Bills of Lading - Revealthoughtrevealthought.weebly.com/.../7/32172955/bills_of_lading.pdfbills of lading Provide their insurance company with exact reason for the issuance of the

Bills of Lading

1

Functions - Bil l of Lading

Bill of Lading

2

Funct ions Bi l l of Lading

Rece ipt for the goods sh ipped

Ent i t les t ransfer o f t i t le to the ho lder o f the B/L

Ev idence of the terms of a f f re ightment – not the

actua l contract

Quas i -negot iab le instrument

Bill of Lading

3

Funct ions B i l l o f Lading

• The contrac t commences as soon as the S/L ine accepts

to car ry the goods

• Subsequent i ssue o f the b i l l mere ly conf i rms the

agreement and prov ides the ev idence o f the cont ract

•Trans ferab le document o f t i t l e to goods

• Goods can be bought and sold merely by passing of the bill of

lading provided all endorsements are in order.

Bill of Lading

4


Bill of Lading

5

A bill of lading is to goods what a cheque is to money.

All the criteria applicable to a cheque equally apply

to Bills of Lading.


Bill of Lading

6

Carrier cannot deny accuracy of any detail acknowledged by it on the B/L.

Knowingly showing incorrect information is a fraud.

Types - Bills of Lading

7

On-Board Bi l l of Lading

Ev idence of conta iner/sh ipment be ing on board the

sh ip/vesse l

Date o f “sh ipped on board” endorsed on B/L Ev idences actua l date vesse l sa i led f rom POL

Conf i rmat ion for the cons ignee that the goods have

been sh ipped out

Eases f inanc ia l set t lement o f export sa le

Types – Bill of Lading

8

Received for Shipment Bi l l of Lading

Ev idence of conta iner/sh ipment hav ing been

rece ived by the S/L ine at the Port

Goods rece ived in warehouse, t rans i t shed, ICD/CFS,

Port

Issued as per contract or L/C

Cons ignee not ob l iged to accept th is type of B/L

[CIF/CFR contract]


9

Through Bi l l of Lading

I ssued when two or more • Vessels used • Modes of transport used

Examples • Nhava Sheva to Tokyo via Singapore • Inlands in Russia via Helsinki or Antwerp

Avo ids compl i c i ty o f sh ipper cont rac t ing w i th d i f ferent car r i e rs or ar rang ing t ranspor t by h imse l f Covers who le t rans i t & sh ipper dea l s w i th 1 s t car r i e r Covers a through rate [Or ig in -Dest inat ion]


10

Stale B i l l of Lading

B/L shou ld be w i th cons ignee

• Prior to arrival of shipment at destination

• At time of arrival of shipment at destination

De l i very cannot be e f fec ted w i thout presentat ion o f

OB/L

Late ar r i va l impl i es l evy o f

• Ground Rent Charges

• Container Detention Charges


11

Clean Bi l l o f Lading

Each B/L s ta tes

• “In apparent good order or condition” • Refers to cargo

I f no o ther c l ause pu t by the S/L ine -B/L cons t rued as

• “Clean’ • “Unclaused”

I ssuance o f “C lean B/L’ – S /L ine admi ts fu l l l i ab i l i ty o f

the cargo desc r ibed in the B/L under the l aw and the i r

con t rac t

P re fe r red by Banks fo r f i nanc ia l se t t l ement


12

Claused Bi l l of Lading

I f any d i sc repancy not i ced at t ime o f cargo s tu f f ing,

S/L ine w i l l endorse the B/L accord ing ly

D i screpanc ies

• Inadequate packaging

• Wet or stained cartons

• Damaged cartons

• Damaged crates

• Missing cartons

Not pre fer red by Banks for f i nanc ia l set t l ement


13

Claused Bi l l of Lading

S/L ine endorsement on B/L as above leads to

• “Unclean B/L” • “Claused B/L” • “Foul B/L” • Damaged crates

• Missing cartons

Such B/L’s unacceptab le to Banks


14

Groupage & House Bi l l of Lading

Mu l t ip le Sh ippers / Mu l t ip le Cons ignees

Groupage connotes goods to same Buyer

Conso l idat ion connotes mul t ip le dest inat ions/mul t ip le

buyers

S/L ine i ssues MB/L to FF

FF i ssues own HB/L’s to Sh ippers

Acceptab i l i ty o f HB/L’s by Banks to be conf i rmed pr io r

L/C ins tated


15

Groupage & House Bi l l of Lading

Advantages o f Conso l idat ion

• Lower insurance premium

• Slightly longer transits than FCL’s

• Prevents damage & pilferage

• Economical mode compared to FCL


16

Negotiable FIATA Combined Transport B i l l of Lading

Abbrev ia ted as FBL

Negot iab le ins t rument

Deve loped by “ Internat iona l federat ion o f Forward ing

Agents Assoc ia t ion”

Acceptab le under ICC ru les – “Un i form Customs and

Pract i ce for Documentary Cred i ts”

Need to s t ipu la te same in L/C


17

Switch B i l l o f Lad ing

Requ irement Goods r eso ld – change i n d i s cha rge po r t due h igh -seas sa l e The se l l e r (who cou ld be an i n tend ing agen t ) does no t w i sh t he cons ignee to know the ac tua l sh ippe r The se l l e r does no t wan t t o know the buye r t o know the a c tua l coun t ry o f o r i g i n o f the ca rgo so he r eques t s tha t the po r t o f l oad ing be shown as some po r t o the r than the one t he ca rgo was l oaded f r om The goods were sh ipped o r i g i na l l y i n sma l l pa r ce l s , and the buye r r equ i r es one b i l l o f l ad ing cove r i ng a l l o f t he pa r ce l s


18

Switch B i l l o f Lad ing

Precaut ions Cove red by the i r i n su rance f o r i s suance o f such sw i t ch b i l l s o f l ad ing P rov ide the i r i n su rance company w i th exac t r eason f o r t he i s suance o f the sw i t ch b i l l o f l ad ing Have the wr i t t en au tho r i ty o f t he p r i n c i pa l be fo re i s su ing t he sw i t ch b i l l o f l ad ing , i f t he i s su ing pa r ty i s a c t i ng as agen t s f o r a sh ipp ing l i ne o r p r i n c i pa l I s sue the sw i t ched b i l l on l y a f t e r co l l e c t i ng f i r s t se t o f b i l l s , a s the dange r s o f two se t s o f o r i g i na l b i l l s i n c i r cu l a t i on f o r the same ca rgo a re many


19

S w i t c h B i l l o f L a d i n g

Precaut ions The sw i t ched se t shou ld have same in f o rmat i on as o r i g i na l b i l l o f l ad ing , (po r t o f l oad ing , cond i t i on and quan t i ty o f t he ca rgo ) . I f sw i t ch b i l l s con ta ins m i s rep resen ta t i ons , the ca r r i e r /agen t w i l l be a t r i s k o f c l a ims f r om pa r t i e s who have su f f e red a l o s s because o f such m i s rep resen ta t i ons . I f app roved by P r i n c i pa l t o Agen t t o i s sue the sw i t ch b i l l o f l ad ing based on an i ndemn i ty f r om the cus tomer, the agen t shou ld ensu re to ge t the wo rd ing f o rmat f r om the p r i n c i pa l and ge t the comp le ted i ndemn i ty app roved by the p r i n c i pa l be fo re i s su ing the sw i t ch b i l l o f l ad ing .


20

Switch Bi l l of Lading

The pract i ce o f i ssuance o f sw i tch b i l l s o f l ad ing i s cons idered by many, inc lud ing TT c lubs and insurance compan ies , to be dub ious or f raudu lent depend ing upon the reasons why the sw i tch b i l l o f l ad ing i s requ i red to be i ssued


21

Switch Bi l l of Lading

I t seems to be the concerted v iew of a lmost a l l insurance companies cover ing exports , that a swi tch b i l l o f lad ing issued wi th any misrepresentat ion or in format ion contrary to the f i rs t set i ssued, wi thout the express acceptance and understanding of the buyer is a f raudulent document


22

Seaway Bi l l of Lading

Funct ions Rece ipt fo r goods Ev idence o f the cont rac t Non-negot iab le document and not a document o f t i t l e Hague or Hague V i sby ru les app ly to b i l l s o f l ad ing or s t ra ight B/L’s but not to seaway B/L’s


23

Seaway Bi l l of Lading Advantages Del ivery w i thout B/L No l e t ter o f i ndemni ty requ i rement - de l i very o f cargo w i thout b/ l Reduct ion in costs F raud or prob lems due los t or s to len documents min imized Paper document or an e lec t ron i c message . Idea l med ium to br idge gap between paper and e lec t ron i c commerce in most cost e f fec t i ve way


24

Seaway Bi l l of Lading


25

Di f ference between Master B/L and House B/L


26

Dif ference Between Master & House Bi l l of Lading

HB/L i ssued by NVOCC/FF to ac tua l customer

MB/L i ssued by S/L ine to NVOCC/FF – Ocean B/L

HB/L a rep l i ca o f MB/L except fo r

• Shipper

• Consignee

• Notify Party

Al l o ther deta i l s on both the B/L’s are ident i ca l


27

Is the B/L val id i f a l terat ions made to i t?

Bill of Lading

28

What happens i f the B/L is c laused or unclean?

Bill of Lading

29

What happens i f the B/L is not endorsed “Shipped on Board”?

Bill of Lading

30

The document does not indicate “Freight Pre -paid” for CIF or CFR contracts?

Bill of Lading

31

Pre-dat ing or Back-dating of B/L ’s – Is i t legal?

Bill of Lading

32


SOB pr ior to ac tua l sa i l i ng o f vesse l

Why i s i t requested by the Sh ipper?

• L/C stipulates a date by which shipment must be effected

• Non-execution of the shipment in time

• Attracting penalties

• Default

• Cancellation of order

When the cons ignee re fuses to extend the L/C date

Bill of Lading

33


S/L ines do not enter ta in such requests

• Code of conduct

• Not being a party to the fraudulent activity

• Letter of indemnity not accepted by S/Lines

S/L ines w i l l a t most i ssue a “RFS” B/L-prov ided goods

have been rece ived by them pr io r to requested date

Any c la ims made by cons ignee w i l l not be honoured by

the insurance underwr i ters

Bill of Lading

34


Bill of Lading

35

This constitutes fraud and wilful misrepresentation of facts to the consignee

What is the number of B/L ’s that can be issued?

Bill of Lading

36

What i s the number o f B/L ’s that can be i ssued? Normal ly 3 or ig ina l s i ssued

• Consignee [1 original] • Bank [1 original] • Shipper [1 original]

S/L ine can i ssue more subject to request Number o f OBL’s must be ment ioned on the sets i ssued Adv i sab le not to get more sets i ssued than requ i red

• Risk of fraud • Theft • Unauthorized release of shipment to incorrect party

Bill of Lading

37

How does S/Line protect i ts interests for cargo which is stuffed at the factory of the Shipper?

Bill of Lading

38

S/Lines protect ion – cargo stuffed at Shipper ’s factory?

S/L ine puts the c lause on the B/L

“Shippers Load Stow and Count” (SLAC) and

“Said to Contain” (STC)

Bill of Lading

39

Should the “Shipped on Board” and “Date of Issue” of B/L be the same ?

Bill of Lading

40

Should the “Shipped on Board” and “Date of Issue” of B/L be the same ?

UCP600 Ar t i c l e 20 – Sect ion A – Sub-Sect ion i i

The date o f i ssuance o f the b i l l o f l ad ing w i l l be deemed to be the date o f sh ipment un less the b i l l o f

l ad ing conta ins an on board notat ion ind i cat ing the date o f sh ipment , in wh ich case the date s ta ted in the on

board notat ion w i l l be deemed to be the date o f sh ipment .

Bill of Lading

41

What is a “Telex Release” ?

Bill of Lading

42

What i s a “Te lex Release” ?

Message sent f rom load por t to d i scharge por t fo r re lease o f sh ipment

• S/Line • Agent • FF to their Agent/Associate

A l l o r ig ina l s submi t ted at or ig in Prov ided the cons ignee i s not a “Bank” or “To Order ” Cargo re leased to cons ignee ment ioned on B/L-w i thout submiss ion o f or ig ina l B/L

Bill of Lading

43

What is a “Telex Release” ?

Reasons

• Shipper & Consignee are offices of the same company

• Example-DHL, India & DHL, China

• Example-Infosys, India & Infosys, New York

• Delay in dispatch of documents-vessel arrived or

arriving POD

• NVOCC / FF – HB/L releases

Bill of Lading

44

Dif ference between a “Telex Release” & “Express Release” B/L ’s ?

Bill of Lading

45

Di f ference - “Te lex Re lease” & “Express Re lease” B/L ’s ?

Express re lease

• Shipper and Consignee part of the same group - no negotiations required between the two either directly or via bank for release of the cargo • Shipment doesn’t involve any bank and the shipper doesn’t really need to submit original bill of lading to secure his payment • When the shipper doesn’t have the time to print the original bills and courier the same to the consignee • Shipper -FF ….. Issues House Bill of Lading to his customers…..takes an express release or a waybill instead of original master bill of lading from the S/Line

Bill of Lading

46

Di f ference - “Te lex Re lease” & “Express Re lease” B/L ’s ?

The KEY DIFFERENCE between the two i s that in the case o f a te lex re lease there i s a phys ica l o r ig ina l b i l l o f

lad ing i ssued, pr in ted and sur rendered whereas in the case o f express re lease, there i s NO or ig ina l b i l l o f

l ad ing i ssued to anyone and in i t s cur rent form i t i s not a negot iab le document .

Bill of Lading

47

What is High Sea Sale ?

Bill of Lading

48

High Sea Sale

Sa le car r i ed out by ac tua l cons ignee on B/L to another

buyer wh i l e goods are a t h igh seas

Sa i l ed f rom POL – not yet ar r i ved POD

HSS contract /agreement on s tamp paper

Post agreement – B/L to be endorsed favour new buyer

Endorsement – “Trans fer red on H igh Sea Sa les bas i s

to M/S ………” & s igned & s tamped by HSS se l l e r

Bill of Lading

49

High Sea Sa le

I f e f fec ted a f te r a r r i va l a t POD – No t a HSS

IGM needs to be f i l ed in favour o f new buyer

Fa i l u re w i l l

• Need amendment

• Cause delays

• Attract customs penalties

Mu l t i p l e HSS poss ib le

Mu l t i p l e HSS – Las t buyer shou ld have cop ies o f a l l

p rev ious HSS agreements

No Sa les Tax l ev ied on HSS

Bill of Lading

50

51

Documents

Bills of Lading - Revealthoughtrevealthought.weebly.com/.../7/32172955/bills_of_lading.pdfbills of lading Provide their insurance company with exact reason for the issuance of the