Maritime Law and Practice in China
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CHAPTER 8
Freight forwarding and multimodal transport
Freight forwarding and multimodal transport
8.1 Ocean freight forwarding is an important part of international shipping carriage. Ocean freight forwarders are important intermediaries between cargo interests and carriers. However, there is no concept of ocean freight forwarding or ocean freight forwarders in the CMC 1992. In other words, the CMC 1992 does not regulate the business of ocean freight forwarding. Instead, departmental regulations govern the administration and operation of ocean freight forwarding. Unlike the traditional concept of freight forwarding, non-vessel-operating services provided by the non-vessel-operating common carrier (the “NVOCC”) is a newly-adopted concept regulated by departmental regulations. Freight forwarding services and non-vessel-operating services sometimes overlap and the status of service providers may not be clear in practice. However, it is important to clarify whether the services provider is an ocean freight forwarder as the agent or the NVOCC as the carrier. Multimodal transport is regulated by both the CMC 1992 and the Contract Law.Freight forwarding
Freight forwarding services
8.2 The regulations for freight forwarding are the Provisions of the People’s Republic of China on Administration of the International Freight Forwarding 1995 (Provisions on Administration of the International Freight Forwarding 1995).1 Although they are administrative regulations, the concept of freight forwarding in the regulations reflects the common understanding of ocean freight forwarding in practice. Freight forwarding means the profession that receives the entrustment of the consignee or the shipper of imported or exported goods in the name of the entrusting person or its own name, to handle international carriage and related business for the entrusting person and to collect remuneration for services.2 Freight forwarding includes ocean freight forwarding. 8.3 The Implementation Rules for the Administrative Provisions on International Freight Forwarding of the People’s Republic of China 2004 (Implementation Rules forPage 94
- (1) collection of cargoes, booking spaces (including chartering of ships, planes and shipping spaces), consignment, warehousing and packaging;
- (2) supervision of loading and unloading of goods, vanning, devanning, de-consolidation and transit of containers, and related short-distance transport services;
- (3) customs declarations, applications for examination, applications for inspection and arrangement of insurance;
- (4) preparation and issuance of relevant documents, payment of freight, and settlement and payment of incidental expenses;
- (5) freight forwarding of international exhibits, personal belongings and transit goods;
- (6) international multimodal transport and container transport (including container consolidation);
- (7) international express delivery (excluding personal letters); and
- (8) consultation and other business related to international freight forwarding.
Freight forwarder
8.4 The international freight forwarder5 (including the ocean freight forwarder under the Implementation Rules for International Freight Forwarding 2004) may engage in international freight forwarding as an agent for the consignee and/or the shipper of imported and exported goods or as an independent contractor. As an agent, the international freight forwarder may engage in relevant business in the names of its principals6 or in its own name,7 and collect an agency fee or commission. As an independent contractor, the international freight forwarder may accept the entrustment by the consignee or the shipper of imported and exported goods or agents thereof, sign and issue transport documents, perform transport contracts, and collect freight and service fees.8 Therefore, the ocean freight forwarder acting as an independent contractor is the contractual carrier on the freight forwarder’s bill of lading,9 namely the house bill of lading. 8.5 When engaging in relevant business as an agent, the international freight forwarder shall conclude a written agency contract with its principal. If any business dispute arises between the freight forwarder and its principal, the written agency contract shall be taken as the basis for settling the said dispute. If the international freight forwarder engages in relevant business as an independent contractor, it shall sign and issue relevant transport documents to the cargo interests. If any business dispute arises between the internationalPage 95
Disputes over ocean freight forwarder
8.7 Although the CMC 1992 does not provide rules for ocean freight forwarding, the SPC provides rules in its judicial interpretation of the Provisions of the Supreme People’s Court on Certain Issues concerning the Trial of Cases of Disputes over Ocean Freight Forwarding 2012 (Provisions on Disputes over Ocean Freight Forwarding 2012).13 The Provisions on Disputes over Ocean Freight Forwarding 2012 apply to the following disputes that occur in freight forwarding transactions:14- (1) disputes arising from cargo space booking, customs clearance, inspection reporting, test reporting and insurance services;
- (2) disputes arising from cargo packaging, packaging supervision, unloading supervision, container devanning, distribution and transfer services;
- (3) disputes arising from preparation or delivery of relevant documents or settlement of fees;
- (4) disputes arising from warehousing and land transport services; and
- (5) disputes arising from handling other marine freight forwarding transactions.
Chinese maritime courts have jurisdiction of the aforementioned disputes.15 The Provisions on Disputes over Ocean Freight Forwarding 2012 do not apply to cases of disputes over freight forwarding involving coastal and inland transport of goods.16