2. RISK ASSOCIATED
WITH
BILL OF LADING
04
TABLE OF CONTENTS
CLASSIFICATION
02
MAIN
CONTENT
03 05
01
a. MBL & HBL
b. Straight B/L
a. By receiver
b. By notes on B/L
c. By subject issuing B/L
d. Other classifications
a. Case study
b. Recommendations
a. Definition
b. Function
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CASE STUDY
WHAT IS THE
OCEAN BILL OF LADING
4. a.
DEFINITION
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BILL OF LADING is
● A document issued by a carrier to a shipper
(exporter/seller/consignor);
● Signed by the captain, agent, or owner of a vessel;
● Furnishing written evidence regarding receipt of
the goods (cargo), the conditions on which
transportation is made (contract of carriage), and
the engagement to deliver goods at the
prescribed port of destination to the lawful
holder of the bill of lading.
_Hinkelman, Edward G., 2008
5. b.
FUNCTION
1. It is A RECEIPT FOR THE GOODS from the
carrier, indicating any damage to the goods that
was visible or apparent at the time of loading.
2. It is THE CONTRACT OF CARRIAGE between
the shipper and the carrier (i.e., a transport
document).
3. It is THE DOCUMENT OF TITLE to the goods
described in it.
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8. STRAIGHT
B/L
A.
By receiver
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When the cargo is intended to be delivered to the consignee only.
Only the named consignee can collect the cargo.
Straight B/L is a non-negotiable bill and
is not beneficial to use with COLLECTION and L/C mode of payment.
9. TO ORDER
B/L
A.
By receiver
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The bill of lading has been consigned to order of the shipper.
The shipper indicated determines who should collect the goods at the port
of discharge by surrendering at least one original copy to the carrier.
12. A bill of lading issued by a carrier
declaring that the goods have been
received in an appropriate
condition,
without the presence of defects.
A bill of lading indicating some
damage to, or loss of the goods.
It is also called a claused bill of lading.
Notes:
In practice, a clean B/L will be essential
for the sales contract and must be
issued to fulfill the requirements stated
in letters of credit.
Most banks refuse to accept any
unclean bills of lading.
CLEAN B/L UNCLEAN B/L
B. By notes on B/L
13. Issued by the CARRIER (ship owner or
operator) and represents the
contract of carriage between the
shipper and the carrier.
The cargo shipper will only receive a
Master Bill of Lading if they are
working directly with a mainline
carrier or a freight forwarder.
Issued by a NON-VESSEL OPERATING
COMMON CARRIER (NVOCC) or a
FREIGHT FORWARDER to the supplier
post receiving the cargo and inspecting it.
The supplier delivers the shipment to the
freight forwarder, who inspects the cargo
and delivers it to the consignee.
MASTER B/L HOUSE B/L
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C. By subject issuing B/L
14. By negotiability
Negotiable B/L
Non-negotiable B/L
By Shipment on board
Received for shipment B/L
Shipped on board B/L
Direct B/L
Through B/L
OTHER
CLASSIFICATIONS
By transport process
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15. By the legality of the
goods transported
Original B/L
Copy B/L
OTHER
CLASSIFICATIONS
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Switch B/L
17. The shipper is usually either the freight forwarder
or the factory, is responsible for the customs
documents in the origin country.
The consignee can either be the actual owner of
the cargo or a trading company, whoever is
responsible for the import license.
The notifying party will be notified upon the
arrival of the goods. This can be the same as the
consignee or a different party, usually the buyer or
the receiving party.
18. The importer will contact this agent to
present the B/l, get the delivery order (D/O),
pay the cost and freight (if any).
19.
20.
21. THE BACK OF
BILL OF LADING
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• The back often includes content such as:
– Definitions, general terms
– Terms of liability of the carrier
– Terms of loading and unloading and
delivery
– Terms of charges and surcharges
– Terms limiting the liability of the carrier
– Terms of Disclaimer of the carrier, etc.
23. A. MBL & HBL
HOUSE
BILL OF LADING
House B/L has no payment
value and ownership of the
goods
➞ The shipper CAN NOT bring
House Bill to dispute with the
Shipping Line
The House Bill has no legality
➞ Court is useless
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24. The use of the House B/L should be approved by Consignee and
Shipper as well as the Forwarder company.
The legality and safety of MBL are HIGHER than that of HBL
because the Shipping Line will be more likely to guarantee
compensation if there is risk compared to the Forwarder.
When using HBL, there must be mutual trust between the Forwarder
and the Shipper.
Customers should choose to use the services of reputable Forwarder
companies with stable financial capacity and names in the logistics
field.
25. FIRSTLY
The original bill of lading is not required to be presented by the
Buyer or the Carrier to get the goods.
➞ Risks for the payment under the letter of credit and cash
against documents payment methods.
B. STRAIGHT BILL OF LADING
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26. SECONDLY
Issuing banks may be left vulnerable to various fraud risks, especially under a
letter of credit payments.
➞ Issuing banks can lose control of the goods by using this Bill of Lading.
B. STRAIGHT BILL OF LADING
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27. When to use Straight Bill of Lading?
A Straight Bill of Lading is commonly
used to ship to customers for goods
already being paid for.
32. SITUATIONS
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COMPANY A COMPANY B
A has obligations to deliver
goods on board the vessel
at Hai Phong port.
B makes payment through L/C
B/L must be the To Order B/L by bank K.
BANK K
33. SITUATIONS – TO DO THE DELIVERY
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COMPANY B FREIGHT FORWARDER
SAO
CARRIAGE
CONTRACT
34. SITUATIONS – TO DO THE DELIVERY
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SAO SHIPPING LINE
SAO will be in charge to ship the goods onto AH
➞ Make payment and receive Master B/L
35. SITUATIONS – TO DO THE DELIVERY
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SAO COMPANY A
HOUSE BILL OF LADING
A – Real Shipper
SAO – Contracting Carrier
AH – Real Carrier
36. SITUATIONS
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SAO
COMPANY A
COMPANY B
SURRENDERED B/L (Straight B/L)
Mentioning Consignee & Notify Party: Company B’s agent
at the destination port.
TO ORDER B/L
The goods arriving at the destination will be delivered to the
consignee that bank K ordered exactly as the L/C.
Stated “SAO is Agent for Shipping Lines AH”
37. SITUATIONS
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COMPANY A
Seller (A) did NOT know the above details about the
Master B/L as OPPOSED to the content of the House B/L.
AFTER THE EXPIRY OF L/C:
- A has NOT received the money from B
- The goods on board AH have been TAKEN
- The To Order B/L still in Bank K.
38. SITUATIONS
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COMPANY A
AH does NOT have any Agency in Vietnam
➞ SAO does not have the basis to sign a B/L with
the words below saying
“as an Agent for Shipping Lines AH”
39. UNDER THE FOB FOR CONTAINERIZED GOOD
Should note clearly in the sales contract as well as in the L/C:
The buyer undertakes that the content and form of such additional sets of B/L
must match the B/L stated in the L/C and sales contract
in accordance with international commercial maritime practices and laws
KEY
TAKEAWAYS
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40. UNDER THE FOB FOR CONTAINERIZED GOOD
KEY
TAKEAWAYS
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When facing a similar situation, the seller can also control the shipment:
Instructing the shipping line or their agent to keep the goods in the "HOLD" state
(that is, waiting for the shipper's instructions), NOT delivered to the Consignee.
41. BEFORE SIGNING B/L
• Check the B/L sample form
Check the accuracy and legality of whether the bill of lading is the same as
the registered form, is it the latest version currently circulating, etc.
• Verify all details on the bill of lading, including location, cargo, vessel
information and terms, etc.
• Make sure the bill of lading does NOT include commercial terms,
including the Cargo Value, Incoterms, letter of credit, etc.
• The original bill of lading must be properly numbered and marked
appropriately.
RECOMMENDATIONS
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