NEWS\\\ Insurance

Lost the bill of lading? Don’t panic!

Such is the crucial nature of the bill of lading that some may unduly worry over its loss or misplacement. Peregrine Storrs-Fox of the international transport and logistics insurer, TT Club explains how to meet the challenge.

The bill of lading (BoL) has three primary functions: evidencing the contract of carriage, acting as a receipt for the cargo and facilitating transfer of title to the carried cargo. There are occasions when documents are lost and, given the functions of the BoL, it can give lead to signifi cant exposure if handled incorrectly. Contracts can be complex, so

take care in dealing with lost BoLs. In maritime trade, the original BoL eff ectively represents the cargo itself. At its simplest, the shipper receives the bill from the carrier, and transfers it to the consignee in return for payment for the goods. ‘Negotiable’ bills may be transferred between entities for payment, together with the right to receive the goods, while the goods are in transit. The consignee or transferee hands the BoL to the carrier as evidence of the right to collect the goods and for cancellation. Equally, a bank may also

have an interest in the cargo, under a letter of credit, holding the original BoL until the debt is satisfi ed. In this context, the BoL represents the bank’s security for that debt. This is why care is needed;

release of goods without an original BoL can lead to fi nancial liabilities to entities other than the direct contracting parties. Shippers or alleged transferees

of the original BoL may seek to press the NVOCC to issue a duplicate for the purpose of taking delivery; such requests must be handled with real care. Anybody holding an original BoL acquired in good faith can claim delivery; where two sets of bills exist there is risk of two entities with apparently equally valid claims. Additionally, if the shipper has not been paid he retains the right to dispose of the cargo. As the NVOCC or freight

forwarder, you can never be 100% certain what has happened to the original bills: genuinely lost or has someone overlooked paying the seller? In releasing cargo without fi rm evidence of

the right to take delivery, you act entirely at your peril. As a matter of law, there is

no exception to the simple working

rule that delivery

without production of a BoL is at the NVOCC’s own risk. You are not bound to deliver cargo to any person other than the lawful holder of the original bill, unless a court so orders. Where a bill is absent and the importer is demanding delivery, a recommended solution is to require a bank guarantee (or a company letter of indemnity countersigned by a bank). It is always sensible, and

practical, to check with the exporter/shipper to ensure it has been paid and has no objection to the cargo being released. One vital step - oſt en

overlooked - is to communicate to the delivery agent any new arrangement for the release of the cargo, precluding the risk that the agent meanwhile delivers the cargo to a party in possession of the void or cancelled BoL. Alternatively, the cargo

interests may apply for a court order, oſt en known as ’interpleader’. However, this inevitably takes longer and increases costs, including potential storage charges; ultimately a claimant will still be required to demonstrate entitlement to take delivery. If there is a request for delivery

but the original BoL is unavailable for whatever reason, take utmost care. Implement appropriate training and escalation procedures to ensure any approval for irregular release is authorised by a senior manager. The whole question of the

delivery of cargo without production of the corresponding original BoL, whether lost or otherwise, is fraught with peril for the NVOCC or other issuer. No matter how strong or important your commercial relationship may be, simply do not accept promises or bow to pressure. The law (and TT Club) will support you if you refuse to deliver until a valid BoL has been surrendered.

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Issue 2 2019 - Freight Business Journal

BIFA warns on abandoned boxes 13

BIFA is warning its members that they could be liable for the cost of containers abandoned overseas and is urging them to implement safeguards. It says that one of the most

frequent questions it receives regarding problems on maritime shipments is about abandoned and unclaimed containers sitting

in overseas ports. The trade association says that oſt en its member company has closed the fi le with the goods shipped and the carriage paid, and is then surprised to receive a demand for storage and quay charges from the line. BIFA says that arguing that a

forwarder is only an agent, or that its name is not on the bill of lading

may not hold water. I n law it is

not what you say you are, but what you do that defi nes the role you perform. BIFA director general, Robert

Keen explains: “Although some BIFA members may act as an agent from time to time, the majority of transactions that occur are where a freight forwarder buys space

from a shipping line or airline and sells from its own tariff . In this scenario, the freight forwarder is a principal. If there is a problem later, for example, if the goods are not collected at the destination, then the shipping line will look to the freight forwarder for quay rent, for example, as the party it contracted with.”


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