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HomeBill of LadingSignificance of Bill of Lading Clauses

Significance of Bill of Lading Clauses

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

In this article, we will discuss the significance of these clauses in bills of lading as it relates to “containerized” shipments and the reasons why these clauses are typed or stamped on a bill of lading..

Standard/Normal Clauses that appear on a bill of lading

Significance of Bill of Lading Clauses - shipping and freight resource
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1) Shippers Load, Stow, and count or SLAC – The shipping line states that the shipper has loaded, stowed, and counted the contents..

This clause is shown in bills of lading for container shipments for FCL cargoes because the carrier is not privy to the nature of the cargo packed in the containers..

The carrier relies on the information provided by the shipper in terms of the cargo, number of packages, weight, and measurement..

Read my article What does Shippers load, stow, and count mean..?? for more info on this clause..

2) Said to Contain or STC – This clause is shown in a container bill of lading for FCL cargoes again for the reason that the carrier is not privy to what was packed inside the container..

This clause means that the description of cargo and packages is based on the shipper’s declaration and that the carrier has not 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 the USA as being generic 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 the USA has 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 – The shipping line is confirming that the container has been loaded on board the ship mentioned in the bill of lading..

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

Read more about the Difference between Received for Shipment, Shipped on Board, Clean on Board & Clean Shipped on Board..

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

6) Freight Collect – The 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 – The shipping line is certifying that the freight for the carriage of the cargo has to be paid at a specified location (XXXXXXX)..

 

Special Bill of Lading Clauses that are requested by customers which only some carriers allow 

  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, detention or combined free days at the 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 may be released to the consignee on the bill of lading without the requirement of an original bill of lading..
  3. On-carriage to the final destination on consignee’s risk, cost and responsibility – This clause is requested for some bills of lading where the Place of Delivery is an 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 to the inland destination..
  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 carrier(s)

1) Clean on Board – This clause is predominantly used for non-containerized cargoes loaded on break bulk or multi-purpose vessels.. This clause confirms that the cargo has been received by the carrier in GOOD ORDER AND CONDITION..

When this clause is shown on a container bill of lading, the shipowner, carrier, and/or master can be liable for any damages that the consignee might notice to the cargo upon discharge, and as such is a dangerous clause as far as a carrier is concerned..

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..

image for underdeck
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2) Under Deck Stowage – There may be cases where customers may request that a container be kept away from the elements – either sun or water and stowed under deck on a container ship..

For example, some cargoes like bitumen, gums, natural rubber, etc can experience temperature fluctuations during the voyage and this fluctuation could result in the melting, softening, hardening, or caking rendering the cargo useless..

If this clause is requested by the shipper and the line shows this clause on the bill of lading indicating that the container has been stowed under deck and in reality it hasn’t been, the carrier may be vulnerable to potential 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, certain types of hazardous cargo are not allowed to be discharged at the port facility and need 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..

The non-standard clauses referenced above are based on what I have personally seen and handled..

These clauses may also be in electronic bills of lading and not just paper bills of lading.. DCSA has released examples of 6 standard clauses as part of their DCSA Standard for the Bill of Lading Version 3.0 Beta 1..

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


This article has been republished after some updates


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Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..

22 COMMENTS

  1. Hello Hariesh,

    I am trying to recall the name of a specific clause. It would be in effect for a situation i.e.; 3 men on a boat, one man loses his goat during a storm, but all 3 men will be responsible or share in the value of loss. Is this “Force majeure”?

  2. Dear Manaadiar,
    Congratulations on a great article. I’d like to make a similar addition with your permission.”
    As a bill of lading collector, this article reminded me of the records of irresponsibility written on bills of lading. For example, they would write something like this: “The act of God, The Queen’s enemies, fire, machinery boilers, steam, and all and every other dangers, and accidents of the seas, rivers, and steam navigation, of whatever nature and kind soever excepted.” As seen here, what they meant was “if God permits, I will transport and deliver your cargo.” Of course, they were justified in writing these on bills of lading at that time. Because the risk undertaken by the carrier at sea is not proportionate to the profit they will make. The risk of the carrier at sea is not so unpredictable in any other industry. Additionally, there are country risks nowadays, and carriers want to protect themselves from them, so they add clauses like this: “Carrier’s liability ceases after discharge of goods into Customs custody and Carrier shall not be responsible for delivery of cargo without the presentation of the Original Bill of Lading, as per XYZ Country Customs Regulations.” If they don’t write such additional clauses on bills of lading, they remain responsible for the value of the goods.

    • Merhaba Ahmet Abi, thank you for your valuable contribution as usual.. “The risk of the carrier at sea is not so unpredictable in any other industry.” – this is an extremely valid point that many forget..

  3. Hi
    i have move some shipments from India to Colombo, Sri Lanka. the customer want us to mention clause “SHIPMENT HAS BEEN EFFECTED IN CONTAINERS” on the BL. Please confirm what is it mean and can we mentioned on the BL.

  4. I am shipping a cargo from HK to China. My cargo is on hold by the owner of vessel, due to the receiver has a debt to the vessel owner. Is there any clause that i could use to request the vessel owner to release the Cargo?

  5. 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.

    • 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..

  6. 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.

    • 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..

  7. 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.

  8. 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….?

  9. 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…

  10. 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,

  11. “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!

    • 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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