Types of Letter Of Credit

Bill of Lading – Precautionary Points

Following points must be noted prior to issuing a B/L

1)Use the correct stationery: First and foremost you need to check that the bill of lading that you are about to issue is the right B/L stationery.

2)Verify the address details – While the details on the B/L are submitted by the customer, it is of paramount importance that the carrier also verify the details shown on the B/L.

3)Verify the cargo particulars – The cargo particulars of the shipment should also be verified and matched with the details given at the time of booking, before the B/L is signed.

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Note:   For special cargo such as reefers, hazardous, out of gauge cargo   the B/L should reflect details such as carrying temperature, dimensions   of the out of gauge, hazardous class and UN Nos.
.  4)Ensure cargo is received for shipment or shipped on board: Always check that the correct vessel information and clause is reflected on the B/L.

Note:   a)In cases where the shipper is requesting the B/L to be claused   Received for Shipment the carrier should have received the   container(s) under their custody before the B/L is issued.

  b)In cases where the shipper is requesting the B/L to be claused   Shipped on Board, the container(s) should have been definitely   loaded on board the ship before the B/L is issued.

5)Check the protective clauses: Protective clauses such as “shipper’s load, stow and count” , “said to contain” etc. are generally pre-printed in the stationery but it would be good to check.

6)Check the protective clauses: Protective clauses such as “shipper’s load, stow and count” , “said to contain” etc. are generally pre-printed in the stationery but it would be good to check.

Note:   a) These protective clauses safeguard the carrier’s interest in case of any   misdeclaration by the customer including any misdeclaration of weights   which has been the bane of many carrier’s existence.

  b)The IMO has amended the SOLAS convention which mandates the   declaration of the Verified Gross Mass (VGM) of a packed container   before loading on board vessels within a prescribed cut-off date / time   to the shipping line.

  c)Any bill of lading signed with the knowledge of facts that are   misrepresented may be considered to be a fraudulent document and may   result in legal consequences for the signatory.

7)Non-inclusion of commercial terms : Commercial terms relating to the sales contract etc. does not form part of the B/L and ideally should not be included in the B/L.

Note: a)Commercial information includes Cargo Value, Incoterms, Letter of   Credit details etc. This commercial information does not form part of   their contract of carriage and therefore it has no place on the B/L.

            b)If the B/L states a cargo value, it becomes an Ad Valorem (estimated   value of the goods or transaction concerned )B/L.

            c)  If the customers insist on the value on the B/L, then carriers   may choose to inform their liability Insurers of the requirement. The   Insurers in turn may accept to cover any eventuality of issuing an Ad   Valorem B/L in exchange for a sometimes hefty extra premium. If the   customer is willing to pay this extra cost, then the carrier may issue an   Ad Valorem B/L.

8)Bills of lading originals must be issued in the right numbers and marked appropriately:  When bills of lading are issued in originals and copies, due care must be taken to issue the right numbers

Note: a) 3 Originals and 6 Copies seems to be the general norm when negotiable   B/L are issued.

           b)  Due care must also be taken to ensure that all B/L issued are identical   and printed at the same time. Originals and Non-negotiable bills must   be stamped as ‘Original’ and ’Non-Negotiable’ if there are no pre-  printed markings on the B/L stationery to this effect.

9)Ensure monies have been received: Always ensure that all monies due have been collected before you sign the B/L.

Note:   Apart from the above main points, there might be also some points   specific to each company/carrier that needs to be followed  as the   signatory of the B/L for container shipments.