What is a consignee?
When transporting freight (by ocean, air, or land), there are two parties involved — one who is shipping and the other who is receiving the freight. The recipient of the goods being transported is referred to as the consignee.
The term is used in commercial invoices and contract of carriage documents to denote the party receiving the freight. By extension, this also suggests that the ownership of the goods is transferred to the consignee after customs clearance. Based on the specified Incoterms, they’re liable for paying the import duties and taxes levied on the freight.
So, for example, if Apple is sending a container full of chocolates to Google; Apple is the sender or consignor, and Google is the receiver or consignee.
The consignee is responsible for the following:
- Setting clear expectations for the consignor
- Covering any freight charges in the shipping process (depends on set terms)
- Paying the taxes & duties before receiving the shipment (based on Incoterms)
- Collect goods from the carrier
- Inspecting the delivery for any damages or missing items
- Taking ownership of the transported goods after receiving
Consignee v/s Notify Party
A consignee may not be the end receiver or consumer of the goods, but the party responsible for accepting the delivery of the goods. These can include:
- An individual receiving the goods
- A distribution center stocking the products
- An agent who takes ownership of importing the freight
Likewise, the origin of the consignee can be a warehouse, port, or the agent’s address — depending on the given destination of the shipment.
So, by extension, the consignee can only be the importer of the goods on records.
The entity may sell or forward the goods to the end customer or client, often referred to as the “notify party”. After receiving the goods, the consignee must inform or notify the end party when the goods were received at the final port of destination.
Consignee and notify party can be the same or different. If the consignee and notify party are different, instead of “Sold to” on the bill of lading, the consignee is referred to as “Ship to”. The details of the notify party need to be mentioned under “Sold to”.
Consignee & Bill of Lading
The bill of lading (BoL) acts as a contract of carriage between the consignor and the consignee. It is addressed by the shipper/consignor to the consignee.
It’s important to note that, in any scenario, the right to receive the goods from the carrier stays only with the consignee mentioned on the bill of lading, and not the notify party or the end customer. The consignee needs to be physically present to collect or receive the freight.
Lastly, if you ship to a 3PL service (like Amazon), it won’t be addressed as the consignee. The actual receiver of the goods needs to be mentioned as the consignee.
The associated documents must have the exact same details of the consignee like name, address, valid TIN/VAT number, etc. The consignee must provide accurate and updated information to the consignor for proper documentation to avoid any miscommunication when receiving goods.
Terms related to Consignee
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