Does Being Listed as the “Shipper” on the Bill of Lading Alone Give Rise to Liability for Demurrage Charges?
In international trade, it is common for exporters, in particular, to be listed as the “shipper” on bills of lading and similar transport documents issued in connection with sea or multimodal transport. In practice, however, carriers often direct claims for demurrage, storage fees, container detention charges, and similar freight-related charges against exporting sellers, citing solely the fact that they are listed as “shipper” on the transport document.
However, considering the structure of the Turkish Commercial Code (“TCC”), being listed as the “shipper” on the bill of lading does not, by itself, make a person a party to the bill of lading contract and, consequently, liable for demurrage.
The Legal Basis for Demurrage Charges
Pursuant to Article 1200 of the Turkish Commercial Code (TCC), the carrier is liable for the freight charges. Similarly, Article 1174(4) of the TCC stipulates that the carrier is liable for demurrage charges arising at the port of discharge.
Therefore, the key issue in determining the party liable for demurrage claims is whether the relevant party is a party to the contract of carriage.
Indeed, legal doctrine also states that container demurrage constitutes a claim specific to maritime trade arising from a breach of a secondary obligation under the freight contract.
For this reason, it is not possible to automatically consider a person who is not a party to the contract of carriage as the debtor for demurrage merely because they have a connection to the cargo.
The Terms “Shipper” and “Consignor” Are Not the Same Thing
One of the most common mistakes encountered in practice is equating the “shipper” entry on the bill of lading directly with the term “consignor.”
However, particularly in sales based on the FOB delivery term:
the transportation arrangements are often made by the buyer,
the freight contract is established by the buyer or their forwarder,
and the exporter-seller is merely in the role of the shipper.
Nevertheless, in the standard bill of lading texts of international carriers, the concept of “merchant” is defined extremely broadly; the shipper, consignee, holder, cargo owner, and many other parties related to the cargo are all classified under the same category.
Due to the economic dominance of large-scale carriers in the industry, these bills of lading are often used on a “take it or leave it” basis; exporters’ ability to negotiate these texts, which effectively serve as general terms and conditions, is in practice quite limited.
However, this does not mean that the exporter, who is not a party to the transport contract, is automatically held liable for freight charges.
The Supreme Court’s Approach
In its decision dated July 4, 2014, the 11th Civil Chamber of the Supreme Court of Appeals clearly held that, in a sale made under FOB terms, merely acting as the shipper does not render a person the carrier. The decision stated that the obligation to enter into a bill of lading agreement rests with the buyer, and that the seller cannot be considered the carrier in an FOB sale.
The following finding in the Supreme Court’s decision is particularly noteworthy:
“Not only did the plaintiff fail to prove that the defendant, who was the shipper, was also the carrier, but it was also determined that the defendant could not be considered the carrier based on the bill of lading instructions and the FOB delivery terms in the sales invoice…”
Consequently, the Supreme Court did not consider the mere “shipper” notation on the bill of lading sufficient; instead, it based its decision on who actually entered into the contract of carriage.
The Supreme Court’s Criteria for Determining the Carrier
In Turkish law, the determination of who is liable for demurrage fundamentally depends on whether the relevant party is a contracting party to the carriage agreement. At this point, the case law of the Court of Cassation considers not only the “shipper” notation in the bill of lading, but also the economic and contractual reality of the transport relationship.
Indeed, in the established jurisprudence of the 11th Civil Chamber of the Court of Cassation, factors such as which party the freight invoice is issued to and who actually pays it are accepted as important criteria in determining the status of the “freight payer / charterer”.
In its decision dated 02.11.2015, the 11th Civil Chamber held that, since the freight invoice had been issued by the defendant company in the name of the plaintiff, the plaintiff was considered the “contracting carrier (upper carrier)” and the defendant the “actual carrier”.
This decision demonstrates that, in maritime disputes, the Court of Cassation does not rely solely on formal records when determining party status, but also takes into account invoicing relations, payment flows, and the economic reality of the transport organization.
As a natural consequence of this approach, in practice it is sometimes observed that although only the exporter/seller appears as “shipper” in the bill of lading, the freight contract is actually concluded by the buyer or its freight forwarder, and the freight invoice is issued to and paid by that party. In such cases, it is not possible to conclude that the exporter/seller has the status of freight payer solely on the basis of the “shipper” record in the transport document.
On the contrary, unless the parties have expressly agreed otherwise, within the framework of the Court of Cassation’s approach, the party in whose name the freight invoice is issued and by whom it is paid is generally deemed to be the freight payer in the relevant transport relationship.
Therefore, a shipper who is not the contracting freight payer will not, by merely performing the freight payment as a third party, become the freight payer. In such a case, for the shipper to be held liable for demurrage and other freight-related ancillary charges, there must be an explicit contractual intention or a separately established legal relationship in which such obligations are assumed vis-à-vis the carrier.
The Istanbul BAM Approach
A similar approach is also reflected in the decision of the Istanbul Regional Court of Appeal (İstanbul Bölge Adliye Mahkemesi), 14th Civil Chamber, dated 20.02.2025.
In its judgment, the Court explicitly stated:
“Merely being indicated as ‘Shipper’ in the bill of lading does not, by itself, render the party the contracting freight payer (charterer).”
In the same decision, it was further evaluated that due to the FOB delivery term, the obligation to conclude the freight contract rests with the buyer, and the seller is positioned merely as a third-party shipper.
This approach represents an important reflection of the principle of relativity of contracts in Turkish law, also extending its effect into maritime commercial law.
Under What Circumstances Can the Shipper Be Held Liable?
Of course, it cannot be said that a shipper can never be held liable for demurrage under any circumstances.
For instance, liability of the shipper may arise in cases such as:
Being a direct party to the contract of carriage
Explicitly assuming liability for freight or demurrage charges
Accepting responsibility through fixture notes, booking confirmations, or separate undertakings
Entering into a direct contractual relationship with the carrier
Where the parties have agreed otherwise
Accordingly, in each individual case:
The agreed delivery term
Which party organized the transport
The parties to the freight contract
To whom invoices were issued
The nature of the legal relationship with the carrier
The intentions of the parties and commercial documents
must all be assessed together.
Result
In Turkish law, being indicated as “shipper” in the bill of lading does not, on its own, render a party the contracting freight payer (charterer) and therefore liable for demurrage.
In particular, in FOB sales transactions, where the buyer is the party who actually concludes the contract of carriage, case law of the Court of Cassation and the Regional Courts of Appeal confirms that the exporter/seller acts merely in the capacity of shipper and cannot be held liable for demurrage, storage charges, or container detention fees, which are ancillary to freight.
In this context, claims raised by the carrier cannot be based solely on the “shipper” designation in the bill of lading; instead, the parties to the contract of carriage and the economic and legal reality of the specific commercial relationship must be assessed together.
Attorney Muhammed Safa Koyuncu
REFERENCES:
Court of Cassation 11th Civil Chamber, Case No. 2014/6623, Decision No. 2014/12886, Dated 04.07.2014
Istanbul Regional Court of Appeal (BAM) 14th Civil Chamber, Case No. 2023/1526, Decision No. 2025/285, Dated 20.02.2025
Court of Cassation 11th Civil Chamber, Case No. 2015/4749, Decision No. 2015/11325, Dated 02.11.2015
Sevi Ceren Dalbeyler, Demurrage and Legal Issues in Container Transport by Sea, Marmara University Institute of Social Sciences, Doctoral Thesis, 2023