A consignee is a person or entity that receives goods at the end of a shipment. This entity may or may not be the buyer of the goods. In some cases, the consignee may be the agent nominated by the buyer to receive goods on their behalf.
A Bill of Lading (BoL) legally requires the consignee to be physically present to accept a shipment and check its condition. Ownership of the goods will be transferred to the consignee once they have:
- received and checked the goods,
- signed the BoL,
- and made payment to the shipper (consignor).
Consignee vs Notify Party
A notify party is a person or entity that needs to be notified once a shipment has reached its final destination. This entity can be the same as the consignee, though this is not necessarily the case. They are often the ones arranging for customs clearance for the shipments.
Notify parties differ from consignees in the following ways:
- Ownership of goods
Only a consignee can claim ownership of shipped goods; a notify party cannot.
- Number of entities
There can and must only be one consignee for a shipment, but there can be multiple notify parties or none at all.
Adding a notify party to a BoL is optional, and is only necessary when you want someone else to know about the completed delivery. This may include the consignee themselves or entities that have a direct interest in knowing about the arrival of shipped goods such as:
However, it is good to note that most consignors are not legally obligated to deliver these notifications promptly.
Consignor vs Consignee
Simply put, a consignor is the shipper or sender of shipped goods, while a consignee is the receiver of those goods.
Consignors are typically manufacturers that send or export their goods to buyers or their agents via freight carriers. They are responsible for getting their goods packed and prepared for shipment.
They also put together all the required paperwork that ensures their shipment is delivered to the correct recipient, at the correct destination.
In international shipping, the consignor is also known as the exporter of record, while the consignee is the importer of record.
Consignee vs Carrier
The carrier does not own the cargo, but is responsible for ensuring that goods are not lost during transportation.
Example of a Consignee in Shipping
For example, company ABC, an automobile manufacturer, wants to export 20 new cars to company XYZ, a car dealership. They employ M&P International Freights, a freight forwarding service, to handle the shipment.
M&P then arranges for shipping company JKL to pick up the cars from ABC’s warehouse, load them onto RoRo ships and deliver them to XYZ’s showroom. Once the shipment arrives at the destination and is paid and signed for, ownership of the 20 cars will be transferred from ABC to XYZ.
In this case, ABC is the consignor (shipper), XYZ is the consignee (receiver), JKL is the carrier and the cars are the consigned goods.