Consignee vs notify party: who goes where on a bill of lading, and what must match?

The two boxes in plain words

Consignee is the company the shipping line delivers the goods to. On a straight bill of lading or a sea waybill it is a named company, and only that company can collect the goods. On a "to order" bill the box reads "to order", "to order of shipper" or "to the order of" a bank. Then the goods go to whoever presents the original bill, signed over on the back by the party whose order it is. The bill works like a cheque: whoever controls the original controls the goods.

Notify party is the company the shipping line tells when the ship arrives, and that is all. Maersk's terms of carriage, for example, say a notify party is named only for the carrier's information, and that failing to notify it creates no liability. US law adds that naming a notify party does not limit a negotiable bill, and does not tell a buyer of the bill that the notify party has any right to the goods. The notify party is often the buyer, sometimes its customs broker or agent. An "also notify" box adds one more company to call.

Who goes where: the usual setups

Which company goes in which box depends on how the sale is paid and who clears the goods. These are the usual setups:

"To order" bills under a letter of credit

The credit tells you what to print. One real credit published by the ICC asks for bills of lading made out to the order of the issuing bank, notifying the applicant with its full name and address. Three rules of UCP 600 then matter:

• When the applicant's address and contact details appear in the consignee or notify box, they must be exactly as stated in the credit (article 14(j)). In other places, addresses only need to be in the same country as the ones in the credit.
• The shipper need not be the seller (article 14(k)), so a plant can ship "on behalf of" the trading company that sells the goods.
• The invoice is made out to the applicant, the buyer (article 18(a)(ii)), even though the bill is consigned to the bank's order.

Under a "to order" bill, the notify box is the only box on the bill that names the buyer. If it names the wrong company, the line calls the wrong company and the reefer waits at the port. "Same as consignee" does not work here either: it would point to the bank, and a bank does not clear goods.

The parties on the other documents

The other documents follow the rule that holds for everything under a letter of credit: they must not conflict with the bill of lading or with the credit. For certificates the ICC is precise. A consignee shown on a certificate must not conflict with the transport document, but when the credit asks for a "to order" bill, the certificate may name any company in the credit other than the beneficiary (ISBP 821, paragraphs Q9 and L5, explained in an ICC briefing of November 2023).

Import permits add a rule of their own. A Philippine SPS import clearance is issued for one shipment and cannot be transferred to anyone else, so the company that clears the goods must be the one the clearance was issued to; see SPS import clearance in the Philippines.

Worked example

Northwind Foods A/S sells frozen pork to Luzon Bay Foods Inc. in Manila under a letter of credit opened by Bank of the East. The credit asks for bills of lading made out to the order of Bank of the East, notify the applicant with full name and address. The forwarder's draft shows:

• Consignee: Luzon Bay Foods Inc. Wrong: the credit asks for "to the order of Bank of the East".
• Notify party: "same as consignee". Once the consignee is corrected, this would point to the bank. It must name Luzon Bay Foods Inc., with the address exactly as the credit spells it.

Two corrections on the draft, made before the original is issued, avoid a refusal at the bank. What a refusal costs is in letter of credit discrepancies; the other facts the documents share are in what must match between the bill of lading, invoice and packing list; and the words are explained in the glossary.