In the logistics sector, the terms "consignor" and "consignee" play a crucial role to move the perishable goods . This bonding between the two parties is connected with the logistics chain, ensuring that goods are safely delivered from the exporter to the importer.
Throughout the shipping process, goods frequently pass through several hands. This export voyage involves a network of third-party service providers, each playing a significant role in facilitating the smooth transit of your perishable cargo. From freight forwarders to customs house agents, these intermediaries ensure that the logistics operation is carried out seamlessly.
The consignor (who sends the goods) and the consignee (who receives them) strive for the best efforts to provide logistics support that enhances global trade. Both parties contribute to a meticulously streamlined process to ensure that goods move from origin to destination, maintaining integrity.
What is the meaning of consignor in terms of shipping?
The consignor is the individual, business, or organization that initiates the shipment of goods. A consignor, also known as the seller or shipper, is entrusted to send the goods and can choose the carrier or shipping company. Once the carrier receives the goods in optimal condition and is ready to ship them, they issue a bill of lading to the consignor. This document includes details of the consignor, consignee (buyer), notification party, and carrier involved in the shipment.
What is the role of the consignor?
The consignor (or shipper) sends the perishable goods to a freight carrier for delivery to the consignee. However, ownership of the goods isn't entitled until the consignee signs the bill of lading (BOL) upon receipt of the shipment.
The consignor is responsible for carrying out several duties, ensuring that the consignee receives the cargo on the exact date. These duties include:
- Proper Documentation: The consignor must get all the essential certificates and permits to ensure smooth clearance of goods at the destination port. This includes a certificate of origin, issued by the Chamber of Commerce in the consignor’s country, which verifies the origin of the goods. Prior to shipping, a health certificate is required to move the perishable goods from end-to-end port.
- Shipping Goods to the Port of Origin: The consignor makes the arrangement for transporting goods from their warehouse to the port of origin. This process involves the loading and unloading of goods and arranging any necessary equipment to facilitate these tasks.
- Compile all the export documents and forward them to the consignee. The consignor obtains the bill of lading and shipping bill from the carrier. Besides these documents, they send the payment invoice, packing list , any required certificates, and other documents needed for clearing customs duties and taxes to the consignee.
- Coverage of Insurance for the Shipment: As per the agreed-upon terms between the consignor and the buyer, the cost of insurance can be covered by either party. For CIF (cost, insurance, and freight) Incoterms , the consignor needs to bear the insurance cost. In the terms of CFR (cost and freight) Incoterms, the consignee or end customer is responsible for insuring the goods during transit.
There are some rights and obligations that need to be abided by by a consignor:
Claim Ownership: The consignor can own the goods until they are transferred to the buyer, maintaining control throughout the transit.
Claim Entitlement: The consignor can file a claim against the carrier for loss, misplacement, or damage to the goods during transit, as mentioned in the shipping contract.
Contract of Shipping: The contract of shipping outlines the terms, liabilities, and duties of all parties involved, providing a legal framework for transport agreements.
Legal Claim: In the event of disputes or losses, the consignor can go ahead with legal proceedings against the carrier as per the terms of the shipping agreement.
Essential Documentation: The consignor needs the duplicate consignment note along with the correct documents and evidence to file a claim for the goods.
Prohibition and Rules: Consignors should check carrier exclusions and relevant regulations, such as the Carmack Amendment for interstate shipments and the Carriage of Goods by Sea Act (COGSA) for ocean shipments, to understand their rights and responsibilities.
What is a consignee?
A consignee is the party that receives goods from the consignor. This can be either the final buyer or a middleman that acts on behalf of the final buyer. The buyer assigns a freight forwarder to collect the goods. The consignee is responsible for collecting the goods from the carrier, fulfilling formalities like customs duty payments, and arranging transport to their warehouse. If the consignee is the final buyer, they can claim ownership of the goods. The bill of lading contains details about the consignee and can list a notified party.
The carrier informs a notified party to take care of the goods upon their arrival. The notify party and the consignee are usually the same, but sometimes the notify party includes the buyer, a clearing agent, or another third party.
The responsibilities of the consignee in maritime shipping include:
- Receive and examine the goods upon arrival at the destination port.
- Complete all the necessary paperwork required for customs clearance.
- Make sure the shipment is labeled correctly.
- Move the shipment to their warehouse.
- Ensure to properly separate and classify goods during storage.
Some rules and obligations for a consignee are as follows:
- Title of the Goods: After the payment of the goods is done, the consignee obtains the rights and title to the goods as stated in the shipping contract.
- Demand Delivery of Goods: In accordance with the contract of carriage, the consignee has the exclusive right to demand delivery, allowing them to claim ownership and take the goods into custody.
- Claim Entitlement: If the goods are damaged or not delivered on a specific date, the consignee has the right to file a claim against the carrier for compensation, as outlined in the shipping agreement.
- Freight Forwarder as Consignee: When a freight forwarder is listed as the consignee on the bill of lading, they can carry the consignee's rights and responsibilities. But the freight forwarder needs to agree to the contract terms.
- Enforcement of Contractual Terms: If a freight forwarder is listed as the consignee without consent and doesn’t accept or request the goods, the carrier can't impose the contract terms.
Conclusion
In summary, the roles of consignor and consignee are a main force in the maritime industry, entrusted with specific responsibilities and rights. Understanding their responsibilities ensures smooth international transactions, and adherence to the shipping agreements facilitates efficient supply chain logistics.
At Citrus Freight , we understand the intricacies of the safe and timely shipping of your perishable goods. With our best logistics solutions, we enable export businesses to find reliable and cost-effective shipping options to meet their expectations.