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  • QA 058
    Question:
    Why are some shipping lines abandoning 'Less than Container Load or LCL' in favour of 'Full Container Load or FCL'?
    Background:
    We recently read that as of October 2005 shipping companies will regard all coffee and cocoa in containers from West Africa as 'Full Container Loads or FCL'. The alternative option of shipping as 'Less than Container Load or LCL' will no longer be available. Why this change and is this symptomatic of similar changes to come elsewhere?
    Asked by:
    Exporter - Brazil
     
    Answer:

    Yes, we believe the change you refer to is symptomatic of more to come. The reason is that, just as some roasters argue that roasting and distribution is their core business, not the transporting, storing and financing of green coffee stocks, so shipping companies consider that their core business is to carry sealed containers safely and efficiently from A to B, and (within reason of course) not to be concerned with the contents.

    Shipping lines do not really wish to carry GP/bulk[1]shipments on LCL basis and it is the intention to eventually eliminate the LCL[2]bill of lading entirely, also for coffee in bags…  For example, it is our understanding that most coffee from Brazil to Europe is already carried entirely on FCL basis. FCL also implies that the shipping line is not responsible for any consequences arising from the faulty fitting or malfunctioning of the inner lining of a bulk container [3]  

    For exporters the contractual situation is clear. If on arrival of an FCL shipment any damage is found then, irrespective of who stuffed the container, the exporter will be held responsible. Unless of course it can be proved conclusively that the damage was due to an external event that occurred whilst the goods were under the control of the shipping company, in which case the exporter is not liable. For more on FCL versus LCL please see 05.01.08.   

    On a different but related note, not everyone is always prepared to accept or finance an FCL bill of lading that simply states a container 'is said to contain x amount of green coffee'. Some exporters may therefore have to resort to having independent weighers and supervisors certify weight and contents. It should be understood however that the provision of a weight or quality certificate does not absolve a seller from his contractual obligations: the buyer remains entitled to lodge a claim if on discharge weight or quality is not correct …    Increased use of FCL bills of lading may well lead to more frequent pre-shipment inspections - readers may find it useful therefore to also read section 10.10 which deals with supervision or collateral management. 

    Posted 14 November 2005


     

    [1] General Purpose container fitted with liner containing coffee beans in bulk.
    [2] The term LCL is something of a misnomer since containers are nearly always full and freight is charged by  container, not by weight. The term is used so often because it permits marine insurers and/or receivers to lodge  claims directly on shipping lines…
    [3] Shipper's mounting and rigging, stow, load and count…  This is important in terms of HSE (Human health, Safety  and Environment) matters. To note that the wording of contract of carriage (Bill of lading) clauses will vary  between individual lines.

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