In every freight transaction, there are two parties involved – a consignor and a consignee. The consignor is the party that is responsible for sending out the product while the consignee is the person or entity that receives the goods at the end of the transaction.
The consignor can be the seller, manufacturer or distributor.
Responsibilities of a Consignor
The key responsibilities of a consignor are as follows:
- Picking and packing goods that are ordered
- Preparing the Bill of Lading (BoL) and Certificate of Origin (CO)
- Arranging for a carrier to transport the goods
- Ensuring products are in good condition before shipping them
- Dispatching items to their destinations
- Payment of freight
Consignor vs Consignee
The consignor is the entity that will be exporting the product while the consignee is the entity that will be receiving the goods at the end of the shipment.
When shipping internationally, the consignor is known the exporter of record while the consignee is known as the importer of record.
- Area of responsibility
Before sending out the products, consignors are responsible for checking that they are in good condition and preparing the shipping documents required. On the other hand, consignees are responsible for inspecting the products upon receipt before signing the necessary documents.
- Ownership of goods
The ownership of the products remains with the consignor until the consignee signs the BoL. Once signed, the ownership will legally be transferred to the consignee.
- Freight and tax payment responsibility
Typically, the consignor will bear the costs of engaging a freight company. On the other hand, the consignee is responsible for paying the taxes and duties upon receiving the goods. However, this may not always be the case depending on the agreement made between the 2 parties.
Consignor vs Shipper
Shippers are the entities that sell and send out products to their customers. Hence, shippers and consignors are the same and the terms can be used interchangeably.
However, they are different from carriers. Carriers are shipping service providers who serve as the intermediary between consignors and consignees by transporting the cargo (e.g. via sea or air freight).
Example of a Consignor-Consignee Relationship
This is an example of a consignor-consignee relationship:
Company A, a pharmaceutical company based in Singapore, made a deal with an Indonesia-based distributor, company B, to send over some vaccines. In this case, company A is the consignor or shipper and company B is the consignee.
In order for company A to deliver the goods to company B, it engages the services of shipping company Z. Shipping company Z, the carrier, is responsible for transporting the vaccines from company A’s warehouse to company B in the most suitable manner to ensure the efficacy of the products.