Unit 6 Bills Of Lading

Introduction In this unit, we will cover the ins and outs of the bill of lading form. Why it’s important as well as the different types. The consequences of not using a bill of lading and the consequences of making mistakes when filling it out. Bills of lading can appear daunting, both to practitioners who are new to shipping, and to practitioners who specialise in other areas but need sometimes to refer to reported cases involving bills of lading.

1. What Is A Bill Of Landing (BoL)? The bill of lading is a legally binding document providing the shipper and the carrier all the details needed to process the freight shipment and invoice it correctly. It is one of the most important documents in the shipping industry.

The Following Information Forms Part Of A Bill Of Landing Shippers and receiver’s consignee’s names and complete addresses. Purchase Order or special account numbers used between businesses for order tracking. Special instructions for the carrier to ensure prompt delivery The date of the shipment The number of shipping units Type of packaging, including cartons, pallets, skids and drums A note if commodity is hazardous material. A description of the items being shipped, i.e. material of manufacture and common name. The exact weight of the shipment, if multiple commodities are being shipped, then the weight of each commodity is listed separately. The declared value of the goods being shipped.

1.1 The Purpose Of The Bill Of Lading The Bill of lading is sufficient evidence of a legal contract and can be used in litigation. The quality of a bill of lading must be understood by those using the form in the process of shipping freight. If you are to use it, its important for you to be extremely thorough. Paying attention to the bill’s accuracy when using it, is one of the most important things you can do to run your logistics department effectively.

Three Functions Of BOL On its own the bill of lading performs more than one function… Evidence of contract of carriage Receipt of goods Document of title 09/09/15

1.1.1 Evidence Of Contract Of Carriage The bill of lading is a contract between the seller and the buyer and many also think that a bill of lading is a contract of carriage between the carrier and shipper. This, however, is not entirely correct. The contract between a buyer and seller is established when the buyer places the order with the seller and they both discuss and agree the what, where, when, how and how much of the transaction in detail. The BOL is the evidence of the contract of carriage entered into between the “carrier” and the “shipper or freight owner” in order to carry out the transportation of the freight as per the contract between the buyer and the seller.

1.1.2 Receipt Of Goods A BOL is issued by the carrier or their third party logistics provider to the shipper or 3PL in exchange for the receipt of the freight. The issuance of the bill of lading is proof that the carrier has received to goods from the shipper or their 3PL in apparent good order and condition, as handed over by the shipper.

1.1.3 Document Of Title Whoever is the holder of the bill of lading has the title to the goods. However, this title varies according to the way in which the bill of lading has been consigned.

1.2 Consequence Of Not Using Or Inaccurate Bill Of Lading Loss of the right to limit liability Loss of P&I cover Loss of the right of indemnity from the charterer Criminal prosecution

2. Types of Bills Of Lading 2.1 Shipped Bill Of Lading Under the carriage of goods by sea Act 1924, the shipper can demand that the ship-owner supplies bills of lading proving that the goods have been actually shipped. For this reason most bill of lading forms are already printed as shipped bills and commence with the wording: “Shipped in apparent good order and condition”

2.2 Received Bill Of Lading This arises where the word “shipped” does not appear on the bill of lading. It merely confirms that the goods have been handed over to the shipowner and are in his custody.

2.3 Through Bill of Lading In many cases it is necessary to employ two or more carriers to get the goods to their final destination. The on carriage may be either y a second vessel. In such cases it would be very complicated an more expensive if the shipper had to arrange on carriage himself by employing an agent at the point to transhipment.

2.4 Groupage Bill of Lading Forwarding agents are permitted to “group "together particular compatible consignments from individual consignors to various consignees, situated usually in the same destination country/area, and dispatch them as one consignment. The ship owner will issue a group age ill of lading, whilst the forwarding agent, who cannot hand to his principals the ship owners bill of lading, will issue to the individual shippers a certificate of shipment sometimes called “house bills of lading”

2.5 Transshipment Bill Of Lading This type is issued usually by shipping companies when there is no direct service between two ports, but when the ship- owner is prepared to transship the cargo at an intermediate port at his expense.

2.6 Clean Bill Of Lading 14/09/15 Each bill of lading states “in apparent good order and condition”, which of course refers to the cargo. If this statement is not modified by the ship-owner, the bill of lading is regarded as “clean” or “unclaused”. By issuing clean bills of lading the shipowner admits his full liability of the cargo described in the bill under the law and his contract. This type is much favored by banks for financial settlement purposes.

2.7 Claused Bill Of Lading If the ship-owner does not agree with any of the statements made in the bill of lading he will add a clause to this effect, thereby causing the bill of lading to be termed as “unclean”, “foul”, or “claused”. There are many recurring types of such clauses including: inadequate packaging; “unprotected machinery”; “second-hand cases”; “wet or stained cartons”; “damaged crates:; “two cartons missing”; etc. The clause “shipped on deck at owner’s risk” may thus be considered to be a clause under this heading.

3. Electronic Bills Of Lading The proliferation in e-commerce has brought deep impact on international trade and is consequently affecting bill of lading. Recently criticisms of BOLs are that they are time consuming, cost averse and open to fraud. As a solution to this, the need for transmitting data for bills of lading via electronic communication has been raised. The concept of electronic bills of lading has been welcomed by parties involved in the urgent and desirable application in electronic commerce.

E-BOLs Continue... The replication of functions of paper based bill of lading by the electronic bill of lading has generated series of controversy among shippers and carriers from high income/high tech countries and low income/low tech countries. Due to the nature of the traditional functions of paper bill of lading being capable of recognized as receipt for goods, evidence of contract of carriage and documents of title, proponents of paper bills have questioned the capability of electronic bills to actually replicate these functions.

E-BOLs Continue... There are several impediments concerning the introduction of electronic systems. There are various events that contributed to the loss of credibility of the paper based BoL. The most important are the swift progressions made in respect of technology coupled with the introduction of containerized shipping. In the event of cargo or container vessels hundreds of BOLs can be issued, the paper trail that is generated using the paper based bill is very costly. The volume of paper documentation makes the process of transferring cargo title very slow.

E-BOLs Continue... The general view that a document of title has to be a paper and is only transferable if an original signature in handwriting has been made, is a clear obstacle. That legislation is still not prepared to meet new standards, base on technology, on the market makes the implementation even more problematic.