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Shipper, Consignee, and Notify Party|How to distinguish

If you’re in the shipping or logistics industry, you must have come across three terms: shipper, consignee, and notify party. While many people use these terms interchangeably, they are actually distinct roles with different responsibilities. 
Shipper, Consignee, and Notify Party-How to distinguish

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Shippers, consignees, and notify parties are crucial elements of many shipping processes, including overseas goods transportation, LCL (Less than Container Load), FCL (Full Container Load) shipments, and commercial shipping. 

Let’s explain each of these terms below. We also distinguish them to help you understand who does what in the shipping process.

What Is a Shipper?

In shipping, a shipper, also called an exporter, is an entity that ships goods from one place to another. The entity may be an individual or a company. 

Shippers handle the paperwork related to the logistics. Even before the goods are ready for transportation, the shipper ensures the packaging of goods is compliant with regulations. 

These entities are also financially responsible for export customs duties, freight charges, and other taxes. 

Shipper, Consignee, Notify Party, Logistics Warehouse Manager

What Is a Consignee?

A consignee can be an individual or company—the party that receives the freight in the destination country. The consignee’s name appears in the Bill of Lading (B/L), which is a legal document that the carrier issues as evidence of receiving goods for shipment.

Once the shipped goods reach the destination, the consignee’s role begins. They inspect the goods and manage their storage and delivery to the final destination. 

A consignee’s other roles include: 

  • Setting expectations for the shipment’s consignor 
  • Collecting the shipment from the carrier
  • Inspecting the shipment for missing or damaged items 
  • Paying duties and taxes (Incoterms) 

The consignee has ownership of the shipment upon its arrival at the destination port. 

It’s imperative for the consignee to be present at the destination port to collect the freight. The end customer or the notify party cannot receive the goods on their behalf. 

What Is a Notify Party?

If there’s a change in the shipment’s status or any issues during transportation, the notify party is informed. They play a passive role, unlike the shipper and consignee, who actively participate in the shipping process.

Either the consignee or the shipper can designate a notify party. Alternatively, the notify party can be a shipping agent assigned by the shipper. They may be a freight forwarder or a customs broker. 

Notify parties usually do not have any legal or financial stake in the shipment. They simply expedite information flow. 

How Do the Shipper, Consignee, and Notify Party Differ?

All three of these entities are interconnected in the shipping process. They form a chain of communication, in which the information flows from the shipper to the consignee and the notify party provides critical support from behind the scene. 

The shipper is the starting and the consignee is the ending point of this chain. The shipper initiates the shipment. They engage a carrier to transport the goods and designate a consignee to receive them. 

The notify party isn’t exactly the middleman in this process. They’re more like the invisible eyes and ears of the shipper and consignee, who keep both parties (the shipper and the consignee) informed about shipment status. 

Let’s understand this with an example. Suppose you’re a supplier based in China and have shipped a batch of goods to a customer in the US. 

In this case, you’re the shipper. You have to package the goods and arrange inland transportation to the port of departure. Plus, you engage a carrier to transport the goods by sea. 

The US party that will receive the goods is the consignee. They’ll transport the goods from the port of arrival to their warehouse after customs clearance. 

The notify party may be the customs broker or freight forwarder, depending on the arrangements made by the shipper. They’ll receive and process all shipment information, such as tracking and delivery updates, and communicate it to the shipper and consignee. 

The notify party may also handle additional documentation and payment processing

Shipping Documents Handled by the Notify Party, Shipper, and Consignee

The shipper, consignee, and notify party have to handle certain documents. Let’s discuss this in detail. 

Shipper Documentation

The shipper typically produces three documents. 

  • Bill of Lading: The Bill of Lading is the contract between the carrier and the shipper. It’s sort of like a receipt for goods that have been shipped.
  • Commercial Invoice: The invoice includes all the crucial information about the transaction, such as the type and quantity of goods, payment terms, etc. 
  • Packing List: The Packing List includes details of each package, such as dimensions, weight, and contents. The carrier uses it to determine how much space is needed for the goods during transit. 

In some countries, the shipper also has to deal with the Export Declaration. The document declares the shipped goods to the origin country’s customs. 

Consignee Documentation

The consignee also uses the Bill of Lading to claim the goods. They also produce the Commercial Invoice, which allows them to get clearance from customs. 

The consignee uses the Packing List created by the shipper to check if all goods have arrived and are in good condition. If there are any discrepancies, the consignee informs the carrier immediately. 

If the designation country requires, the consignee will have to fill out an Import Declaration. All documents should have the consignee’s TIN/VAT number, address, name, and relevant details. 

Notify Party Documentation

The notify party usually doesn’t have to fill out any documents. They may have to coordinate with both the shipper and consignee for the production of the Packing List, Commercial Invoice, and Bill of Lading. 

In some cases, the notify party handles customs clearance and fills out the documents for the consignee. 

The notify party and the consignee can be the same person or entity. If this is the case, the Bill of Lading must specify this information. 

Conclusion

International trade is a complex process that involves various documentation requirements for all parties involved. If you’re planning to export or import goods, you must be familiar with the involved parties and associated documents. 

Most importantly, don’t overlook the importance of a reliable notify party. Gorto Freight acts as your dedicated freight forward to optimize your supply chain, particularly from China. Get in touch to learn more. 

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