Documentary credits often include a “latest date of shipment”. Latest date of shipment is one of the most important definitions in commercial documentary credits.
As a beneficiary, if you are obligated to make a shipment under a commercial letter of credit, and need to present a transport document; such as a port-to-port marine bill of lading, then you must complete the shipment before the latest date of shipment stated in the credit.
Which means that, the date of shipment indicated on the bill of lading must not show a date, that is after the latest date of shipment marked in the credit.
If you fail to complete your shipment before the allowed time frame, then you will get a late shipment discrepancy from the issuing bank.
After the issuing bank determines that your presentation is not complying, you can reach to the payment only after applicant accepts the discrepancies
Sample Late Shipment Discrepancy under a Letter Of Credit:
A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:
Letter of Credit Conditions
Field 44C: Latest Date of Shipment: 141031
Field 44E: Port of Loading/Airport of Departure: Port of Ningbo, China
Field 44F: Port of Discharge/Airport of Destination: Port of Auckland, New Zealand
Field 46A: Documents Required: Full set of original bill of lading clean on board established to the order of Societe Generale Algerie Spa notify applicant marked freight prepaid.
The beneficiary presented a bill of lading with the following data:
Bill of Lading
Port of Loading: Port of Ningbo, China
Port of Discharge: Port of Auckland, New Zealand
Bill of Lading: The bill of lading is dated 01.November.2014. In addition, it contains an on-board notation as follows: “Shipped on board : 01.November.2014”.
Discrepancy: Marine bill of lading shows a late shipment. Both bill of lading date and on board notation date indicate a late shipment. Date of shipment falls outside the allowed shipment period.
Reason for Discrepancy: If the letter of credit requires a presentation one of the transport documents as indicated in UCP 600, the date of shipment stated on the transport document must not be showing a later date than the latest date of shipment stated in the letter of credit.
Bill of lading shows a late shipment as date of shipment is a later date than the latest date of shipment indicated in the letter of credit.