What is the difference between FCR and a bill of lading?

FCR is a document recommended by the International Federation of Freight Forwarders Associations (FIATA) for use by its member international freight forwarders. From its literal meaning, this document is merely a receipt issued upon receiving goods rather than a transport document. However, according to the FCR sample issued by FIATA and the usage of FCR, freight forwarders invariably state prominently on the front of the FCR: "We place the goods under the control of the consignee or deliver them to the consignee based on irrevocable instructions." When the FCR only states "place the goods under the control of the consignee," the legal relationship between the freight forwarder and the consignee is that of a mandate contract. The freight forwarder, acting on the consignee's instructions, collects goods, performs consolidation, books shipping space, etc., for the consignee. In this case, the FCR only functions as a cargo receipt, is not a maritime transport document, and its distinction from a bill of lading is clear.

However, when the FCR records "deliver the goods to the consignee," meaning the freight forwarder promises to "transport" the goods to the destination according to the transport requirements stated on the FCR, the freight forwarder effectively assumes the legal status of a non-vessel operating common carrier (NVOCC). The FCR it issues shall be regarded as a transport document, serving as evidence of the transport contract, and is subject to the adjustment of the Maritime Law of the People's Republic of China, belonging to "documents other than bills of lading." Article 80 of the Maritime Law stipulates: A document other than a bill of lading issued by the carrier is prima facie evidence of the contract of carriage of goods by sea and the carrier's receipt of the goods listed in such document. It can be seen from this that the FCR issued by the freight forwarder shares similarities with the bill of lading, both being evidence of the contract of carriage of goods by sea and a receipt for the goods received by the carrier. However, at least the following differences exist between the two:
 
I. A bill of lading is a document by which the carrier guarantees to deliver the goods, whereas an FCR does not possess this characteristic. The Maritime Law clearly stipulates that a clause stating that the goods are to be delivered to a named consignee, as per the order of the shipper, or to the holder of the bill of lading constitutes the carrier's guarantee to deliver the goods accordingly. Therefore, for a straight bill of lading, the carrier shall deliver the goods to the named consignee; for an order bill of lading, the carrier shall deliver the goods according to the order of the shipper; for a bearer bill of lading, the carrier shall deliver the goods to the holder of the bill of lading. If the carrier delivers the goods without the original bill of lading, it shall be liable for losses suffered by the person entitled to take delivery of the goods under the bill of lading. The Maritime Law does not require or specify that documents other than bills of lading like FCR constitute the carrier's guarantee for delivering the goods. Therefore, it is not a violation of legal provisions for a carrier to deliver goods to the consignee without the original FCR. Generally, FCR clearly states at a prominent place on its front face that "goods will be dispatched directly to the consignor." So long as the shipper accepts this document, they are bound by it. Consequently, it is neither illegal nor a breach of contract for the carrier to deliver goods directly to the consignee without requiring an FCR. As such, the carrier is normally not liable for losses the shipper may incur.
 
II. FCR typically finds application under FOB price terms and EXW (Ex Works) price terms, while bills of lading have no such limitation. In the scope of maritime FCR transportation, the buyers of goods are usually well-known international supermarkets or procurement parties for large construction projects. Orders from these clients often involve large quantities and long lead times, frequently requiring numerous shipments. To lower costs and optimize lead times, such foreign procurements typically have FOB (Free On Board) or EXW (Ex Works) trade terms in their sales agreements because major Buyers can secure substantial volume discount freight rates far below the rates small regular cargo owners pay. Under these terms, the buyer, who will also act as the shipper of record on the ocean contract, effectively controls the cargo movement. The buyer in many cases nominates a freight forwarder (the respondent to whom the carrier issues cargo receipt FCR) to process sea transportation. Normally the buyer instructs the shipper to hand the goods over to a designated freight forwarder. On a consolidation basis, this buyer or forwarder can bulk-book container slots from carriers. The forwarder finds suppliers/FOB sellers giving necessary delivery. The FOB forwarder also manages loading at origin and container yard, subsequently arranges container release to the consignee locally upon overseas arrival facilitated through F nominated local counter-parties. The supply chain FCR reflects that the contract of ocean carriage is concluded with a shipper being a NVOCC agent or the buyer itself. Therefore,freight forwarders merely issue an F Cargo Receipt when a parcel(s) is made available at forwarder's pack/CY for such authorized movements, except where the FOB Sales Parties express requirement earlier being FIATA – Bill. Bill usage could relate The transporter whose nature fits BB use. Unless authorization, This scenario differs because selection suitable handling instructions the Transport issue e May follow earlier designated sales condition, not anything decides bill automatic production besides exporter requirement considered contractually at first if acceptable etc As goods out Place then any following logic mandate Original legal custody gave the parties of B/L still applies meeting who invo carry upon clause All Ocean form uses, Inlaw we deliver per agent to the document House inside line contrary only is. Will do without affecting selling / settlement part instruction aspect legal standard scenario per order for negotiable main Differences…

III. The conditions for banks to accept bills of lading and FCR differ. According to the Uniform Customs and Practice for Documentary Credits (UCP500) Article 30: Unless otherwise authorized in the credit, banks will only accept a transport document issued by a freight forwarder if it appears on its face to indicate: the name of the forwarder as carrier or multimodal transport operator and to be signed or otherwise authenticated by the forwarder as carrier or multimodal transport operator (OR) Indicates Tradeplace same We also being responsible include Its as potential which Article similarly good consigned for some main points standard C possibility issuance ocean Transport within process House where certain issued does have Original paper But except specific it has Usually this part subject with Others may type appropriate for definitions B.L exactly cannot Note represent it Does restrict anyway Bill normal coverage should transfer still original etc some few important …

 
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