What is switch bill of lading and function of this BL?
“Switch” bills of lading are a second set of bills of lading issued by the carrier (or by the carrier’s agent) in substitution for the set issued at the time of shipment. The agent who is asked to produce the second set is often not at the load port. The holder of the bills may decide, for one reason or another, that the first set of bills is unsuitable, and the carrier is put under commercial pressure to issue switch bills to satisfy his new requirements. Some of these reasons are: • The original bill names a discharge port which is subsequently changed (perhaps because the goods have been resold);
• A seller of the goods in a chain of contracts does not wish the name of the original shipper to be known;
• The goods were shipped originally in small parcels, and the buyer requires one bill of lading covering all of the parcels to facilitate his on-sale.
The perils of having two sets of bills of lading in circulation for the same cargo are obvious and shipagents must make sure they follow these rules:
• The principal’s written authority should be obtained to issue switch bills;
• They should only be issued if the first complete set has been surrendered;
• They should not contain misrepresentations, eg as to the true port of loading, or the condition of the cargo. If switch bills contain misrepresentations, the carrier/agent will be at risk of claims from parties who have suffered a loss because of such misrepresentations.
In practice “switch” bills of lading are often issued in addition to, and not against surrender of, the first set. The reasons for this practice are various; the first set of bills may be held up in the country of shipment, or the
ship may arrive at the discharge port in advance of the first set of bills. Another reason, however, is that the party trading the goods wants to assist his cash flow by receiving
payment from the end receiver before he pays the shipper. The shipagent may be instructed by his principal to issue a second set of bills of lading and may be offered a letter of indemnity by the principal, or by the party who receives the “switch” bills.
Shipagents have found themselves on the receiving end of claims from the holders of the first set of bills of lading (eg the shipper, a bank or a party to whom the bills of lading have been negotiated) with nothing to rely on but a worthless indemnity. A long established or multinational shipagent may make a more worthwhile target for the bill of lading holder than a charterer with no assets or a shipowner who has sold the
ship in question, or a trader who has become bankrupt.
To protect himself or herself the agent must:
• Ask whether the principal authorising the issuance of the second set is reliable;
• Obtain the principal’s authority in
writing, and a letter of indemnity signed by the principal (and countersigned by a bank if deemed necessary by the agent) indemnifying the agent for all consequences of issuing the second set of bills of lading.
The agent should also consider whether it is necessary to obtain authority from any other party who might be adversely affected by his action (eg the shipowner or the shipper). If the agent is authorised by the charterer, but issues bills of lading on behalf of the master, the shipowner would have a valid claim against him if he has acted without the owner’s prior knowledge and consent.
If the principal has asked the agent to obtain a letter of indemnity from the party receiving the second set of bills of lading, the agent should get the wording and security (eg counter-signature by a bank or not) approved in
writing by the principal. The agent should keep the indemnity in a safe place and make reasonable efforts to obtain the first set of bills.
 |
 |
 |
 |
VFC Ads Keyword Giao nhận - Vận tải
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
VFC Ads Keyword Ngoại thương
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
VFC Ads Keyword Tài liệu tham khảo
|
|
|
 |
 |
 |
 |