Help, carrier refuses to show commercial information relating to the cargo on the bill of lading

Carrier refuses to show commercial information relating to the cargo on the bill of lading..”

This is a regular complaint that one hears from shippers, their agents, forwarders, clearing agents, brokers etc..

Many customers maintain a view that the shipping line is being pedantic about this..

So is the carrier being pedantic or are they right..??…………….

Some of the commercial information relating to the cargo on the bill of lading being rejected by the shipping line may be :

  1. Value of the cargo
  2. Incoterms
  3. Terms and conditions of the sale (sales contracts)
  4. Certifying letter of credit information
  5. Origin of the goods
  6. etc……..

So why does a shipper need all this commercial information relating to the cargo on the bill of lading and why doesn’t the carrier want to show them on the bill of lading..

Generally a customer might request commercial information relating to the cargo on the bill of lading to be shown when it is issued as a negotiable bill.. If it is a negotiable bill of lading, there is usually a bank or a Letter of Credit involved..

Because of this involvement and maybe in their over zealous attempt to try and protect their interests and to adhere to the documentary requirements of the letter of credit, the customer and/or the bank may try to cram in as much information as possible on the bill of lading..

While the above information maybe important to a buyer or a seller, a bill of lading is the wrong document to show this, as there is no connection whatsoever between this information and the shipping line..

Remember, the bill of lading is only a transport document that fulfills among others, the role of being an “evidence of the contract of carriage” and is NOT a contract of sale between the buyer and seller..

So whatever information is shown on the bill of lading should relate only to the contract of carriage between the shipper and the carrier and nothing related to the terms of sale between the buyer and the seller..

In fact, the shipper on the bill of lading need not even be the original seller of the cargo and the shipper need not be from the same country as the country of export and this shows how much emphasis a bill of lading places on the relationship between a buyer and seller..

carrier refuses to show commercial and sales information on the bill of ladingBut why are the carriers being pedantic and what is the risk to the carrier if they add this extra information on the bill of lading you may ask..

Well, similar to a seller or buyer having insurance on their cargo, a carrier also has their own insurance covers in order to cover their carriage liabilities..

These insurance policies may only cover (among other things) the carrier’s assets, their responsibilities and liabilities, but not the cargo or its value.. Cargo insurance still remains the responsibility of the customer..

As an example, let’s say the Incoterms between the buyer and seller are included in the body of the bill of lading and it reads CIP Pretoria, an inland location in South Africa..

When the shipment reaches Durban which is the gateway port to Pretoria, the consignee could argue with the carrier, that their term is CIP Pretoria and they insist the carrier deliver the goods to Pretoria whereas the bill of lading may only be consigned to Durban without any final destination..

The Incoterms, of which the CIP term is a part, does not affect the contract of carriage entered into between the shipper and the carrier and therefore the carrier is not obliged to accept the consignee’s argument which maybe right in terms of the sales contract..

To avoid such issues and also not to attract any liability, the carriers do not encourage requests from shippers to show commercial and sale related information on the bill of lading as it is only a transport document..

I mentioned above that the bill of lading is the wrong place to show this information.. The right place to show, elaborate and clarify such information maybe a Commercial Invoice or a bill of sale which is totally between the buyer and seller and has no connection with the pedantic carrier..

image for what do you thinkWhat has been your experience in this regard..??

Have you faced any such challenges where the Carrier refuses to show details relating to commercial and sales information of the cargo on the bill of lading..??

Interested to hear.. 🙂

*** End of Article ***

41 thoughts on “Help, carrier refuses to show commercial information relating to the cargo on the bill of lading”

  1. What is the industry standard documentation regarding cargo destination.
    Destination : ONE OR MORE SAFE PORT(S) INDIA
    Is it a requirement to have the destination mentioned on the BL?

  2. Hi! In my case carrier refuse to issue OBL to shipper on demand due to CONSIGNEE non-payment of “OLD” account in POD carrier office. Is it Legal? Should consignee correctly charge of “DETENTION” as a consequence?

  3. After reading all the below arguments, I am still unable to understand the reason why shipping line refuses to add cargo value / contract value on BL.
    How does that effects their business?

  4. on L/C, CFR Chittagong sea port, Bangladesh or CFR Chittagong, Bangladesh which one is correct to be used as per Incoterms 2010. Very often i’m facing this problem. Please help me.

  5. It is correct. The Bill of Lading is a Document of Title to the Goods and a Contract between the Shipper and The Carrier. It can only go as far as Stating the cargo being shipped and shipping terms and conditions relating to the shipper and the carrier.

    Other detail such as:Value of the cargo, Incoterms, Terms and conditions of the sale (sales contracts), Certifying letter of credit information, Origin of the goods, etc. will be specified in the export sales contract and or Commercial Invoice which are between the Seller and the Buyer.

    So the carrier as no obligation to specify the above on the Bill of Lading

  6. I have a question – it might be slightly off topic, inspired by something in the article, but I couldn’t find an article which addresses this specifically (maybe you can refer me). I am currently working on a degree in International commerce (in France). I have noticed that the incoterm CIF (or CFR) is used often in cases such as the example you used in this article. But I was taught that those two terms do not include post delivery…. so the inland location of delivery cannot coincide with those particular incoterms! Only with CIP (or CPT) in the case of a full container. Is this mistaken? Is there just a wide berth between theory and practice on that particular issue?

    • Hello Leah, pardon the long delay in responding to this.. I didn’t realise I missed this question.. You are absolutely right.. This was a mistake on my part where I typed CIF Pretoria instead of CIP Pretoria..

  7. DEar All,
    If the shipment is covered by a Letter of Credit, I advise to write on the B/L not more than what the L/C requires. The more you write on the B/L, the higher the risks that the bank find typos or mistakes on it. The consequences would be much more paper work and eventually causing delay to the beneficiary to cash the payment.
    Luciano Ferreira

  8. Thanks for this piece of writing, but I do have a question:

    I guess that mentioning the value of cargo, in particular, might be of great importance in some cases, especially if there is a voyage charter party that DOES NOT limit the carrier’s liability to the amount of the freight. This will make the carrier highly alert while stowing the cargo not to cause any damage that might cost him the cargo “value”.

    What do you think?

  9. Extremely interesting since I am currently studying Freight Forwarding and this has made it clear what the Bill of Lading needs to show.

  10. Hi Hariesh
    First Client must read Terms n C conditions of Carriers B/L (on reverse of CBL)

    The b/l a legal tender is primarily a receipt / contract of carriage / delivery note covering full cargo description as detailed in Shipping Instruction submitted by Client .

    A document covering an instruction from Shipper / Agent to Carrier / Agent to ship cargo / containers from POL to POD. Perhaps an inland Port / Destination on a thru b/l if Carrier offers intermodal as well. An agreement between Carrier and Shipper / Agent.

    The freight invoice will recover said charges incurred by Carrier.

    Carriers docs are b/l ‘ freight invoice and manifest .

    They do also have the responsibility of ensuring that requirements by Customs and Port Authorities are duly met and submitted to Carrier prior to release of OBL.

    Sounds harsh but if LC is problem with Carrier then change it . Client must ensure LC drawn up without impeding Carrier or ANO not directly linked with Cargo Commercial.

    The B/L is a Carrier document and details will be at Carrier’s discretion.

    Other than that , thanks to BC for covering special requirements . (Hallo BC)


  11. Hi Hariesh,

    1 Entering the VALUE of the goods on the Bill Of Lading is an entitlement under the Bill of Lading Clauses ( Hague Rules and its derivations ) BUT if the value is declared , the Bill becomes a VALUE Bill of Lading and the Carrier may , at its discretion , charge a very much higher freight rate based on this value and the Carriers perceived additional liability under their P&I Club rules – I would suggest in such a case that the matter is first discussed with the P&I club to determine the additional freight amount.

    This was very common in the ” old days ” when it was normal to carry cargoes such as gold bullion by sea. This may today relate to very high value cargoes such as specialised computer or medical equipment etc whose value may run into many millions of rand/U$

    For other clauses such as country of origin , INCO Terms etc , If there is space of course, these may be included in the BZODY of the Bill only and covered by the line by a stamp declaring that the particulars in the body of the bill are supplied for information only by the shipper and NO Liability at all in relation to these shall attach to the carrier (before having this stamp made however – suggest run it past your legal advisers) .

    In general though , I would agree that too much unnecessary information on any document is messy and will tend to hinder rather than help matters in case of disputes

  12. Dear Sir,

    Very good topic. Expect more details about this topic.

    What would happen if we show the cargo value on BL? Is there any connection to ocean freight, if we do so ?

    Further, I think, if we show the “Place of delivery” on BL as Durban, consignee can not argue to deliver the cargo at CIF Pretoria.
    Please advise.

  13. I think on issue of the VALUE of the cargo…. in the bill of lading there is a standard liability which sometimes USD500.00 per bl, unless there is an express indication of the value of goods in the bl…

  14. Very Good article once again and as usual. This is a problem that is always faced by the shipping companies because, as rightly pointed out, of the desire of the Merchant to cramp as much information as possible on the bill of lading.

  15. I have been in import-export business for over 50 years and already know all the above points.
    What I have never been able to understand is the bank officers who “pass” such stupid clauses in the letters of credit.
    The importers who open the L/Cs might be educated or uneducated. But, BANK OFFICERS??? Aren’t they supposed to be well educated???
    Can anybody tell me because I have never been able to figure out their thinking….

    • Hi Chandru, good question.. The traditional method of trade, its documentary requirements and practices have not changed or kept pace with the innovations and progress in the industry.. But on the other hand, people are also scared of taking liability and therefore want to make sure they are over protected and hence mention many such clauses on the L/C..

      While we know that banks don’t verify if cargo is actually loaded on a ship, they should be able to check on how the documentary requirements on an L/C could be made easier..

      Any bankers out there who can maybe explain..??

  16. If a carrier steals valuable about 100m consignment and ready to pay nominal carrier liability, how can one overcome the issue???

  17. Hi as a shipper we are facing regular problem with shipping liners/their agent in mentioning discharge port agent as well as contact details in BL as per LC. Shipping Line or their agent insists to accept as per pre-printed BL. Please advice…

    • Hi Tushar, discharge port agent on the bill of lading used to be an integral and important part of the detail on the bill mainly for the convenience of being able to identify who to contact at the discharge port for release.. This information could be vital in certain countries or remote locations where communication options may not so great..

      But making this an LC requirement maybe taking it a bit too far..

  18. Thank you for clearing this up for me in writing. I had the same argument with out Finance Department where they insist that the LC number is reflected on all documents and even our bank RMB agreed that we can force them to do that.

    Nobody would believe me that it is not an issue you can force. Needless to say, nobody would believe me when I said it is almost like forcing our government to put our name and address onto our car licence which is put on your windscreen??

    I find your emails very informative! Especially when I can actually show my arguments in writing .

    Thanks you very much.

  19. Yet another useful article, thanks. Indeed, this is a common difficulty encountered in shipping. A case I can share from my experience is with temperature controlled cargo in reefer containers and the inclusion of temperature recorders.

    We included the temperture recorder as part of the listed contents of the reefer container. At one point, one office of a shipping line refused to allow such inclusion on the BL. We made a case that other offices of the same shipping line had no qualms about it. They still refused so we went to the head office and were able to agree on a solution.

    It would be listed so long as we did not include the serial number of the recorder in the description. My take on such requirement was that they feared a lawsuit from us in case of a malfunction and without the serial number, the shipping line could have more arguments in their defense.

    We need to have traceability of the temperature all along the supply chain; we’re not in the business of suing shipping lines.

    Another case –which we have yet to solve– is with Ecuador and raw materials imported to be transformed and the resultiing products be re-exported.

    Ecuadorean customs authority insists that this ‘transformation clause’ be listed on the BL covering the import of raw materials. As can be expected, this is confusing for the shipping line as it makes no sense to them. And, to make matters worse, it has to be in Spanish language.

    We have engaged in discussions with the Ecuadorean importers and authorities but to no avail. They’ve yet to comprehend the true function or purpose of the BL and their lame excuse is that others can do it, why can’t you?

    • Thank you for your continued support and contribution Carlos.. Thank you also for the interesting case study, especially the Ecuadorean conundrum.. I guess when the government authorities insist on something and the carrier doesn’t want to oblige the client, then they are caught between a rock and a hard place.. 🙂

  20. Letter’s of credit are still a factor here. In many cases forwarder cargo receipts, NVOCC bills of lading are not acceptable under (as written) and only Carrier direct OBLS are allowed.

    Consignment and related L/C information is listed on negotiable bills of lading at this point and are part of what the banks refer to as “continuity” throughout the banking documents.

    Other than consignment information the rest of what is in a L/C could be pushed to another supporting document tot he LC. Something to take into account keeping in mind at the same time that many shipper’s or even importer’s do not understand.

    I do agree that with the exception of the LC on direct carrier moves that limited facts as you’ve outlined should be adhered too. NVOCC etc are more flexible

    • Hi Lallensack, each carrier or other entities such as a freight forwarder or NVOCC all have their own methods of dealing with this issue.. But in general, yes NVOCCs seem to be more flexible when showing information the bill of lading, but one needs to be prudent in ensuring that there are proper insurance and liability covers in place before doing so..

  21. Very informative , thanks for covering these critical issues which normally arises , and at times the response is its not our policy which puts off the customer , but if well explained as above , it helps to understand liabilities of all parties involved

  22. In this instance, the person that is arranging the letter of credit needs to give the bank and customer specific instructions for the LC. Once the LC comes back from the bank, after you give them instructions, the LC needs to be audited that it has been drafted correctly, according to LC instructions. If the LC has not been drafted correctly by the foreign bank, refuse it until it is correct. The OBL is not the place for these items. Your BL instructions on the LC should say, “Full Set Clean On Board Bill of Lading” . “3 Originals, 3 Non Negotiables Non-Rated is okay.

    • It’s more than 10 years that I’ve been busy doing commercial correspondence and such jobs for some trading companies in Iran but have not encountered such a case since the buyers are not willing their financial details shown in the B/L as they believe that the B/L is just a transport document. But I admit that Iran’s importation regulations is different from the whole world and the government is just lurking to get more importation taxes by any means.

    • Try to tell Sales that you wish to amend or refuse an LC. That is always an interesting conversation. If the requirements cannot be accepted by the Seller, this is not so hard. If it requires documentation (whether from Supply Chain people or a bank), Sales does not understand and Corporate may support them.

      Has anyone else been forced to accept an LC that was almost surely going to be in discrepancy at banking (due to documentation requirements)?

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