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  • Bills of lading and Waybills

     
     

    A bill of lading is firstly a receipt: the carrier acknowledges that the goods have been received for carriage. But it is also evidence of the contract of carriage. The contract commences at the time the freight space is booked. The subsequent issue of the bill of lading confirms this and provides evidence of the contract, even though it is signed by only one party: the carrier or its agents.

    A bill of lading is also a transferable document of title. Goods can be delivered by handing over a bill of lading provided the shipment was consigned 'to order' and all the subsequent endorsements are in order. (See 04, Contracts.)

    If a bill of lading is lost, or does not arrive in time for the receiver to take delivery, for example when transit times are short, then the carrier will usually be able to assist by delivering the goods against receipt of a guarantee. The guarantee safeguards the carrier in case the claimant is not the rightful owner of the goods. Wrongful delivery would constitute a breach of contract and the carrier will therefore insist on a letter of indemnity (LOI) from the receiver backed by a bank guarantee whose wording meets the carrier's specifications, usually for an amount of 150% to 200% of the actual CIF value of the goods, valid for one to two years. Although there is no express time limit beyond which the holder of a bill of lading can no longer claim the goods, a guarantee good for one or possibly two years should adequately cover the carrier's obligations.

    However, carriers are not obliged to deliver goods against guarantees. That decision is entirely at their discretion and the receiver may have to negotiate the terms with the carrier, who may wish to consult the original shipper. Note that ECF contracts clearly state that buyers are under no obligation to take delivery under their guarantee and if 28 calendar days after arrival the bill of lading is not available then the buyer may declare the seller to be in default. The remedy here would be for the exporter to provide the guarantee instead. GCA does not specifically refer to missing documents and leaves settlement of any unresolved claim or dispute in this regard entirely to arbitration.

    Different types of bills of lading

    The carrier's responsibility commences on the physical acceptance of the goods for carriage.

    If this occurs at an inland point a combined transport bill of lading will be issued. If the handover is in a port then a port-to-port bill of lading will be issued.

    The term 'through bill of lading' should not be used, as it means that the issuing carrier acts as principal only during the carriage on its own vessel(s) and acts as an agent at all other times. This implies that the responsibilities and liabilities may be spread over more than one carrier under different (possibly unknown) conditions at different stages of the transport chain.

    Under a combined transport bill of lading the carrier accepts responsibility, subject to the normal stipulations in the bill of lading, for the whole carriage, inland and marine: from door to door, or from door to container yard or container station. The carrier arranges both the marine and the inland transport, but it should be noted that marine and overland transport are governed by different international conventions. This can have an effect on the settlement of claims - the financial liability of the carrier for inland carriage is not necessarily the same as it is for the marine voyage (on board ship, i.e. 'from tackle to tackle'). Usually the carrier will assist in any claims procedure initiated by the receiver and/or insurance company, but will not necessarily accept responsibility for settlement if the damage occurred during the overland stage. For example, a truck is stopped at gunpoint and the driver is asked to 'disappear': no liability. Or an accident occurs because of driver negligence: liability may exist depending on local jurisprudence.

    Obviously, large receivers will find it easier to solve such matters than will smaller companies. Note that for contracts 'free on truck' it is the buyer's responsibility to lodge the necessary claims under their insurance policy, and insurance cover should therefore commence at the inland point of loading.

    Whether a bill of lading is of port-to-port or combined transport depends on whether the box 'place of receipt' (or 'place of delivery') has been filled in.

    Waybills

    Like a bill of lading a waybill is a receipt and evidence of a contract of carriage. But a waybill is not a document of title. Unlike bills of lading, waybills cannot be issued 'to order' and they cannot be endorsed. The advantage of a waybill is that there is no need to transmit paper documentation to the point of destination to secure delivery because delivery is made, automatically and only, to the named consignee. Waybills can be used when payment does not depend on the submission of documents, for example because the shipment is between associated companies or because payment has been made in advance. Thus waybills can facilitate paperless transactions. (See 06, E-commerce and supply chain management.)

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