Pre-carriage in ISBP for Bills of Lading: Need for a Rethink?
Objective and Scope
This article analyses how the inclusion of the pre-carriage field in ISBP has influenced the interpretation of onboard notation requirements under UCP rules.
It traces the issue back to UCP 500 wording, explains how the resulting confusion arose, identifies the correct interpretation, and discusses how ISBP guidance has inadvertently expanded the scope of document examination beyond its original intent.
The article also clarifies that pre-carriage is relevant only for multimodal transport documents and not for standard ocean Bills of Lading.
1. Core Principle
The fundamental principle of any Bill of Lading under the UCP is simple: clear evidence must exist that the goods were loaded on board a named vessel at the port of loading specified in the credit.
Documentary evidence under a Letter of Credit must reflect the actual operational reality, ensuring that the issuing bank can honor its commitment.
ISBP provisions relating to onboard notation exist solely to ensure that such loading is properly evidenced — showing the specified port, vessel, and date.
2. Background: UCP 500 Wording and the Source of Confusion
Article 23(a)(ii) of UCP 500 (1993 Revision) stated:
“If the bill of lading indicates a place of receipt different from the port of loading, the onboard notation must also state the port of loading stipulated in the credit, the name of the vessel, and the date on which the goods have been loaded on board.”
The phrase “if the bill of lading indicates a place of receipt different from the port of loading” led some banks to interpret that an onboard notation was required only when the place of receipt and port of loading were different, creating inconsistent practices in document examination.
3. The Relevance of Place of Receipt in a BL
In containerised transport, Bills of Lading indicate both a place of receipt and a port of loading, when containers are received at a Container Yard (CY) or goods at a Container Freight Station (CFS) located outside the port area.
The indication of a place of receipt on a Bill of Lading reflects that the carrier has taken charge of the goods prior to loading onto the named vessel. For documentary credit purposes, this can be treated as triggering a pre-carriage event, even if the pre-carriage field is not explicitly completed.
Accordingly, whenever a place of receipt is shown, a dated onboard notation should ideally evidence the actual vessel and port of loading, to reflect the operational reality.
4. Divergent Interpretations
Some confirming banks accepted Bills of Lading showing the same place of receipt and port of loading
(e.g., Place of receipt: Mumbai; Port of loading: Mumbai)
without a separate dated onboard notation, taking UCP 500 wording literally.
Issuing banks, however, rejected such documents, asserting that a dated onboard notation specifying vessel name and port of loading remained necessary.
They maintained that “place of receipt” and “port of loading” represent distinct stages in the transport process, even when both refer to the same location.
5. How the Structural Issue in UCP 500 Could Have Been Resolved
The issue lay not in the rule itself but in the way the sentence was constructed.
The conditional clause “if the place of receipt is different from the port of loading” unnecessarily restricted the intent of the requirement.
A clearer formulation in UCP 500 could have been:
“If the bill of lading indicates a place of receipt, the onboard notation must also state the port of loading stipulated in the credit, the name of the vessel, and the date on which the goods were loaded on board.”
This would remove ambiguity and apply uniformly, regardless of whether the place of receipt differs from the port of loading.
6. Introduction of Pre-carriage into ISBP
Under UCP 600, the interpretative provision of Article 23(a)(ii) of UCP 500 was removed, and the onboard requirement was incorporated into ISBP 745 and later 821.
ISBP shifted the focus from the place of receipt to the pre-carriage concept to determine when additional onboard notation — vessel name, port of loading, and date — is required. Accordingly, it is the indication of pre-carriage, not the place of receipt, that triggers this additional onboard requirement.
The place of receipt, whether identical or different from the port of loading, no longer determines the need for onboard notation.
However, if the place of receipt alone is shown without pre-carriage, examiners are effectively expected to read the pre-printed terms of the BL to determine whether a dated onboard notation with vessel name and port of loading is required (ISBP 745/821 para E6-d), extending the scope of document examination beyond traditional expectations.
A technically simpler and correct approach would be to require a dated onboard notation whenever a place of receipt is indicated, to maintain documentary evidence in line with operational reality.
Pre-carriage is relevant primarily for multimodal transport documents, where goods are taken in charge by the carrier from locations outside the port area.
7. Conclusion
The inclusion of pre-carriage references in ISBP 745 and 821 to justify onboard notation was an unnecessary response to imperfect drafting in UCP 500.
When a place of receipt appears on a BL — such as goods received at a Container Yard (CY) or Container Freight Station (CFS) — it inherently signifies a pre-carriage event, even without a separate pre-carriage indication.
In such cases, the dated onboard notation should ideally evidence the vessel name and port of loading, without the need to analyze the pre-printed terms of the BL.
The introduction of pre-carriage, relevant primarily for multimodal transport, has complicated document examination and extended it unnecessarily.
Future ISBP revisions could clarify onboard notation requirements and refocus attention on the evidentiary intent of UCP.
Disclaimer
This article reflects the author’s analytical view, intended to simplify and clarify existing banking practices.
It is not intended to contradict official ICC interpretations. References to UCP and ISBP are provided solely for analytical and educational purposes.