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Understanding Article 20 of UCP 600: Bill of Lading

The Bill of Lading (B/L) is one of the oldest and most important transport documents in international trade. It serves three purposes at once:

  1. A receipt for goods shipped.
  2. Evidence of a contract of carriage by sea.
  3. A document of title, allowing transfer of ownership by endorsement.

Article 20 of UCP 600 sets the rules for when a Bill of Lading is acceptable under a Letter of Credit (LC).

What Does Article 20 of UCP 600 Say?

Article 20 lays down several key requirements for a valid Bill of Lading:

1. Evidence of Shipment

  • Must indicate that goods were shipped on board a named vessel at the port of loading stated in the credit.
  • “Shipped on board” notation, with date, is mandatory unless the document itself is an on-board B/L.

2. Issuance & Signature

  • Must be issued and signed by:
    • The carrier, or
    • The master (captain), or
    • An agent acting for the carrier/master.
  • Signature must clearly indicate the capacity of the signatory.

3. Originals Required

  • Full set of originals must be presented if the LC requires it.
  • At least one original must always be submitted.

4. Ports of Loading & Discharge

  • Must indicate ports of loading and discharge exactly as required by the LC.
  • Loading at multiple ports is acceptable only if permitted by the LC.

5. Transshipment

  • Permitted, even if prohibited in the LC, when the B/L covers a shipment in containers, trailers, or LCL (less than container load).

6. Consignee

  • Must be made out to order, to a named party, or to bearer, depending on LC instructions.

7. Date of Shipment

  • The date of issuance (or the on-board notation date) is treated as the shipment date.

Breaking Down Article 20

Why Bills of Lading Are Crucial

  • Provide exporters proof of shipment.
  • Give importers a document of title, allowing them to claim goods at destination.
  • Give banks security over the goods being financed.

On-Board Requirement

  • “Received for shipment” B/Ls are not acceptable unless they carry an added “shipped on board” notation with date.
  • Ensures goods are actually on the vessel, not just at port.

Transshipment Flexibility

  • Modern shipping often requires transshipment (e.g., feeder vessels).
  • Article 20 recognizes this and avoids unnecessary discrepancies.

Exporter’s Responsibility

  • Ensure the B/L shows the correct port of loading/discharge, vessel name, and consignee details.
  • Provide the full set of originals when required.

Bank’s Role

  • Banks examine only the face of the document.
  • They don’t verify the voyage details or whether goods truly arrived.

Practical Trade Example

A Bangladeshi exporter ships jute products to Hamburg, Germany. The LC requires:

  • Bill of Lading showing shipment from Chattogram Port to Hamburg Port.
  • “To order of issuing bank.”
  • Full set of 3 originals.

Exporter presents:

  • B/L issued by carrier, signed by its agent.
  • Shows “Shipped on board MV Ocean Star, Chattogram – 12 Aug 2025.”
  • Consignee: “To order of XYZ Bank.”
  • Full set of 3 originals provided.

✔ Bank accepts as compliant under Article 20.

If the B/L only said “Received for shipment” without on-board notation → ❌ discrepancy.

Why Article 20 Matters

  • Protects importers by ensuring goods are actually shipped.
  • Gives banks a reliable document of title for control of goods.
  • Provides exporters clarity on how to prepare a compliant B/L.
  • Aligns documentary rules with modern sea trade practices.

Final Thoughts

Article 20 of UCP 600 reinforces the importance of the Bill of Lading in global trade. By requiring on-board shipment evidence, correct ports, and proper signatures, it ensures trust between exporters, importers, and banks. This article keeps the B/L a cornerstone of secure international transactions.

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