HomeBill of LadingThe importance of using the latest version of bill of lading

The importance of using the latest version of bill of lading

Ok here is an interesting case study relating to a bulk shipment..

A reader had a question based on a real-life situation where a dry-bulk vessel was loading several parcels, but one of the parcels – call it ABC, had the below issues..

  1. Total parcel size of ABC = 1,200 mts..
  2. Part of this ABC parcel (1,000 mts) was loaded from 26 to 29 Oct, then the ship continued to load other parcels (not related to ABC) till around 15 Nov..
  3. The balance of the ABC parcel 200 mts was loaded and completed on 16 Nov..
  4. Due to the loading deadline of 15th Nov for the ABC parcel, the Charterer’s and Letter of Credit (LC) conditions required the splitting of the parcel and issuance of separate BLs..
  5. The problem was that Charterer’s/LC conditions did not accept “shipped on board” notation on the bill and required BL dated 15th Nov for the 1,000 mts and another BL dated 16th Nov for the other 200 mts with an implied penalty for exceeding the deadline..
  6. However, the Carrier insisted on either placing a shipped onboard notation (which is unacceptable to the charterer/bank), or otherwise they wanted the first BL to be dated as 29th Oct, which was when the first part of the parcel was actually loaded on board (again not ok for charterer).
  7. An NYPE TC and CONGEN Bill of Lading was used for this trade..

The questions from the reader are as below..

  1. Who is right and who is wrong? Why?
  2. Is it right to say that 15th Nov BL is ok as the same qty was onboard at that date?
  3. Is there a risk for different markets and mis-presentation to the receiver?

In response, if we break down the problem and analyze it, this should have been an ideal solution..

  • The CONGEN Bill of Lading offers two options with two date fields
    1. Date Shipped on Board
    2. Place and Date of Issue
  • The date shipped on board is the date on which the goods have been loaded on board the ship..
  • Place and Date of issue reflects, where the bill of lading was issued and the Date on which the bill of lading was issued (bill of lading date)..

Considering the above issues, in my view, the requirements of both the Carrier and the Charterer/Bank can be achieved here..

Carrier need not insist on the “shipped on board”  notation in the body of the bill of lading as that notation is already mentioned in the “Date Shipped on Board” field in the bill of lading..

So they can very easily show in that field 29th Oct and 16th Nov for the 1000 mts and the 200 mts respectively on each of the bills of lading issued..

To satisfy the Charterer/Bank, the “Place and Date of issue” field can show the Place of issue as wherever it was issued and the Date as “15th November” and “16th November” for the 1000 mts and the 200 mts respectively..

Technically, the Shipped on Board Date and Bill of Lading Date can be the same or different as long as the Bill of Lading issuance date is NOT BEFORE the shipped on board date.. In this case, the bill of lading dates are on or after the cargo has been shipped on board..

Unless there have been any other specific requirements or conditions in the NYPE TC, I don’t see the above solution as being a problem..

I suggested the above solution based on the assumption that the CONGEN Bill of Lading 2022 would have been used as that is the latest version..

CONGEN Bill of Lading 2022

But I was told that it would not work because the bill of lading template that was used in this case was the CONGEN Bill of Lading 1994..

CONGEN Bill of Lading 1994

As you can see, the 1994 version of the CONGEN does not have this “Date Shipped on Board” field or any other specific SOB field so it makes sense why the carrier would want to insert the notation on the bill of lading..

The biggest limitation in this case was that the charterers did not accept any onboard date.. However, in the end, they gave up and the issue was closed by adding such on board notation..

While good sense prevailed in this case, this could have very easily also gone the other way and become a stalemate which could have resulted in documentary delays, delays in ship sailing, discharge or ship demurrage..

While there is no regulation on which version or release should be used, it is best if all parties involved in a bulk shipment use the latest standard forms as there are constant updates to regulations, legal notations, sanctions, war clauses, etc all of which could affect any of the parties..

Also, there needs to be an understanding by those drafting the letters of credit not to place unreasonable or unnecessary conditions like “no onboard date” etc.. Such actions only delay the process for everyone..

In case you were not aware, BIMCO is a global organization and shipping community with members in excess of 2000 companies across 130 countries.. These members cover over 60% of the world’s tonnage and consist of local and global companies both small and large..

One of BIMCO’s activities is the creation and maintenance of charter parties, bills of lading, and other standard agreements that are widely used by these members and sometimes by non-members as they are considered an industry standard.. These standard agreements are particularly used a lot in bulk cargo shipments..

 

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..

2 COMMENTS

  1. This is definitely an interesting case study highlighting a clash between the Carrier’s and Charterer/Bank’s requirements for bill of lading dates and notations. Here’s my analysis based on the information provided:

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