There is sometimes great confusion as to the actual identity of shipper, consignee and notify party. Here I explain these terms which are widely used in shipping specially in the bill of ladings.
Shipper: Who is this guy ??
Many believe “Shipper” is the supplier or owner of the goods being supplied. It is true but not always. The business directory defines shipper as the party responsible for the shipment. When a buyer of goods enters into a contract with seller of the goods through sale contract, apart from other things they also decide who would arrange for the transport. In the multi-modal transport, they may decide which leg of transport is under whom. Who bears what risk is also the basis of various INCOTERMS defined by the International Chamber of Commerce.
If the buyer of the goods is responsible for sea transport, he would arrange for a ship to carry the goods and enter into a “Contract of carriage” with the carrier. The buyer here would be “Shipper” under “Contract of carriage”.
Shipper is a term related to “Contract of carriage” but is also closely related to sale contract. So the Shipper bears two hats. He is shipper under “contract of carriage” but he is buyer (or seller) under sale contract.
Consignee: Consignee is the person to whom the carrier (Ship) is supposed to deliver the goods. In most cases the consignee is the Buyer of the goods but not always. Consignee could be the agent nominated by the buyer. Consignee could also be the buyer’s bank.
Another principle different between the terms “Consignee” and “buyer” is that while “Consignee” is the term used in “contract of carriage”, the term “buyer” is used in “sale contract”.
Notify Party: Notify party is the party to whom the carrier is suppose to notify regarding the arrival ETA’s of the vessel. Notify party is then responsible for arranging the arrival formalities of the vessel. By now you must have guessed it rightly that notify party could be agent , receiver of the cargo or any other person/entity who has the interest in the arrival of the cargo.
While the shipper or carrier has the responsibility to keep the notify party abreast of the arrival details of the vessel and failing to do so may lead to unpleasant situations, you may sometimes find on bill of lading a clause where shipper and carrier assume no responsibility for failure to notify. This clause is particularly common in liner shipping.
* Though very unusual, however there is no restriction on having more than one notify parties. Usually there is only one notify party, who in turn informs all other interested parties regarding the arrival notifications of the vessel and cargo.
About Capt Rajeev Jassal
Capt. Rajeev Jassal has sailed for over 19 years mainly on crude oil, product and chemical tankers. He holds MBA in shipping & Logistics degree from London. He has done extensive research on quantitatively measuring Safety culture onboard and safety climate ashore which he believes is the most important element for safer shipping.
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