The document discusses shipping terms and processes. It defines shipping as the physical movement of goods from one point to another, controlled by a shipping or logistics company. When goods are shipped in containers, the sender works with shipping lines, freight forwarders, and customs brokers. A bill of lading is the key legal document that details the goods, nature, quantity and destination. It acts as a receipt and can determine ownership. Bills of lading can be negotiable or non-negotiable. INCOTERMS define important shipping terms like DDP, EXW that clarify responsibilities and costs between buyer and seller. The 2020 version of INCOTERMS includes changes like clarifying insurance requirements and costs for different terms.

1. Shipping and
Shipping Terms
Mr. Sudipta Sarkar

2. Shipping
Shipping is the physical moving of good
from one point to another. The shipping
process follows the manufacture and
the packing of goods and will be
controlled by a shipping or logistics
company.
If goods are bulky and need to be
carried in a container, sender/exporter
need to work with a shipping line,
freight forwarding company, and
customs clearance brokers.
The shipping company removes all
complexities for the owner of the goods
by handling essential documents, like:
Commercial Invoice; Insurance
Certificate; Bill of Lading.

3. Participants in International
Shipping Process
 Importer
 Exporter
 Banks
 Insurance Company
 Freight Forwarders
 Customs/ Customs House Agents
(CHA)
 Shipping Company
 Port Authorities
 Intermodal Transport Providers
Agent
ConsigneeSeller

4. Bill of Lading (B/L)
A bill of lading is a legal document that captures
concise details of the goods being carried by the
shipper.
The B/L operates as a shipping receipt since it
points out the nature, quantity, and destination of
the goods.
The bill of lading can be classified based on
Negotiation, Execution and Method of operation

5. Purpose of Bill of Lading
It acts as a piece of
evidence for the carriage
contract containing the
terms and condition under
which the goods
transportation will be
carried out.
It represents as a receipt
which endorses that the
carrier has received the
cargo as per the contract
and the goods are
received in good
condition.
It is a document of title,
permitting the sale of
goods in transit and the
raising of financial credit.
Most of the local and
international system does
not consider a bill of
lading as a document of
title. It provides the right
for the delivery to be
made to the possessor

6. Type of B/L’s based on Negotiation
Negotiable Bill of Lading
A clear instruction is provided to make the
delivery of the goods to anyone having the
possession of the original copy of the BL at
discharge port.
This BL itself signifies the title and control
of the freight.
In the absence of original bill copy, the
freight will not be released.
Non-negotiable Bill of Lading
This type of BL fixes a specific consignee/
name of the receiver to whom the freights
will be shipped and delivered.
It does not itself serve the ownership of the
goods.
Under this bill type, the assigned receiver/
buyers can claim the cargo by confirming
their identity.

7. Type of B/L’s
based on
Execution
Straight BL : Reveals that the goods are consigned to a
specified person and it is not negotiable and from the
banker’s point of view, this type of bill of lading is not
safe. This type of bill is prominently used for military
cargo.
Open BL/ Switch BL : This is a negotiable bill of lading
where the name of Consignee can be changed with
consignees’ signature and thus transferred. This can be
transferred multiple times.
Bearer BL : This BL states that delivery shall be made to
whosoever holds the bill. This BL can be negotiated by
physical delivery. They are used for bulk cargo that is
turned over in small amounts.
Order BL : This BL uses express words to make the bill
negotiable. This means that delivery is to be made to the
further order of the consignee using words such as
“delivery to A Ltd. or to order or assigns.

8. OBL vs Sea Way/ Express BL

9. Documents/ BL Handover Procedure though Bank

10. INCOTERMS
Shipping terms are also
called INCOTERMS.
Incoterm is the elided
word that
shortens International
Commercial Terms.
They are 3 letter
abbreviations recognized
throughout the world.
They tell each party
concisely what is
expected of them in
selling and in contract
negotiations.
In all international
transactions, shipping can
be paid for and done by
either the shipper or the
consignee. For example,
DDP, EXW.
Consequently, shipping
terms tell where costs are
transferred and where the
risk is transferred from
the shipper to the
consignee.
Basically, Incoterms
indicate three things.
Who arranges for transport & the carrier Who pays for transport Where/ when does title (ownership) of goods transfer from seller to buyer

11. Sea & Inland
Waterway
Transport

12.  DAT (Delivery at Terminal) Incoterm changed to DPU (Delivery at
Place Unloaded), to broadly cover ‘any place, whether covered or
not’.
 Insurance points are clarified in CIF and CIP incoterms rules. Earlier
insurance is required under clause C. But in Incoterms 2020, CIP
requires insurance complying with Institute Cargo Clause (A) whereas
CIF requires insurance under Clause C. Because Clause A covers higher
level of insurance (e.g.- manufactured goods), whereas a lower level
of cover from Clause C would probably apply to the commodities
world.
 Costs and cost structures are now clarified. All cost allocated by each
Incoterms rule are now listed, for the seller in A9 and for the buyer in
B9. Earlier user had to look across several articles within each rule to
see who bore the costs.
 Security in relation to transport is now clearly detailed
 Provisions to allow for own transport rather than assuming 3rd party
transport. Earlier in Incoterms 2010 rules assumed that goods carried
from the seller to the buyer were via a 3rd party.
 FCA, FOB and Bills of Lading
 Presentation and design is much simpler and user friendly
7 Key
Changes to
Incoterms
2020

14.  THANK YOU.
Mr. Sudipta Sarkar