Consignors and consignees are key players in the shipping industry. Understanding who is who and what each party is responsible for helps you avoid potential hiccups in your shipments.
A consignor is also known as a shipper, sender, originator, or shipping party. But, depending on their role in the supply chain, a consignor can be referred to as the supplier, vendor, or exporter when cargo is shipped overseas.
Similarly, a consignee may be called the shipment recipient or receiver or, simply, the client. Depending on their specific role, a consignee can equally be the buyer, retailer, or importer (for international freight).
Consignor And Consignee Meaning In Shipping
In cargo shipping, consignors and consignees have their own designated roles. Let’s break it down.
Who Is The Consignor?
The consignor is the party that initiates the shipment of goods. They are the ones who have the product, arrange for transportation, hand over the goods to a carrier, and send them to a receiver. Essentially, anyone who enters into an agreement to ship goods is the consignor.
What’s important to note is that the consignor usually retains ownership (title) of the goods until the consignee pays for them in full.
In international shipping, the consignor is typically considered the Exporter Of Record (EOR).
Who Is The Consignee?
The consignee is the receiving party of a shipment. They can be an individual, a company, or even an agent nominated by the buyer, like a third-party logistics (3PL) provider acting on behalf of the actual purchaser, as documented in the Bill of Lading. A consignee may also be legally required to be physically present to collect the shipment.
What Is The Difference Between Consignor And Consignee?
Consignees and consignors have distinct responsibilities. Here’s a handy table outlining their key differences:
Quick Reference: Consignee Vs. Consignor
| Feature | Consignor | Consignee |
| Role | Initiates the shipment and acts as the sender. | Receives the shipment at the designated destination. |
| Ownership | Typically retains ownership until full payment is made. | Gains ownership upon successful delivery and completion of payment. |
| International Trade | Typically acts as the exporter of record. | May act as the importer of record. |
| Common Examples | Manufacturers, wholesalers, exporters, e-commerce sellers. | Retailers, importers, wholesalers, 3PLs (acting on behalf). |
| Financial Responsibility | Typically responsible for export duties, freight charges, insurance, documentation & terminal handling charges at the point of origin. | Typically responsible for import duties, taxes, customs clearance fees & terminal handling charges at the point of destination. |
Note that in international cargo shipping, the financial responsibilities of the shipper and receiver are dictated by the Incoterm they have both agreed on.
Responsibilities, Duties & Liability Of The Consignor
The consignor sets the shipping process in motion!
Prepares Goods For Shipping
This includes carefully packaging the goods to prevent damage during transit and accurately labeling them with all necessary information for smooth processing.
Prepares Documentation
The consignor is responsible for preparing and providing essential shipping documents, such as the Bill of Lading (BOL), commercial invoice, packing list, and any required certificates or permits.
Arranges Safe Transportation
The consignor typically makes all transportation arrangements, including selecting a carrier or freight forwarder and negotiating shipping terms and processes. They do their best to mitigate risks, delays, or any other issues and buy shipping insurance.
Consignors are liable for complying with relevant export regulations, like obtaining necessary export licenses and adhering to trade laws. They must also keep the consignee informed about shipment details, tracking information, and expected delivery times.
As a consignor, you must be well aware of the carrier’s regulations and exclusions. You also have the right to claim against the carrier for issues like loss or damage during transit.
The Consignee’s Tasks In Receiving Shipments – Duties, Responsibilities & Liability
Once the shipment is en route, the consignee takes center stage.
Receives & Inspects
The consignee is liable to be physically present to collect the shipment (or as otherwise arranged), inspect it for damage or discrepancies, and promptly inform the consignor and report any issues.
Consignees have the right to demand delivery as per the carrier contract and also file compensation claims if needed.
Handles Customs Clearance
As a consignee, you’ll most likely be responsible for fulfilling all customs and regulatory requirements for imported goods, paying relevant taxes and customs clearance fees, and handling all delivery and import documents.
Claims Ownership
The consignee has the right to claim ownership after full payment. So, they should manage all necessary documents upon arrival to ensure proper ownership transfer.
Arranges Unloading & Storage
The consignee is responsible for coordinating unloading and further arrangements and transport needed from the point of destination to a warehouse, other facility, or other destination.
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