Bill of lading -II

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 Switch Bill of lading
• A “Switch” bill of lading is NOT another type of Bill of Lading..
 A Switch Bill of Lading is simply the second set of bill of lading that may
be issued by the carrier “in exchange of” or “substituting” the first set of
bill of lading

• Where can a bill of lading be switched and who can request shipping line
to issue switch bill of lading..?
 A bill of lading may be switched anywhere around the world for shipments
from anywhere to anywhere..
 For example in a shipment from New York to Antwerp, the bill of lading
may be switched in London as long as the specific shipping line has
offices in London..
 Usually a switch bill of lading happens in a location that may not be on the
route of the cargo..

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 Switch Bill of lading
• Why do customers(Shippers) require a Switch bill of
lading..??
 When there has been a change in the original trading
conditions ;
 Goods have been resold (probably high-seas sale) and the
discharge port has now changed to another port ;
 The seller (who could be an agent) does not wish the name of
the actual exporter to be known to the consignee in case the
consignee tries to strike a deal with the exporter directly ;
 The seller does not want to know the buyer to know the actual
country of origin of the cargo …
 So seller requests that the port of loading be shown as some
port other than the one the cargo was loaded from..
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 Switch Bill of lading
• What can and cannot be changed in a Switch Bill of Lading..??
• The only safe area that can be allowed to be changed in the switch
bill of lading is the shipper, consignee, notify information which is
usually displayed in Part 1 of the bill of lading.
• The below details should never be allowed to be changed
• Place and date of shipment as changing this could affect the terms of
delivery based on the sales contract
• Details of cargo including the number of packages, dimensions, weight and
measurement
• Hazardous cargo information if any (remember cargo is already on board
based on original hazardous cargo declaration)
• Reefer cargo information such as temperature setting, humidity settings etc
(remember cargo is already on board based on original cargo declaration)
• OOG Cargo information if any (remember cargo is already on board based
on original OOG details declared including lost slots calculation etc)
• none of the original clauses on the bill of lading should never ….
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 Switch Bill of lading (Original clause of Bill of lading)
• Standard/Normal Clauses that appear on a bill of lading can’t be
changed (For eg.)
• Shippers Load, Stow and Count (SLAC) – Shipping line is saying that the
shipper has loaded, stowed and counted the contents.
• Said to Contain or STC – Shipping line is saying that based on the shippers
declaration, the container is said to contain XYZ cargo and they haven’t
verified the contents..
• Shipped on Board – Shipping line is confirming that the container has been
loaded on board the ship mentioned in the bill of lading
• Received for Shipment – Shipping line is confirming that the container has
been received by them under their control for shipment on a nominated
vessel
• Freight Prepaid – Shipping line is certifying that the freight for the carriage
of the cargo has been paid at the origin port
• Freight Collect – Shipping line is certifying that the freight for the carriage
of the cargo has to be paid at the destination port
• Freight Payable at XXXXXXX – Shipping line is certifying that the freight
for the carriage of the cargo has to be
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 Switch Bill of lading
• In order to protect themselves from any possible claims arising out of
issuing switch bills of lading, the shipping line/agent have to ensure that
1. They are covered by their insurance for the issuance of such switch bills of
lading and they provide their insurance company with the exact reason for
the issuance of the switch bill of lading ;
2. They need to ensure that the bill of lading is switched before hand over of
cargo and also that the person or entity requesting for the switch bill is
authorized to make the request..
3. If a negotiable bill is issued, generally the shipper on the bill of lading has
the right to request for the switch bill of lading, but only before the
endorsement to the next party or delivery of the goods ;
4. All issued originals from the first set of bills must be returned to the carrier,
and cancelled before the bill is switched and a second set is issued..
5. Point 4 is perhaps the most important point for the carrier to note and ensure
as this is the only way to guarantee that there are no other originals floating
around for the same shipment.. The dangers of two sets of original bills in
circulation for the same cargo are many ;
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 Switch Bill of lading
• In order to protect themselves from any possible claims arising out of issuing
switch bills of lading, the shipping line/agent have to ensure that…….
 This is also required to ensure that the party making the request is truly the
owner of the cargo;
 A shipping agent should never issue a switch bill of lading of their own wish
based on the request of the customer and must always issue it only with the
written authority of the principal (however urgent the situation may be to the
customer) ;
 The switched set should not contain any information different to that of the
first set of bill of lading, (like an incorrect port of loading, or change in the
condition and quantity of the cargo)..
 If switch bills contain any misrepresentations, the carrier/agent will be at risk
of claims from parties who have suffered a loss because of such
misrepresentations ;
 If the agent has been asked by the principal to issue the switch bill of lading
based on an indemnity from the customer(Shipper), the agent should ensure
to get the wording format from the principal and get the completed
indemnity approved by the principal before issuing the switch bill of lading..
 Otherwise the issuance of switch bill 7 of lading is illegal
 Difference between Ocean, Sea Waybill and Memo BL
• Ocean Bill of Lading is a B/L issued by the carrier to their customer
(shipper) after the payment of all charges and submission of all
customs/port documents relevant to that country.
• An Ocean Bill of Lading is a Negotiable document which serves also as
an Evidence of Contract of Carriage, Receipt of Goods and Document
of Title. (3 originals + 6 non-negotiable copies)
1. Using an Ocean Bill of Lading, shipper has the option to consign the
shipment to either to a direct customer (in this case the bill of lading
becomes a Straight Bill of Lading and is no longer Negotiable although
it still retains the other two characteristics of a Receipt of Goods and
Evidence of Contract of Carriage) or
2. To Order of a customer(Consignee)
3. To Order of a Bank
4. To Order of Shipper (To Order)
• This bill of lading when consigned to either of the last three
mentioned parties, allows the goods to be endorsed to another party in
case the original buyer decides to resell the cargo..
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 Difference between Ocean, Sea Waybill and Memo BL….
• A Sea Waybill of Lading is NOT a Negotiable document as there is NO
ORIGINAL ISSUED.. It is also NOT a Document of Title.
• This document is more relevant for non-commercial transactions, inter
company sale or where there is no involvement of any documentary
credits.
• A Sea Waybill of Lading CANNOT BE CONSIGNED ‘TO ORDER’ of
someone else.
• It has to be consigned to a direct customer only. Delivery of cargo covered
under a Sea Waybill of Lading can be made ONLY to the consignee on the
bill of lading or his authorized representative.
• A Sea Waybill of Lading (Express Release)is usually issued :
• when the shipper and consignee are part of the same business group and
there are no negotiations required between the two either directly or via
bank for release of the cargo
• the shipment doesn’t involve any bank and the shipper doesn’t really need
to submit original bill of lading to secure his payment
• Memo Bill of lading (without freight value , only a receipt)
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 Difference between HBL and MBL
1. A House Bill of Lading (HBL) is issued by an NVOCC operator, or a
Freight Forwarder to their customers..
2. A Master Bill of Lading (MBL) is issued by the Shipping Line (Carrier)
to the NVOCC Operator, or Freight Forwarder..
 In the HBL
 the Shipper will usually be the actual shipper/exporter of the cargo (or as
dictated by the L/C)
 the Consignee will usually be the actual receiver/importer of the cargo (or
as dictated by the L/C)
 the Notify could be the same as Consignee (or any other party as dictated
by the L/C)
 In the MBL
 the Shipper will usually be the NVOCC operator, or their agent or the
Freight Forwarder..
 the Consignee will usually be the destination agent or counterpart or
office of the NVOCC operator, or the Freight Forwarder
 the Notify could be the same as Consignee
10 or any other party..
 Bill of lading
• Who should endorse a bill of lading for cargo release..?
• For the release of cargo at destination and for the purpose of
documentary credit negotiations, there are several
endorsements required on a bill of lading..
• Whether it is HBL or MBL, it must be understood that a bill of
lading has to be consigned properly in order that the cargo is
released to the correct party..

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Bill of Lading consigned to
• AWho should endorse
Company/Individual Name a bill of lading for cargo
To Order or To Order of ZYX
To Order of Bank
Endorsements Required on the bill of
Bill of lading
lading
When release..?
consigned to a named
consignee, the bill of lading is known
as a Straight Bill of Lading, and in the
case of a Straight Bill of lading, the
release maybe given only to the
named consignee and this bill of
lading is not negotiable or
transferable..
Shipper’s endorsement stating
DELIVER TO THE ORDER OF “ZYX
Client” and ZYX’s company stamp and
sign in case he is taking the final
delivery or his endorsement stating,
DELIVER TO THE ORDER OF “ABC
Client” (if the cargo has been further
sold)….
Shipper’s endorsement stating DELIVER TO
THE ORDER OF “XYZ BANK” and banks’
endorsement stating, DELIVER TO THE
ORDER OF “ZYX Client” and ZYX’s
company stamp and sign in case he is
taking the final delivery or his endorsement
stating, DELIVER TO THE ORDER OF “ABC
12 Client” (if the cargo has been further sold)..
 Bill of lading
• Who should endorse a bill of lading for cargo release and how should a
HBL and MBL be consigned..?
• When there is an involvement of HBL, the MBL can only be a Sea Waybill
or a Straight Bill and will invariably be consigned as below
• Shipper will be : Freight Forwarder or NVOCC
• Consignee will be : The agent of the freight forwarder or NVOCC.. But
this could vary from country to country as some countries need the actual
consignee information on the MBL
• Notify will be : The agent of the freight forwarder or NVOCC
• Since a Sea Waybill is neither negotiable nor transferable, there is no need
need for any endorsements on the MBL and cargo will be released to the
consignee..
• If the HBL is used as the transport document, then the HBL should follow
the endorsements as shown above..

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 Notify party inBill of lading
• Who is a notify party in a shipment and what is their role..?
• The details of the notify party are provided in the shipping instruction
submitted to the shipping line. There may or may not be a relationship
between consignee and notify party or shipper and notify party..
• Instances of who can be shown as Notify Party on a bill of lading could be :
• Actual receiver of the cargo may be shown as the notify party in instances where a
bill of lading is consigned To Order, so that they are aware when the shipment is
expected to arrive at destination..
• Agent of the consignee who could be either a Freight Forwarder or a Clearing Agent
who is nominated by the receiver of the cargo to arrange for the receiving, clearance
and delivery of the cargo..
• Trader or indenting agent that brokered the deal/shipment and who would like to
keep a track of the shipment..
• Any other entity that has an interest in knowing the arrival and delivery of the
shipment and may have a direct or indirect interest in the system..
• The main responsibility of a Notify Party is to receive the Arrival Notification from
the shipping line and take further steps such as arranging a customs clearance agent
to do the clearance with customs.
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 Manifest
• A manifest is one of the key documents in the process of shipping.A manifest
lists all bills of lading issued for cargo loaded on a specific ship.
• A manifest lists the details of the cargo, the shipper, consignee, weight,
measurement, packing..
• There are different types of manifests:
• Cargo Manifest – lists all information relating to the cargo excluding the freight
charges..
• Freight Manifest – lists all information relating to the cargo including the freight
charges.. All charges as indicated in the manifest are either to be paid by the
shipper or consignee..
• Dangerous Cargo Manifest – a manifest that details the dangerous/hazardous
cargoes on board the ship covering the Class, UN No., Description of Goods,
EMS/MFAG etc..
• Out of Gauge Manifest – a manifest that details the out of gauge (abnormal sized)
cargoes on board the ship including the out of gauge details of the cargo
• Reefer Manifest – a manifest that details the reefer cargoes on board the ship
including the temperature settings, humidity, which containers require monitoring
on board – like cold treatment containers.

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 How to calculate CBM and Freight Ton
• Firstly CBM stands for CuBic Meter.. This is the most common unit used for the
measurement of volumetric cargo.
• Metric Tons as you know refers to the weight of cargo (1 Metric Ton = 1000
Kilograms)..
• Freight Ton or Revenue Ton is derived by calculating the weight or volume of the
cargo and the freight is charged based on whichever is higher..
• When you have the dimensions of the package, first of all convert the measurement
into meters.. Normally dimensions are in Length x Width x Height..
• If for example the dimensions of a cargo crate is
• 3.2 x 1.2 x 2.2 meters then the CBM is simply 3.2 x 1.2 x 2.2 = 8.448 CBM.
• As mentioned above, if the rate is quoted as for example USD 12/per freight ton
and the weight of the package is 1200 kgs = 1.2 tons, then the freight rate for this
will be
• 8.448 cbm x USD.12 = USD 101.376 or
• 1.2 tons x USD.12 = USD.14.4
• Since the CBM rate is higher, the freight rate of USD.101.376 will apply.

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 Difference between Detention and Demurrage
• Demurrage relates to cargo (while the cargo is in the container)
• Detention relates to equipment (while the container is empty after
unpacking or before packing)
• Imports
• Exports

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