The bill of lading (B/L) remains a vital part of shipping goods by sea, as highlighted by the Britannia P&I Club in a recent article, explaining the importance of completing and handling the B/L correctly in order to reduce the carrier’s risk of liability for cargo-related claims.
A bill of lading is a contract issued by a carrier (shipping line), or by the agent, to the owner of the goods shipped, to acknowledge receipt of cargo for shipment. Nowadays, paperless trading systems and the introduction of the electronic bill of lading (e-B/L) are revolutionizing global shipping by improving efficiency, reducing costs, and enhancing security. As such, the use of e-B/L’s through paperless trading systems continues to grow. There are advantages to the use of e-B/L’s, such as the improved speed of transfer or the apparent improvement in security.
Any clauses in relation to the condition of the goods should be added to the B/L before signature, otherwise goods that match the description should be supplied.
The bill of lading is an important document. There are various situations when a shipowner cavomissions when producing and handling bills of lading. Providing clear guidelines to ships masters, can help to reduce problems.
Key points to check according to the Club are the following:
- Check that the B/L incorporates the Hague or Hague-Visby rules, usually in the form of a clause paramount
- Do not sign a B/L if blank or only partially completed. The exception to this is when an Early Departure Procedure has been agreed with the charterer or shipper
- Confirm the correct port and date of loading is shown
- Any carriage instructions inserted should be checked against other documents (mate’s receipts, voyage instructions, shipping order). If in doubt, the master should clarify them with the shipper and the shipowner
- Check the B/L is on the form stipulated by the charterparty or the ordinary form for the trade
- Check that the terms of the applicable CP are incorporated in the B/L and the CP incorporation clause is inserted as applicable
- Avoid general wording (e.g “other conditions as per CP” or “CP terms and conditions incorporated therein”) and to ensure proper incorporation, the following wording should be included: “all terms, clauses, conditions and warranties including the arbitration, choice of law, time bar and time limitation clauses of the CP dated …. are hereby incorporated in this BL”
- Do not amend a set of B/Ls after they have been issued
- Do not re-issue a set of B/L’s if an earlier set is already issued. Before doing this confirm that the original set of B/Ls has been cancelled or destroyed
- Confirm the stated number of original B/Ls match the number of bills presented for signature
- Sign only in the designated signature space or, if none, at the bottom of the B/L face and NOT elsewhere (signing next to the shipper’s description may be interpreted as confirming the description).
- Retain a copy of the signed B/L marked/stamped “non negotiable copy” for comparison with the original B/L presented for delivery
- Do not accept deck cargo, unless the B/L is clearly marked as ‘CARRIED ON DECK AT SHIPPERS RISK’ or similar
- Do not discharge goods without presentation of an original B/L. This should only be done upon receiving an acceptable LOI from the receiver
- Seek clarification when instructed to discharge at a different port from that printed on the B/L.