On this page, I will try to explain you “Rail Transport Document” and its applications in letters of credit transactions.
Banks mention “Rail Transport Document” as “Rail Transport Document “, “Rail Consignment Note”, or “CIM Consignment Note” in letters of credit.
Rail transport document or rail consignment note is a transport document used in rail shipments.
Rail consignment note confirms that the rail carrier has received the goods and that a contract of carriage exists between trader and carrier.
Key details to be provided in the note include: a description of the goods; the number of packages and their weight; the names and addresses of the sender and recipient. (1)
Important Note 1 : Rail transport document is not a document title of goods, which means that rail transport document is a non-negotiable transport document.
As a result, rail carriers will be able to deliver goods to the consignee without obtaining one original copy of rail transport document.
For this reason, exporters and banks (issuing bank and confirming bank) have to be very careful when working with a letter of credit demanding a rail transport document as a transport document, because neither exporters nor banks could secure goods as a collateral.
Important Note 2 : The Intergovernmental Organisation for International Carriage by Rail (OTIF) was set up on 1 May 1985. 48 States are Members of OTIF at the present time (Europe, Asia and North Africa) and one State is an Associate Member (Jordan).
The Intergovernmental Organisation for International Carriage by Rail (OTIF) has developed the uniform systems of law which apply to freight in international through traffic by rail.
These systems of law are known as the Convention concerning International Carriage by Rail (COTIF) of 9 May 1980 (1999 Protocol) .
Appendix B to the Convention concerning International Carriage by Rail (COTIF) of 9 June 1999 is Uniform Rules Concerning the Contract of International Carriage of Goods by Rail (CIM).
Transport document prepared according to the CIM Convention is called CIM Rail Consignment Note.
How to Use Rail Transport Document in Letters of Credit Transactions:
Rail Transport Document / Rail Consignment Note is covered under article 24 of UCP 600.
A rail transport document, however named, must appear to:
- indicate the name of the carrier and:
– be signed by the carrier or a named agent for or on behalf of the carrier, or
– indicate receipt of the goods by signature, stamp or notation by the carrier or a named agent for or on behalf of the carrier.
- indicate the date of shipment or the date the goods have been received for shipment, dispatch or carriage at the place stated in the credit. Unless the transport document contains a dated reception stamp, an indication of the date of receipt or a date of shipment, the date of issuance of the transport document will be deemed to be the date of shipment.
- indicate the place of shipment and the place of destination stated in the credit.
A rail transport document marked “duplicate” will be accepted as an original.
- A rail transport document will be accepted as an original whether marked as an original or not.
In the absence of an indication on the transport document as to the number of originals issued, the number presented will be deemed to constitute a full set.
For the purpose of this article, transhipment means unloading from one means of conveyance and reloading to another means of conveyance, within the same mode of transport, during the carriage from the place of shipment, dispatch or carriage to the place of destination stated in the credit. (2)
Special Hints Regarding the Rail Transport Document From ISBP (International Standard Banking Practice):
If a credit requires presentation of a transport document covering movement by road, rail or inland waterway, UCP 600 article 24 is applicable.
- How to move goods by rail, Key rail transport documents by Invest Northern Ireland, is the official online channel for business advice and guidance in Northern Ireland.
- UCP 600