International Cargo Transport-Clause of Shipment

When negotiating a transaction,the buyer and the seller should reach an agreement on time of shipment,port of shipment and port of destination,shipping advice ,partial shipment and transshipment ,dispatch and demurrage,etc.and specify them in the contract of sale.Clear stipulation of shipment clause is an important condition for the smooth execution of the contract.

*Time of Shipment
Time of shipment is the deadline by which the seller makes shipment of the contracted goods.There are two ways of setting the time of shipment.One is specifying clearly a period of time. The other is setting a time period between the shipment and the deadline by which the relevan L/C must reach the seller.For example,shipment is to be made *** days after the seller recevie the L/C.When stipulating the time of shipment,both parties should consider the availability of the goods,ships and shipping space,the opening date of L/C and the nature of the cargo.Avoid ambiguous phrase as "Immediate shipment","Prompt Shipment","Shipment as soon as possible".Normally,the L/C should arrive at least 15 days before the time of shipment to permit the sufficient time to check the L/C and make necessary shipping arrangements.

*Port of Shipment and Port of destination
Port of shipment is the port where the goods are shipped and depart,while port of destination is the port at which the goods are ultimately discharged.Both of them should be specified int the contract.Normally, a specific port of shipment and a specific port of destination are stipulated,but sometimes two or more of each are stated to meet special requirements.In case a decision cann't be made,several alternatives should be listed,such as "One port out of London/Hamburger/Rotterdam as the port of destination at the buyer's location" or perhaps a general scope is stated such as "EMP(European Main Port","China Port", and so on.As "EMP" and "China Port" are too vague (ambiguous),we'd better try to avoid using them.In choosing port of shipment and port of destination, try to made them as clear as possible;provide some flexibility by allowing optional ports specially when it's hard to make a clear decision;take into account port regulations,facilities,charges and possible sanctions;and be alert to the possibility of different port having the same name.

*Shipping Advice

When the goods are shipped on board of the vessel,the seller needs to give the buyer prompt notice of the port of shipment,the date of sailing,the name of the carring vessel,the estimated time of arrival of the vessel and send the buyer the copies of the necessary documents to enable the buyer to get ready to take delivery of the goods.In the event of the seller failing to send the buyer shippment advice within the prescribed time period,the seller would bear the consequential costs incured.Under FOB terms, the seller should also sent notificatin of cargo readiness to the buyer 30 days or 45 days before the time of shipment so that the buyer can charter ships and send them to the port of shipment to take cargoes in time.On the orther hand,after receipt of the notification of cargo readiness for the seller,the buyer should inform the seller within the agreed time the name of the nominated vessel and the date of the vessel taking cargoes so as to enable the seller to arrange shipment.

*Partial Shipment and Transshipment
Partial shipment means shipping the commodity under on contract in more than on lot.It should be defined in the clause of shipment whether "Partial shipment is ( or is not) allowed".Meanwhile, the time and quantity of each shipment should be specified,such as "shipment during March~June in four equal mothly lots".The seller should strictly follow the regulations,or otherwise,the buyer has the rights to reject the goods.Transshipment means when there is no direct ship between the port of shipment and the port of destination,or no suitable ships available at that particular period,the goods have to be transferred form one ships to another at an intermediate port.The clause must also specify "whether transshipment is (or is not) allowed".In addition,it should be indicated who pays the cost of transshipment,

*Lay Time,Demurrage and dispatch
Lay time is the time allowed for the completion of loading and unloading, and is usually expressed by days or hours.
There are some ways of stipulating the lay time.
1.Days or Running Days:including bad weather days,sundays or any other holidays,unfavorable to the shipper
2.Weather working days of 24 hours:excluding sundays,holidays and rainy days,favorable to shipper but unfavorable for shipowner
3.Weather working days of 24 consecutive hours:excluding the bad weather time period,suitable for ports that operate day and night]
As lay time concernes the interests of shipowner,consignee or consignor,it is important to make it clear in the contract.Vague phrases as "to load/discharge in customary quick dispatch" should be avoided.If loading and unloading is not completed within the agreed lay time,demurrage should be paid at agreed rate by the part that charters ships to the shipowner to compensate for the cost sustained.On the other hand,if loading and unloading are completed in advance,the shipowner will pay dispatch money as a reward to the part who charters ships. Demurrage and dispatch are considered as a way of encouraging timely shipment,and are somtimes specified in the shipment clause.