Javed Mallick
THE shipping business in the world got a fresh impetus with the introduction of containerized cargo handling system. Around the world, containers are now being moved through ships, barges, trains, trucks and airplanes as well. It actually widens the scope of the shipping business and as a result loading, unloading and management of the cargo got easier in a most cost-effective manner.
With the onset of these unique opportunities, day by day multimodal transport operators are coming in the limelight and a new breed of business operators known as "Freight Forwarders" have emerged. In the international arena, the Freight Forwarders are practising the international rules and norms abiding by the legal provisions of the country of origin concerned. In our country a good number of Freight Forwarders are also operating and contributing to the country's export-import business, with their valuable services.
It has long been felt that the operations of Freight Forwarding business should be monitored through a legal frame and they need to be provided with some sort of licence or recognition, so that they can run their business with specific guidelines and confidence. In this regard, several attempts had been taken but those were not implemented because of various legal impediments.
Fortunately, this year the government has formulated "The Freight Forwarders (Licensing and Operations) Rules 2008" and it was widely appreciated and accepted by all concerned. Under this law, the Freight Forwarders need to apply for the licence and after fulfilling the necessary provisions they got licence from the National Board of Revenue (NBR). The principal features of such provisions are: they should deposit a specific amount of money as a security as per the category; they need to be enlisted with the Customs Authority and a Freight Forwards Association, recognized by the Government, should submit the TIN/VAT certificate, Trade License, Bank Solvency Certificate; and, most importantly, obtain permission of Bangladesh Bank under the Foreign Exchange Regulations Act. 1947.
Under these Rules, the Freight Forwarders would incorporate their licence number and date of expiry, on their Forwarders Bills of Lading popularly known as House B/L (A B/L issued by a freight forwarder or a consolidator acting as non vessel/box operator) and issue to the ultimate shippers, when the actual transporters of the cargo (Main Line Operator) issues its "Master B/L" to the later.
Here the forwarders would act primarily as cargo booking agents and negotiate services with the shipping lines, railway authorities, trucking agents and all relevant parties as per the requirements to ensure smooth delivery of the cargo from the Port of loading to the Port of delivery(POD) which is known as total package service or one-stop service.
Under The Section 13 (ja) of the Freight Forwarders (Licensing and Operations) Rules 2008 (SRO No. 18 Ain/2008/2174/Shulka), if any Freight Forwarder appoints any Carrier to carry any cargo from Bangladesh to abroad, it should ensure that they (Forwarders counterpart at destination) receive the endorsed transport documents from the Consignee's Bank to release the cargo to the Consignee or importer. Above all, the Forwarders will be liable for any mishaps from the loading up to release of the exported goods.
With this provision, the Freight Forwarders got supremacy over the shipping lines while the Forwarders are involved in carrying cargo through the sea, land and air. In these cases, their transport documents, House B/L etc., are the main negotiable instruments to release the goods to the ultimate receiver.
As the House B/L is playing the rate of main negotiable transport documents, it is logical that the HBL is endorsed by the consignee's bank and after having obtained this, the Carrier would release the goods from its possession. But it is observed that the Forwarders are reluctant to provide the endorsed HBL to the Carrier saying it is their in-house documents and they need to retain it with themselves. It creates a sort of confusion. In this regard, the Bangladesh Bank (BB) should give a clarification about which documents the Carrier (MLO) should collect from the Freight Forwarders to effect delivery of the cargo. Alternatively, it (BB) should give clear instruction to the Forwarders to strictly comply with the provision and provide the endorsed HBL to the carrier. Besides, the role of Master B/L should also be clarified in this regards.
However, in the Guidelines for Foreign Exchange Transaction of Bangladesh Bank under Chapter 22 of the Section 8 (i) reads that: "In respect of export of goods from Bangladesh to foreign countries by land route or by sea, the Railway Receipts, Bills of Lading and any other documents of title to cargo should be drawn only to the order of an AD (Authorized Dealers like Bank)".
Under this guidelines, the Carrier should issue the Master Bills of Lading (a B/L issued by the actual transporter of the cargo showing the shipper to be a freight forwarder or consolidator, (acting as non-vessel /box operator) when the Freight Forwarders issue its House B/L to the shipper consigned to a bank, designated by the exporter and none other else.
But questions arise, if the House B/L of the Freight Forwards got the status of prime negotiable instrument, what is the justification to submit a Carrier's Master B/Ls consigned to the Bank? When a forwarder issues its document as a document of title to cargo and to the order of an AD, the shipping line cannot issue its Bill of Lading to the order of such AD as quite obviously there cannot be two documents of title issued by two entities for the same export consignment to the order of the same consignee (i.e. AD). It actually hinders the speed of the negotiation process. As both the House B/L and Master B/L need to be endorsed, it takes a lot of time and sometimes it is observed that the cargo reached the ultimate destination but the endorsed Carrier B/Ls did not reach. Because of the present faster shipping services, day by day such instances are increasing. However, sometimes in practice the local banks do not differentiate between the M/BL and H/BL and only after receiving House B/L, they are negotiating it with the L/C opening bank which is not in line with the spirit of the above provision.
Therefore, it is now widely felt that the above provision of the "Guidelines for Foreign Exchange Transaction of Bangladesh Bank" should be updated in line with the "The Freight Forwarders (Licensing and Operations) Rules 2008" to provide an easy process of disposing the goods at the port of discharge. In this connection the Bangladesh Bank may recognize the Forwarders House B/L as a prime negotiable instrument when a forwarder is involved in reaching the cargo to the buyer and exempt the Shipping Lines to submit the Master B/L consigned to the Bank. Instead MB/L can be issued showing consignee as designated agents of the Freight Forwarders which is popularly known as "Straight B/L". It will save time and reduce hassle of the exporters also.
It is worth mentioning that the shipping lines are also exempted from submitting the B/L to the bank in the international shipping arena. It expedites trading and ensures the speedy release of cargo at the destination. Under this practice, the shipping lines only send the electronic advice (popularly known as Telex Release) to their counterpart at the port of discharge, to issue the Delivery Order to the party as per the written request of the Forwarder.
Every one should appreciate that the country's export business process is being modernized in course of time to make our market competitive in the international business. In this connection, formulation of the Freight Forwarders (Licensing and Operations) Rules 2008" is indeed a pragmatic step of the present government.
However, to eradicate some confusions, the NBR should give further advice, clarifying in which specific transport document the carrier should release the goods and in this regards define the role of Master B/L. Besides, the Bangladesh Bank should update its "Guidelines for Foreign Exchange Transaction", in line with the newly promulgated "Freight Forwarders Rules", exempting the provision of issuing Master B/L onto the order of Bank as the House B/L is shouldering the whole responsibility as a prime negotiating instrument.
The writer is the Executive Director of the shipping company Sea Borne Pvt. Ltd.
Guidelines for freight forwarding and bill of lading
FE Team | Published: November 21, 2008 00:00:00 | Updated: February 01, 2018 00:00:00
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