Significance of Bill of Lading Clauses

Everyone involved in the shipping and freight industry would have come across various Bill of Lading clauses and stamps..

There are specific reasons why a Bill of Lading has clauses typed or stamped on them.. In this article we will discuss these clauses in relation to “containerized” shipments..

Standard/Normal Clauses that appear on a bill of lading and what it signifies

Significance of Bill of Lading Clauses - shipping and freight resource
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1) Shippers Load, Stow and count or SLAC – Shipping line is saying that the shipper has loaded, stowed and counted the contents.. Read my previous article  What does Shippers load, stow and count mean..?? for more info on this clause..

2) 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..

It is the shipper’s responsibility to ensure that they declare the actual and correct cargo loaded in the container..


Read my previous post Are Shippers Load Stow and Count and Said to Contain – different..?? to learn more about this clause..

However, the Said To Contain clause is considered by some authorities like Customs and Border Protection (CBP) in U.S.A as being generic in nature and is related to their concerns about terrorist threats and that weapons, bombs or other devices may be smuggled into the country under this “generic cover”..

Hence post 9/11, CBP in USA advised that they cannot accept the Said to Contain Clause..

In line with this, some shipping lines seem to have stopped showing this clause on the bill of lading..!!

What do you think about this..?? Should the “Said to Contain” clause be allowed or not..??

3) Shipped on Board – Shipping line is confirming that the container has been loaded on board the ship mentioned in the bill of lading

4) Received for Shipment – Shipping line is confirming that the container has been received by them under their control for shipment on a nominated vessel

5) Freight Prepaid – Shipping line is certifying that the freight for the carriage of the cargo has been paid at the origin port

6) Freight Collect – Shipping line is certifying that the freight for the carriage of the cargo has to be paid at the destination port

7) Freight Payable at XXXXXXX – Shipping line is certifying that the freight for the carriage of the cargo has to be paid at a specified location

 

Special Bill of Lading Clauses that are sometimes requested by customers which some carriers allow at their discretion

  1. 14 (or “x” number) demurrage or detention free days at destination – By showing this clause on the bill of lading, the carrier is confirming the demurrage or detention or combined free days at destination that is offered to the client
  2. Express Bill of Lading, no original required – By showing this clause on the bill of lading, the carrier is confirming that cargo maybe released to the consignee on the bill of lading without the requirement of an original bill of lading
  3. On-carriage to final destination on consignee’s risk, cost and responsibility – This clause is shown in some bills of lading where the Place of Delivery is some inland point, but the movement from the Port of Discharge to Place of Delivery will be done by the consignee or their nominated agent.. This is normally requested by the shipper and in such cases, the shipper and the carrier do not take any responsibility for the movement..
  4. The value of the cargo is XXXXX covered under commercial invoice YYYYY – In very special cases where dictated to by a Letter of Credit, some carriers show this clause in the body of the bill of lading as per request of the shipper

 

Clauses that are contentious and not readily allowed by the carrier(s)

1) Clean on Board – Read my previous articles “Implications of issuing a Clean on Board bill of lading” and “Clean on Board or Shipped on Board” to see why this clause is dangerous to a container shipping line..

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2) Under Deck Stowage – There maybe cases where a container may require to be kept away from the elements – either sun or water..

For example, some cargoes like bitumen, gums, natural rubber etc can experience a lot of temperature fluctuations during the course of a voyage and this fluctuation may result in the melting, softening, hardening or caking which may render the cargo useless..

This clause will be requested by the shipper and if the line has indicated on the bill of lading that the container has been stowed under deck and in reality it hasn’t been, the carrier is vulnerable to cargo claims..

3) Deck Stowage – Customers might specifically request that a container be stowed on deck as the cargo might be Out of Gauge and needs the space and clearance so as not to be crushed by other containers under deck during loading or discharging operations..

Also there are certain types of hazardous cargoes that are not allowed to be discharged at the port facility and needs to be discharged directly onto trucks and moved out of port..

To cover themselves against the Under Deck and Deck stowage clauses above, some shipping lines have a clause to the effect

“Goods, whether packed in Containers or not, may be carried on deck or under deck without notice to the Merchant unless it is specifically stipulated on the front hereof that the Containers or Goods will be carried under deck.

If carried on deck, the Carrier shall not be required to note, mark or stamp on the Bill of Lading ………………”

4) Some of the lines do not show any commercial information on the bill of lading and this has been explained in much detail in this post..

Have you come across any clauses (or lack thereof) on the bill of lading that has caused problems for your shipments..??

Article republished after some updates

*** End of Article ***

15 thoughts on “Significance of Bill of Lading Clauses”

  1. Maersk Line here in India incorporates the clause “Applicable free time 20 days Combined(Detention & Demurrage) at (port of discharge / place of delivery)” for shipments to Egypt. Requesting to assist what does the said clause proposes to explain.

    Reply
    • Hi Jagdip, this means that the line is not separating the demurrage and detention free days.. They are giving a total of 20 free days from the date of discharge of full container till empty return to their nominated empty depot.. After 20 free days the dem/det charge as per tariff will apply..

  2. I’d like you to correct information about => 3. On-carriage to final destination on consignee’s risk, cost and responsibility – This clause is shown in some bills of lading where the Place of Delivery is some inland point, but the movement from the Port of Discharge to Place of Delivery will be done by the consignee or their nominated agent..

    Movement from the Port of Discharge to Place of Delivery is still under Carrier’s responsibility. It must be on-carriage from Place of Delivery to Final Destination is on consignee’s cost and risk. It is normally showed on the face of BL ”FINAL DESTINATION (for the merchant’s reference only)”.

    And it is widely used in case the final destination is a certain point in 3rd country other than origin and destination i.e in transit cargo from Caimep or Hochiminh city in Vietnam to Phnom Penh, Cambodia; in transit cargo from Laem Chabang or Bangkok in Thailand to Laos, and from Danang in Vietnam to Laos … etc.

    Reply
    • Hi Cuong, every bill has a Place of Delivery field.. My Point 3 is about this field.. If there is some location shown in this field but consignee’s want to move it on their own (merchant haulage), shipping lines may not agree as this impacts on their liability.. For example, if the Place of Delivery is shown as Caimep, but consignee does the movement to Caimep and some damage occurs on route, it could be interpreted that this was moving under carrier’s control as the Place of Delivery is shown as Caimep..

      You may be talking about In-Transit cargo..

  3. Hey Hariesh!

    When are you writing a book on all these articles if not yet? It would be a great tool to have on one’s desk.
    Please think about it 🙂
    Thank you for another useful article.

    Reply
  4. Hello hi, I hv question . I transport 9 animals to Pakistan via sharjah port through small cargo vessel/ boat 700ton capacity & on the way drowned. On B/L wriiten shipper will not b held responsible for any shortage, loss n cargo also not insured . What is my standing in this scenario….?

    Reply
  5. In term of Freight Prepaid shipment.. If Ocean freight is NIL & in transit cargo got vanish in natural calamities or in different manner… Is the shipping company is liable to pay shipper any claim pertaining to cargo lost…

    Reply
  6. Dear Hariesh,
    Please kindly more explain to me regarding :
    “”” The value of the cargo is XXXXX covered under commercial invoice YYYYY – In very special cases where dictated to by a Letter of Credit, some carriers show this clause in the body of the bill of lading as per request of the shipper”””

    that’s mean combine payment ?
    USD XXXXX with Invoice YYYYY covered by LC and the rest by another payment method?
    How about with the Quantity, will be split as well?
    thank you
    regards,

    Reply
  7. “Also there are certain types of hazardous cargoes that are not allowed to be discharged at the port facility and needs to be discharged directly onto trucks and moved out of port..”

    Could you, please, provide an example of such dangerous goods? Is this prohibition general (any provision in the the IMDG Code prohobiting certain dangerous goods to be stored in a warehouse in the port of discharge?) or is it dependant on the specific regulations of any given port?

    Thank you!

    Reply
    • Hello Ilian, these direct delivery restrictions are depended on the specific regulations of the port..

      As an example, below are some cargoes that are allowed by Transnet National Port Authority in South Africa only on the basis of Direct Discharge..

      Class 4.2 – Substance liable to spontaneous combustion.
      Oxidizing Agents:
      UN 1448 – Barium permanganate
      UN 1485 Potassium chlorate
      UN 1495 Sodium chlorate
      UN 1513 Zinc chlorate
      UN 1942 Ammonium nitrate

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