The Hong Kong Association of Freight Forwarding and Logistics Ltd (HAFFA) provides a number of interesting 'Recommended Practices' on its website. BP007, while only accessible to HAFFA Members, examines the expressions 'O/B' and 'C/O' which are sometimes used in the 'shipper' or 'consignee' boxes on the front of carriage documents. BP007 explains that customers from Mainland China, who do not have a presence in Hong Kong to organise or handle their exports or imports through Hong Kong, ask Hong Kong forwarders to 'lend their names' for use in the 'shipper' or 'consignee' box of the relevant bill of lading or sea waybill.

Meaning of 'O/B' in shipping

According to BP007, the expression 'o/b' (eg. ABC Forwarder o/b China Trading) is the short form of 'on behalf of'', which indicates that 'ABC Forwarder' acts as agent of 'China Trading', ie. the expression 'O/B' is not likely to make 'ABC Forwarder' the consignee under the bill of lading or sea waybill. However, BP007 then explains that the expression 'O/B' in the consignee box might suggest that 'ABC Forwarder' has (apparent) authority to receive the goods for 'China Trading', his principal. In any case, BP007 recommends that the carrier demands clear evidence that 'China Trading' authorised 'ABC Forwarder' and equally that 'ABC Forwarder' would be well advised to obtain such clear evidence.

Meaning of 'C/O' in shipping

Conversely, the expression 'c/o' (eg. China Trading c/o ABC Forwarder) stands for 'care of'', which is generally used for addressing correspondence through an intermediary, in which case 'ABC Forwarder' acts on behalf of 'China Trading' for the limited purpose of receiving and passing on correspondence. With regard to release of cargo, BP007 again recommends that the carrier demands production of a written authorisation (or other satisfactory evidence) which shows that 'China Trading' authorised 'ABC Forwarder' to take delivery of the goods. However, BP007 warns that a carrier could argue that 'C/O' has the 'wider' meaning of 'in the care of' or 'in the charge of', in which case it might justifiably deliver the goods to 'ABC Forwarder'.

Conclusion

BP007 provides welcome guidance. It appears to indicate that both 'O/B' and 'C/O' might have more than one meaning. Clearly, as BP007 emphasised, ascertaining the meaning of 'O/B' and 'C/O' requires consideration of all relevant documents and surrounding circumstances.

One problem for a forwarder or transport operator who accepts the expressions 'O/B' or 'C/O' on their carriage document is that, while 'O/B' or 'C/O' might designate an agency contract between the two named parties, the nature or scope of this agency contract may be unclear. Arguably, the expressions 'O/B' and 'C/O' add another dimension to the already rather complex topic of cargo delivery. The Club therefore advises its Members to undertake due diligence to verify roles and responsibilities and avoid using the expressions 'O/B' and 'C/O' whenever this is commercially viable.

Apart from complicating delivery, 'O/B' and 'C/O' might also obscure which party is entitled to sue under the carriage document, although in Freight Systems Ltd v Korea Shipping Corporation (1988) the Hong Kong High Court held that 'Freight Systems Ltd o/b Marianne Trading Ltd' meant that Freight Systems were acting clearly as agents and therefore could not sue for an alleged breach of bill of lading terms.

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We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.

We look forward to hearing from you.

Peregrine Storrs-Fox
Risk Management Director, TT Club