Understanding the Roles: Shipper, Consignee, Carrier, and Notify Party
Diving into the shipping world can feel like learning a whole new language, especially if you’re new to imports and exports. It’s like a jigsaw puzzle with a bunch of terms, concepts, and players you might not be familiar with.
Heard of terms like “shipper,” “consignee,” and “notify party”? They might sound similar, but they’re not! These are unique roles in the shipping process, each with its own set of duties. Sure, they might cross paths now and then, but knowing who does what is key to a hitch-free shipping experience.
Understanding these different roles and their responsibilities can make your shipping journey a lot smoother. So, let’s dive in! In this article, we’ll clear up the roles of shippers, consignees, and notify parties, break down what they do, and how they fit into the big picture of international shipping.
Who is the Shipper?
Imagine two people examining a container before it’s shipped. That’s what a shipper, often known as the exporter, does. Typically, the shipper is the source of the goods, which is why they’re sometimes called the seller. They’re the person, company, or organization that’s selling goods to a buyer (or consignee) in another country.
But here’s a twist: the seller isn’t always the shipper. Sometimes, the goods come from somewhere else and are handed over to the seller just for shipping or delivery.
And here’s another curveball: the buyer can also play the role of the shipper. This happens when the trade agreement (known as Incoterms) states that the buyer is in charge of arranging the transportation. For instance, under the EXW (Ex Works) Incoterm, the buyer collects the goods from the seller’s location and organizes both the local and international shipping.
Regardless of who ends up being the shipper in your situation, they’re responsible for kicking off the shipping process. The shipper checks, packs, and prepares the goods for delivery. Depending on the Incoterm and the contract of carriage, the shipper might also handle other tasks, such as:
- Securing the necessary export and import licenses
- Meeting the requirements for customs clearance at the departure or arrival port
- Organizing transportation for delivering the goods
In essence, the shipper wears two hats, depending on their roles in the sales contract and the contract of carriage.
Who is the Consignor?
The consignor is the one waving goodbye to the goods on their shipping journey. They could be the owner of the goods, or a third-party shipper who’s been hired by the owner to manage the shipping process. Either way, the consignor is the one ensuring the goods are properly packed and labeled for their trip and that all the necessary shipping documents are filled out correctly.
The consignor also has the job of giving any special instructions to the carrier about handling the shipment. Let’s say the goods are extra fragile or valuable, the consignor might ask the carrier to handle them with kid gloves. If the consignor doesn’t give the carrier a heads up about any special handling needs, they could be on the hook for any damage to the shipment.
Who is the Consignee?
Picture two people eagerly opening a container. They represent the consignee in the shipping process. While the terms “consignee” and “shipper” might often be used interchangeably, they have distinct roles. Unlike the shipper who sends the goods, the consignee is the receiver of the goods. Usually, they’re the owner or buyer who’s bought the goods from the seller. Essentially, the consignee is the person the shipper delivers the goods to.
Consignees can be individuals or companies. Most of the time, they’re the actual buyers or owners of the goods. However, the consignee named in the shipping documents could also be the owner’s agent, an employee, or even a bank. Whoever is named the consignee will be listed in the Bill of Lading, a crucial document for customs clearance in international transactions.
While the consignee is often the buyer of the goods, this isn’t always the case. The term “consignee” is used in the contract of carriage, while the term “buyer” is used in the sales contract.
Depending on the customs rules of the destination country and the type of shipment agreed upon, the consignee might legally need to be physically present to collect the shipment at the destination port or the container freight station.
Who is the Notify Party?
Imagine two people waiting for a shipment’s arrival at the destination port or airport. They represent the notify party in the shipping process. Listed in the shipping documents, the notify party is the person to contact when the shipment arrives at its destination. This could be anyone, from the buyer, the consignee, a shipping agent, an interested party, or other individuals named in the documents. If the notify party isn’t different from the consignee, then the consignee is the one who gets notified of the shipment’s arrival.
Interestingly, there can be more than one notify party. However, there’s usually only one primary party who then notifies all other interested parties when the cargo or vessel has arrived.
In most cases, the notify party is also the person who handles the paperwork and requirements for customs clearance at the destination. They take care of the formalities involved in the arrival of the vessel and the delivery of the goods.
Even though a notify party is named in the documents and is supposed to be updated when the shipment arrives, carriers or shippers don’t always fulfill this duty. Sometimes, the notify party doesn’t receive any updates on the goods or the vessel carrying them.
Typically, the shipper or carrier is responsible for providing the arrival details to the notify party. However, certain bill of lading documents contain clauses that relieve the shipper or carrier of responsibility or liability if they fail to notify. Therefore, consignees or buyers should stay alert and request arrival details to ensure smooth collection of the goods from the destination port.
Although the roles of the three parties—shipper, consignee, and notify party—involved in the shipping process can overlap and even be the same individual or entity in some instances, there are still key differences between them. These roles can vary depending on the terms of the sales contract, the contract of carriage, and the Incoterms used in the shipment.
A trustworthy freight forwarder can help you navigate your shipping process, organize the transport of your goods, and liaise with the parties involved in the shipment. Freight forwarding services can simplify the shipping process, making it less complex and stressful for shippers, sellers, and buyers.