FCR (FORWARDER CARGO RECEIPT)
A negotiable document issued by a forwarder which will satisfy legal requirements for a letter-of-credit. Since a forwarder is not an NVOCC it cannot issue actual Bills of Lading. The FCR is a legally binding substitute for the B/L which was pioneered by Sea-Land and is now an industry standard.
Used to provide validation that a vendor has delivered the specified cargo and all related documents to the designated receiver.
When forwader company, acting as agents for the consignee, have received the
goods and all necessary documentation and payment of charges from the seller,
we issue a Forwarder’s Cargo Receipt (FCR). The seller will use the FCR to
confirm to the buyer and/or the bank that he has delivered the goods for shipment
and that the carriage is being arranged by Maersk Logistics.
forwader company will arrange the ocean transport and the ocean carrier will issue a
B/L (or SWB). The B/L (or SWB) is used to obtain release of the goods at
destination.
It is also possible to combine the use of the FCR with a House B/L or House SWB
if the customer is using a NVOCC to supply ocean carriage. If forwader company is
the NVOCC and has issued a HBL or HSWB, there is no need to also issue a FCR
unless there are specific reasons to do so (for example that the vendor’s L/C
requires a logistic company FCR).
In many ways the FCR document looks similar to the Bill of Lading and House Bill
of Lading. But it is distinctly different than a B/L, SWB, HBL or HSWB in that it does
NOT evidence a contract of carriage.
A FCR cannot replace the B/L, SWB, HBL or HSWB. It is always used together
with one of these documents.
FCR – Issuing Party
A Forwarder’s Cargo Receipt (FCR) is issued by a freight forwarder who is acting
as agent on behalf of the consignee.
FCR – Functions
The FCR functions as:
1. Receipt for the cargo
Following functions are NOT applicable to the FCR:
2. Evidence of contract of carriage
3. Document of title
1. Receipt for cargo
The FCR is a receipt by the agent / forwarder that the goods are in his custody.
The FCR does not confirm shipment and can therefore be issued before the carrier
B/L has been issued.
2. The FCR is NOT evidence of contract of carriage
The FCR does not evidence of a contract of carriage with the ocean carrier, freight
forwarder or NVOCC. The evidence of contract of carriage will be the document
issued by the ocean carrier (ie. the B/L or SWB) or the NVOCC (HBL or HSWB).
3. The FCR is NOT a document of title and it not used at destination
The FCR is NOT a document of title. It cannot be negotiated, and it cannot be
endorsed to other parties. The consignee cannot be “to order” and the consignee’s
name must be entered in full.
There is no requirement that a FCR is presented at destination to obtain release of
the goods. The release of the goods take place based on the B/L (or SWB). In fact,
the FCR is seldom used at destination. It is primarily a document for origin use.
Although the client’s SOP specifies that a FCR is to be issued together with a Sea
Waybill, there may be a few situations where a vendor insists to receive a
document of title / a negotiable document, a House Bill of Lading (DSL Star
Express B/L) can be issued instead of the FCR but it requires:
a. Confirmation from consignee (MLOG acts as agents for the consignee. We
should therefore seek confirmation from the consignee before we issue a
different document than the FCR. Preferably, we ask the consignee to ensure
that the shipper (and his bank and L/C) will accept the FCR instead of a HBL.
But, sometimes it can be difficult to change a L/C after is has been issued. The
consignee may therefore ask that a HBL is issued for this shipment. The
consignee should ensure that future L/Cs require a FCR instead of a document
of title)
b. If a HBL is issued, the carrier SWB or B/L must not be consigned to the same
person as the HBL. If Maersk Logistics issue a HBL, the carrier bill must be
consigned to logistic company , not the customer.
c. Clear notification and follow-up with logistic's company at destination (If a HBL is
issued instead of a FCR, MLOG at destination must receive a duly endorsed
original HBL at destination before the goods are released to the consignee.
MLOG at origin must ensure that MLOG at destination is made aware of this
requirement. For customers that usually operate under FCRs, it is an unusual
situation to have a HBL involved in the shipment. MLOG at destination will
therefore not be aware of the release requirements under the HBL unless they
receive clear notification from logistic company at origin).
FCR – Originals and Copies
The FCR is not a document of title and an original is not needed to effect release of
goods at destination. As such, there is no reason why the FCR should be issued as
an original document.
However, often the shipper (and the bank) will insist to receive an original FCR and
therefore the FCR is often issued in 3 originals and a reasonable number of copies.
It is actually more correct to issue 1 original FCR and a reasonable number of
copies (but 3 originals is market practice in some areas of the world today).
FCR – Forwarder’s Responsibility
The two main areas of responsibility of an agent / freight forwarder issuing FCRs
are:
1. Responsibility for correct description of the goods
2. Responsibility to care for the goods while in the agent’s custody
1. Responsibility for correct description of the goods
The consignee and the bank will rely on the description of the goods in the FCR
(quantity, condition, etc) to effect payment to the seller.
It is essential that logistic company clearly notes any damages or shortcomings on
the FCR or refuse to accept the cargo if the physical goods received do not match
the description.
logistic's company , acting as agents for the consignee, will arrange a carrier Bill of
Lading or Sea Waybill that covers the carriage performed by the ocean carrier.
logistic's company should ensure that the description in the carrier B/L (or SWB)
corresponds with the description in the FCR.
The consignee will expect to receive the goods as described in the B/L or SWB.
If a shipper requests a “clean FCR” in order to meet the requirements in his Letter
of Credit but the carrier will not issue a clean B/L (without any notation of
shortcomings or damages), Maersk Logistics cannot meet his request.
2. Responsibility to care for the goods while in the agent’s custody
This is closely related to what we have just discussed. Maersk Logistics is
responsible to take good care of the goods while they are in our custody. If we
damage the goods, we become liable towards the consignee.
However note that when goods are delivered to the carrier and covered by a
transport document (B/L or SWB), it becomes the carrier’s responsibility to care for
the goods.
Maersk Logistics is only responsible for the goods under the FCR as long as the
goods are in our custody. (This is distinctly different from a HBL/HSWB where we
take on responsibility as carrier).
FCR – Amendment
Should the shipper request an amendment to the FCR, the issuing agent should
ask to have the original FCRs returned.
Amendments should be made in writing and are subject to acceptance by the
forwarder. The forwarder must ensure that no changes to the description of the
goods are made that can affect his position towards the consignee.
FCR – Cargo Description
The procedures for FCRs follow the same rules as Bills of Lading and Waybills.
Cargo description
The transport provider cannot physically verify the contents of the cartons and
packages received from the shipper. For legal reasons, the description of the
goods must therefore always include the wording “Said To Contain” or “S.T.C.” to
signify that the transport provider is relying on the description of the goods supplied
by the shipper. Example: S.T.C. 1020 cartons of CD players.
If the forwarder knows that the description of the goods supplied by the shipper is
not correct (for example that cartons are damaged), the forwarder should note the
discrepancy on the FCR or refuse to accept the cargo and issue the FCR.
No. of packages
If cargo is lost while in the forwarder’s custody, it is the number of units as stated in
the “no. of pkgs” field that will be used for calculation of potential compensation to
the owner. For this reason, this field should always reflect the smallest number of
shipping units. Example: “5 pallets” instead of “50 cartons”.
Clauses
The transport provider should insert the clause “Shipper’s load, stow and count” if
the customer is loading the container at his premises.
FCR – Document Date
The receiving date on the FCR date must be the date on which the goods were
received by Maersk Logistics (or the CY-container was delivered to the carrier’s
terminal).
In some cases, the shipper may ask that the FCR is dated earlier or later than the
actual date in order to comply with conditions in his Letter of Credit. We should not
issue the FCR with an incorrect date - it would be seen as an attempt to defraud
the consignee.
FCR – Payment
The issuing agent / freight forwarder of a FCR, will usually not release the FCR to
the shipper until he has not only delivered the goods but also delivered all required
documents (export licence, commercial invoice, etc.) and paid all local charges that
are for the account of the shipper.
You should note that the FCR is not an invoice. It is a cargo receipt. Even though
the FCR is used in connection with the payment of charges at origin, it cannot
replace the issuance of an invoice. But origins may use the same number for the
FCR and the invoice.
FCR – Filing
There are no international requirements for filing of original FCRs. Please check
local procedures. There is no need to collect an original FCR at destination.
FCR – Why use this document?
The FCR document is used to facilitate payment.
When the shipper has delivered his goods to the agent / freight forwarder (and any
required documentation), he will receive the FCR as proof that the goods have
been delivered for shipment.
The L/C will stipulate which documentation must be in place before payment for the
goods will be effected. If the buyer and seller have agreed that the FCR is to act as
proof that the goods have been made available for shipment, the L/C must clearly
state that payment can be effected upon presentation of a Maersk Logistics FCR.
The advantage to the shipper of using the FCR to effect payment (instead of a B/L,
SWB or HBL) is that the FCR can be issued before the goods have been shipped
by the ocean carrier. Therefore, the seller can obtain payment for his goods faster
than if he had had to wait for the B/L to be issued.
To the consignee, there is an advantage when logistic company consolidates
goods from multiple shippers into one container. In such case, a separate FCR will
be issued to each of the shippers but only one carrier B/L (or SWB) will be issued
by the carrier. This will save the consignee documentation and customs clearance
fees at destination.
As you know, when a FCR is issued by Maersk Logistics, the carrier will issue a
B/L or a SWB. When a carrier B/L or SWB is issued, the shipper/seller under
normal circumstances has the right to amend the release instructions (e.g.
consignee name and destination).
By accepting a FCR, the shipper assigns the benefit of these forwarding
instructions to the consignee (buyer). In other words, the seller waives his right to
revoke any delivery instructions after he has delivered the goods to logistic's company , and logistic's company is not legally obliged to comply with the shipper’s
instructions after receipt of the cargo and issuance of the FCR.
logistic's company will comply with the buyer’s instructions.
You should note that although the FCR is used as a vehicle for payment, logistic's company is not involved in the monetary transaction and change of ownership
between the seller and the buyer. We issue the FCR as a receipt for the cargo.
FCR – Differences between FCR and carrier B/L
The B/L is issued by the ocean carrier. The FCR is issued by a freight
forwarder, acting as agent on behalf of a consignee.
The B/L is a document of title and can be endorsed. The FCR is not. The FCR
cannot be consigned “to order”.
The B/L is evidence of contract of carriage with the carrier. The FCR is not.
A duly endorsed B/L must be presented to the carrier at destination to obtain
release of the goods. The FCR does not have this function.
Under a FCR, logistic's company is only responsible for the goods while they are
in our custody. If goods are lost or damaged during transit, the client must file
claim against the ocean carrier under the B/L (or SWB).
FCR – Differences between FCR and carrier SWB
The SWB is issued by the ocean carrier. The FCR is issued by a freight
forwarder, acting as agent on behalf of a consignee.
The SWB is evidence of contract of carriage with the carrier. The FCR is not.
The carrier will release the goods at destination to a person who can identify
himself as a representative of the consignee stated in the SWB. The FCR does
not have this function. The FCR is only used at origin and is not a release
document.
Under a FCR, Maersk Logistics is only responsible for the goods while they are
in our custody. If goods are lost or damaged during transit, the client must file
claim against the ocean carrier under the B/L (or SWB).
FCR – Differences between FCR and HBL
The HBL is issued by Maersk Logistics when we act as NVOCC.
As NVOCC we act as agents of DSL Star Express and take on the
responsibilities and liabilities as a principal carrier. Even when sub-contracting
the ocean carriage to an ocean carrier such as Maersk Sealand, we have the
responsibility and liability of a carrier under the HBL.
When we issue FCRs, we act as agents for the consignee but do not take on
the responsibility and liability for the carriage of the goods. Maersk Logistics is
only responsible and liable for the goods while they are in our custody.
The HBL is a document of title and can be endorsed. The FCR is not.
The HBL evidences a contract of carriage between the NVOCC and the
customer. The FCR does not evidence a contract of carriage.
A duly endorsed HBL must be presented to the NVOCC (Maersk Logistics) at
destination to obtain release of the goods. The FCR does not have this
function. The FCR is not a release document.
When cargo is moving under a HBL, the shipper or the consignee will agree
freight rates with the NVOCC (Maersk Logistics). When a FCR is issued, the
customer will have agreed freight rates directly with the ocean carrier and the
goods will move under a B/L or SWB.
Under a FCR, Maersk Logistics is only responsible for the goods while they are
in our custody. If goods are lost or damaged during transit, the client must file
claim against the ocean carrier under the B/L (or SWB).
FCR – Differences between FCR and HSWB
The HSWB is issued by Maersk Logistics acting as NVOCC (agent for DSL Star
Express).
Neither the HSWB nor the FCR are documents of title. None of them can be
endorsed or consigned “to order”.
Version 1.1. June 2004 Page 48 © A.P.Møller – Mærsk A/S
TMW Basic Transport Documentation
The HSWB is evidence of contract of carriage with the NVOCC. The FCR is
not.
The NVOCC will release the goods at destination to a person who can identify
himself as a representative of the consignee stated in the HSWB. The FCR
does not have this function. The FCR is only used at origin and is not a release
document.
Under a FCR, Maersk Logistics is only responsible for the goods while they are
in our custody. If goods are lost or damaged during transit, the client must file
claim against the ocean carrier under the B/L (or SWB).
