
vessel carrier (NVC), under the Carriage of Goods by
Sea Act, 1971, it is a non-negotiable document. It is not
subject to the Hague Rules relating to the bill of lading
where the non-negotiable documents provide evidence
that they relate to the contracts of carriage of goods by
sea. Therefore it is not a normal B/L document which
serves several functions.

10. Charter party bill of lading: It is issued by the carrier

in case of charter ship. The charter party bill of lading
is normally not accepted for documentary credit
negotiation unless specifically allowed in it.

11. Bearer bill of lading: The bill stipulates that delivery

should be made to whosoever holds the bill of lading.
This type of bill of lading may be created explicitly or it
can be an “order bill” that fails to specify the consignee
whether in its original form or through an endorsement
in blank portion of the B/L. One can negotiate a bearer
bill by physical delivery.
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Notes Freight Paid vs Freight to Pay

__________________
The bill of lading may be endorsed ‘freight paid’ or ‘freight to
__________________
pay.’ If the freight is pre-paid by the exporter, the bill of lading
__________________
is marked as ‘freight paid’, while in case the freight has not
__________________ been paid, ‘freight to pay’ or ‘freight collect’ is marked on the
__________________ bill of lading for later collection of the same from the
__________________ consignee at the port of destination.
__________________
A bill of lading is issued by the shipping company in exchange
__________________
for mate’s receipt. Mate’s receipt is issued by the master of
__________________ the vessel who decides the condition of the cargo received
__________________ on board and put his remarks, if any, on the mate’s receipt.
This MR is then given to the shipper through port authorities.
Therefore, the shipping company ensures that all the clauses
appearing on the mate’s receipt are reproduced on the bill
of lading prior to issuing it to the shipper.

Shipping Permit
Before shipment, it is normal for the shipper to apply to the
physical distribution department of the carrier, for a shipping
permit. That permit will be issued when proof is submitted
that arrangements for ocean space for transportation have
been made. Shipments for ocean export may also move on
domestic bills of lading if the shipper wishes to make
arrangements for ocean transportation.

Airway Bill (AWB)

The counter part of B/L in the air shipment is Airway Bill,
which is also known as the air consignment note or airway
bill of lading. The airway bill is a receipt of goods and an
evidence of the contract of carriage, but unlike the ocean bill
of lading, it is not a document of title and, therefore, it is
non-negotiable. The goods are consigned directly to the
‘named consignee’ and are delivered to the consignee (i.e.,
the importer) without any further formalities, after the goods
are customs cleared. However, therefore, it does not have
the payment protection as in the case of a negotiable
document like B/L. Hence, it is risky to consign the goods
directly to the importer. One of the solutions to this problem
is, the exporter may insist upon a provision in the letter of
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UNIT 3 Carriage Documentation 121
credit to consign the goods to a third party, like the issuing Notes
bank, or arrange for receiving the payment on cash on __________________
documents basis. __________________
__________________
The International Air Transport Association (IATA) airway
bill is issued in a set of a dozen copies, three of which are __________________

originals. All of these three originals have the same validity __________________
and commercial significance as given below. __________________
__________________
1. First Original (Green): It is for the issuing carrier,
__________________
which is to be signed by the consignor or his agent.
__________________
2. Second Original (Pink): It is for the consignee. It is __________________
accompanied with the goods through the destination. It
is signed by the carrier or his agent.

3. Third Original (Blue): It is for the shipper, is signed

by the carrier and is handed over to the consignor or his
agent after acceptance of the goods by the carrier. For
payments, the bank requirement is satisfied by
presenting the Third Original, i.e., the shipper’s copy.

In case a transshipment clause is indicated in the AWB, the

trans-shipment may take place even if it is not allowed under
the letter of credit. If a split shipment is mentioned in an
airway bill, it means that a part of shipment would enter the
destination country at different times.

AWB no. is the most important information on the AWB. It

is normally impossible to trace the consignment and get it
cleared through customs without an airway bill or its
reference number. An airway bill covers both domestic and
international flights transporting goods to a specified
destination. It specifies the terms between a shipper and an
air carrier for the transport of goods. Included in the
document are the conditions, description of commodity,
liability limitations, shipping instructions, and applicable
transportation charges. In addition, the air waybill indicates
that the carrier has accepted the goods described in it and
obligates it to carry the consignment to the destination
airport according to specified conditions.

Now a day, air carriers normally use the uniform air way bill
as prescribed by the official Air Freight Tariff. The ‘tariff’
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Notes stipulates that the shipper must present and prepare a non-
__________________ negotiable air way bill with each shipment. No air way bill
__________________ or other air shipping document is negotiable, regardless of
__________________ what wordings are used herein. Goods valuation also must
__________________ be indicated on the air bill for tariff calculation purposes
only. A universal air bill of lading has been adapted by most
__________________
international air carriers.
__________________
__________________ Arrival Notices
__________________
Traditionally, an “arrival notice” is sent to the “consignee”
__________________
after the shipment arrives at the destination port. The notice
__________________
contains the same information as given in the air waybill. In
addition, the location of the goods and the time when goods
may be picked up is also given. While the telephone is often
used for this purpose, an arrival notice is still sent to verify
notification and as a confirmation of notifying the consignee.

Freight Bills

The freight bill is very similar to the bill of lading. In addition

to what is indicated in a B/L, it includes the total freight
charges to be collected from the consignee or the consignor
as the case may be. The freight bill is prepared by the agent
at destination when charges are to be collected from the
consignee. It is prepared by the originating carrier agent
when charges are prepaid by the consignor. If the freight
charges are prepaid, the freight bill is given to the consignor.
On the other hand, the original freight bill is raised to the
consignee for payment on a C.O.D. (collect on delivery)
shipment.

Various Carriage Slips of Paper

The shipment of cargo is still basically driven by several slips

of paper. Auditors, accountants and even frequent shipper
who are frequently involved with carriers should have a good
understanding of what those slips of paper mean and the
obligations and liability they may create. However many of
such information is taken care by the C&F agents.
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UNIT 3 Carriage Documentation 123
Combined Transport Document (CTD) Notes
__________________
The business environment is moving faster than ever before.
__________________
Increased competition at home and abroad means quality as
__________________
well as profitability must be preserved with lot of efforts
and efficient transportation systems. We live in a constantly __________________

evolving world where harmonization is becoming extremely __________________

important and the trade desperately requires an efficient __________________
and simple door to door transportation and liability system __________________
on the part of the seller. __________________

This was one of the reasons why ICC and UNCTAD __________________
developed the new UNCTAD/ICC Rules for Multimodal __________________
Transport Documents (MTD). With multimodal transport by
containers becoming popular, combined transport document
(CTD) is increasingly being used by the exporters.

The combined transport document covers the carriage of

cargo from the place of containerization (may be exporter’s
premises) to the place of destination using multi-modal
transport. While making shipments from inland container
depots (ICD), the exporters can stuff the goods in the
containers at his own premises and get it examined and
sealed by the customs authorities for dispatch to sea ports
in sealed containers. In cases where goods are exported from
inland container depots and the letter of credit does not
require a marine bill of lading, the combined transport
document (CTD), to be drawn as per the FEDAI (Foreign
Exchange Dealers Association of India) rules, is accepted by
the banks.

In situations where the letter of credit does not have

provision for the acceptance of the combined transport
document, the authorized dealers may accept the CTD with
undertaking from the combined transport operator (CTO)
stating that the CTD would be replaced by the ocean bill of
lading soon after the cargo is loaded on board the ship.
However, only after the replacement to the ocean bill of
lading, the documents are negotiated by the bank.

The CTD contains particulars regarding general nature of

goods, the name and principal place of business, the name of
the consignor, the name of the consignee if specified by the
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Notes consignor, the place and date of taking charge of the goods
__________________ by the MTO (Multimodal transport operator), the place of
__________________ delivery of the goods, the date or the period of delivery of
__________________ the goods at the place of delivery, whether it is negotiable or
__________________ non-negotiable, the place and date of its issue, etc. In addition,
the standard terms and conditions regarding basis of liability
__________________
of the MTO for loss or damage, delay etc. is incorporated in
__________________
the document. Relevant particulars contained in the
__________________
internationally accepted documents recognized by
__________________ International Chamber of Commerce (ICC) have been taken
__________________ into consideration while prescribing the document. The
__________________ MTOs can now issue on a uniform basis Combined Transport
Document as a negotiable instrument as per the Multimodal
Transportation of Goods Act, 1993 and the banks will have
no difficulty in discounting the bills when such a document
is presented.

Legal Aspects of Carriage Documents

Legally speaking, in most national and international legal
systems, a bill of lading is not a document of title, and does
no more than identify that a particular individual or an entity
has a right to possession at the time when delivery is to be
made. However through due endorsement it can be made
negotiable as agreed by the seller and the buyer in the
contract of sale. Therefore in real terms, a B/L is a quasi-
negotiable instrument. In this sense it is also a document of
title which can be transferred by endorsement and delivery.

Problems arise in the case, when goods are found to have

been damaged or lost in transit, or delivery is delayed /
refused. Because the “consignee” is not a party to the contract
of the carriage, the doctrine of privity of contract states that
a third party has no right to enforce the agreement. However,
whether this is a problem to the consignee depends on the
ownership of the goods and the responsibility assigned for
the risks associated with the carriage. This will be answered
by examining the terms of all the relevant contracts in a
particular trade transaction. If the consignor has reserved
title until payment is made, the consignor can sue to recover
his or her loss. But if ownership and/or the risk of loss have
been transferred to the consignee, the right to sue may not
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UNIT 3 Carriage Documentation 125
be clear in contract, although there could be remedies in tort Notes
/ delict (the issue of risk will have been most carefully __________________
considered to decide who should insure the goods during __________________
transit). __________________

Hence, a number of international Conventions and domestic __________________

laws specifically address when a consignee has the right to __________________

sue. The legal solution most often adopted is to apply the __________________
principle of subrogation, i.e. to give the consignee the same __________________
rights of action held by the consignor. This helps most of the __________________
more obvious cases of injustice to be avoided. For example __________________
US municipal laws address these matters. However, since
__________________
bills of lading are most frequently used in transborder,
overseas or airborne shipping, the laws of whatever other
countries are involved in the transaction covered by a
particular bill may also be applicable including The Hague
Rules, The Hague/Visby Rules and The Hamburg Rules at
international level for shipping, The Warsaw Convention for
the Unification of Certain Rules for International Carriage
by Air 1929 and The Montreal Convention for the Unification
of Certain Rules for International Carriage by Air 1999 for
air waybills, etc. It is customary for parties to the bill to agree
which country’s courts shall have the jurisdiction, and the
municipal system of law to be applied in that case. The law
selected is termed the proper law in private international
law and it gives a form of extraterritorial effect to an
otherwise sovereign law, e.g. an Indian consignor contracts
with a Greek carrier for delivery to a consignee based in
Vancouver: they agree that any dispute will be referred to
the courts in Vancouver (since that is the most convenient
place) but that the Vancouver courts will apply Greek law to
determine the extent of the carrier’s liability.

In India, the law relating to carrying of goods is contained in

the following enactments:

1. In case of carriage of goods by land: (i) The Carriers

Act, 1865. (ii) The Railways Act, 1989.

2. In case of carriage of goods by sea: (i) The (Indian)

Bills of Landing Act, 1856. (ii) The Carriage of Goods by
Sea Act, 1925. (iii) The Merchant Shipping Act, 1958.
(iv) The Marine Insurance Act, 1963.
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Notes 3. In the case of carriage of goods by air: The Carriage by

__________________ Air Act, 1972.
__________________
Wherever there is no specific provision for a particular
__________________
matter in these statutes, then the Indian Courts resort to
__________________ English Common Law.
__________________
Definition of a Contract of Carriage: A contract of carriage
__________________
of goods is a contract of bailment for reward, or location operis
__________________
faciends. However, the contract of bailment is modified by
__________________
the different statutes mentioned above in the case of carriage
__________________ of goods by land, sea or air.
__________________
Carriage of Goods by Sea
A contract to carry goods by sea is called the “contract of
affreightment” and the consideration or charges paid for the
carriage is called the “freight”. A contract of affreightment
may take either of the two forms, namely

1. a charter party or

2. a bill of lading.

In both these contracts, the ship owner (the carrier)

undertakes the responsibility of carrying the goods of a
consignor (i.e., either the charterer or the shipper) safely
and securely to the destination.

A contract of affreightment—whether in the form of a charter

party or a bill of lading — is governed by the (Indian) Bills of
Lading Act, 1856 and the Carriage of Goods by Sea Act, 1925.

Conditions Contained in a Contract of Carriage by Sea.

The terms included in a contract of carriage by sea are of

two kinds. These are: (i) Express terms, and (ii) Implied
terms.

Express terms are those which the parties have specifically

agreed to and embodied in the contract.

Implied terms are those which law implies in every contract

of carriage by sea unless excluded specifically. There are four
implied terms:
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UNIT 3 Carriage Documentation 127
1. Implied warranty of seaworthiness. The ship owner, Notes
when he enters into a charter party for a voyage __________________
warrants that the ship is seaworthy. This is an assurance __________________
by the ship owner, at the time of entering into the charter __________________
party, that (a) the ship is fit to encounter the ordinary __________________
perils of navigation during voyage and (b) to carry the __________________
specific cargo.
__________________
This warranty of seaworthiness extends only to (a) __________________
seaworthiness at the time of sailing and (b) fitness at __________________
the time of loading the cargo. Once the ship has sailed __________________
or the goods are on board, this warranty ceases to __________________
operate. But in case the voyage is divided into stages,
the ship must be seaworthy at the commencement of
each voyage.

2. Non-deviation of voyage. Also there is an implied

condition that there shall be no unnecessary deviation.
Deviation means the going off from the settled or the
usual or customary course of voyage between the two
termini.

3. Implied warranty of commencement of voyage.

Another implied warranty is that the ship shall be ready
to commence the voyage and shall carry out the same
with all reasonable dispatch and diligence.

4. Shipper not to ship dangerous goods. The shipper

(i.e., the consignor of goods in case the charterer
undertakes to carry goods of others under bills of lading)
shall not ship dangerous goods. If the shipper ships
dangerous goods and if on account of it the charterer
suffers any damage, he can recover it from the shipper.

It may be noted that a bill of lading may be issued even where

the ship is chartered. In such a case “charter party” will be
the document evidencing the “contract of affreightment”,
while the bill of lading would only operate as a mere
acknowledgement of the receipt of the goods.
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Notes Carriage of Goods by Land

__________________
As mentioned above, the following two statutes govern the
__________________
carriage of goods by land: (i) The Carriers Act, 1865. (ii) The
__________________
Railways Act, 1989.
__________________
__________________ The Carriers Act, 1865. This Act defines the term “common
__________________ carrier” and provides for his rights, duties and liabilities. As
__________________ regards matters not covered by this Act, the rules of English
__________________ Common Law will apply.
__________________ Rights of a Common Carrier. His rights are:
__________________
(i) He is entitled to the settled remuneration and in case
no remuneration was settled, to a reasonable
remuneration.

(ii) He has a right to refuse to carry goods under certain

circumstances (as enumerated under the duties of a
common carrier).

(iii) He has a lien on the goods for his remuneration. He can

refuse to deliver them until his charges are paid.

(iv) If the consignee refuses to take delivery of the goods,

when tendered, the common carrier has a right, to deal
with the goods as he thinks reasonable and prudent
under the circumstances.

(v) He has a right to recover reasonable expenses incurred

by him as a result of the consignee’s refusal to take
delivery. After giving notice to the consignee, the
common carrier may even sell perishable goods.

(vi) He can recover damages from the consignor if the goods

are dangerous or are loosely packed and the carrier
suffers injury there from.

(vii) He can limit his liability subject to the provisions of the

Carriers Act.
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UNIT 3 Carriage Documentation 129
Duties of a Common Carrier Notes
__________________
A common carrier’s duties are:
__________________
1. a common carrier is bound to carry goods of all persons __________________
who choose to employ him. He can, however, refuse to
__________________
carry goods under the following circumstances:
__________________
a If there is no accommodation in the carriage;
__________________
b If the person employing him is not willing to pay __________________
reasonable charges for the carriage of goods; __________________
c If the goods are such which he is not accustomed to __________________
carry; __________________
d If the goods are to be carried over a route which is
not his regular route;
if the goods are-dangerous and as such subjecting
him to extraordinary risk;
e If the consignor refuses to disclose the nature of the
goods to be carried; and
f If the goods are not properly packed.
g If a carrier refuses to carry the goods of a person for
any reason other than those mentioned above, he
may be held liable for damages.
2. He must carry the goods over the usual and customary
route and take all reasonable precautions for their safe
carriage. He must not deviate from the usual route
unless rendered necessary by exceptional circumstances.
3. He must deliver the goods at the agreed time and if no
time had been fixed, within a reasonable time.
4. At Common Law, he is an insurer of the goods in the
sense that he warrants to carry the goods safely and
securely.
Liabilities of a Common Carrier: The liability of a common
carrier of goods is laid down in the Carriers Act, 1865. For
this purpose, the Act has classified the goods into two
categories:
(i) Scheduled goods and
(ii) non-scheduled goods.
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Notes The scheduled goods are those which are enumerated in a

__________________ Schedule to the Act. They are valuable articles like gold,
__________________ silver, precious stones and pearls, bills and hundis, currency
__________________ and bank notes, glass, china silk, articles of ivory, time pieces,
__________________ musical and scientific instruments, etc. All other goods are
non-scheduled.
__________________
__________________ For scheduled articles exceeding Rs. 100 in value, the carrier
__________________ is liable for loss and damage only:
__________________
(i) if the value and the description of the goods are
__________________ disclosed by the consignor to the carrier; or
__________________
(ii) if the loss or damage is due to a criminal act of the
carrier, his agent or servant.

The carrier can charge extra for carrying scheduled articles,

but he cannot limit his statutory liability by any special
agreement.

As regards non-scheduled articles, a common carrier can

limit his liability by special agreement with the consignor.
But even in this Section case he will be liable under 8 of the
Act (explained below).

In case of loss or damage, the claimant must notify the carrier

within six months of the date of knowledge of the loss or
damage.

Carriage of Goods by Rail

The carriage of goods by rail is regulated by the Railways
Act, 1989. Sections 93 to 112 of the Railways Act, 1989 contain
provisions on the responsibilities of the Railway
administration as the carrier of the goods.

Distinction between a Common Carrier and a Private

Carrier.

The distinction between the two is as follows:

(i) a common carrier publicly undertake to carry from place

to place the goods of any person who chooses to hire
him. A private carrier does not carry regularly from
place to place but is a casual carrier.
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UNIT 3 Carriage Documentation 131
(ii) A common carrier is bound to carry the goods of any Notes
person provided certain conditions are satisfied. A __________________
private carrier is free to accept or reject the goods for __________________
carriage by any mode of transportation. __________________

(iii) The liabilities of a common carrier are determined by __________________

the Common Carriers Act, 1865. A private carrier’s __________________

liability is not determined by this law. He is liable as a __________________
bailee as given in the Indian Contract Act, 1872. __________________
__________________
Summary __________________
Sea transportation remains the most common mode of __________________
transportation of the goods across the borders, accounting
of 99% of the international trade.

The electronic documentation of the carriage documentation

is limited by the inability to find a fool proof electronic
alternative to marine bill of lading which is semi negotiable
instrument.

Shipping guarantee by the reputed banks can go a long way

in making the life easy for regular importers across the globe.
It can helping in tapping lost opportunity due to delays in
the arrival of the goods at the port of destination.

Review Questions
1. Explain and discuss various carriage documents and their role in the
smooth movement of cargo from the warehouse of the exporter to the
warehouse of the importer?

2. Explain in detail the nature and functions of various kinds of Marine

Bill of Lading? Discuss how does a Bill of Lading differ from an Air Way
Bill?

3. Discuss various legal aspects of carriage documents.