Saturday, April 20, 2024
shipping and freight resource services
HomeBill of LadingWhat to do when the original bill of lading is lost..??

What to do when the original bill of lading is lost..??

image for original bill of lading postMy Original bill of lading (OBL) is lost………..!!!!!!

A chilling sentence that creates panic in the hearts of many of the people involved in a global trade transaction involving an Original Bill of Lading..

While shipping and transport documents do get lost in transit, does it mean the end of the world for the shipper or consignee especially if the most important transport document in global trade is lost..??

Not necessarily.. There are a few options as below..

What is a bill of lading..??

Let’s have a quick recap on What is a Bill of Lading and why there is a big fuss if it is lost..

A Bill of Lading has 3 basic purposes or roles :

1) Evidence of Contract of Carriage – emphasis on the term “Evidence

The B/L is the EVIDENCE of the contract of carriage entered into between the “Carrier” and the “Shipper or Cargo Owner” in order to carry out the transportation of the cargo as per the sales contract between the buyer and the seller..

2) Receipt of Goods – emphasis on the term “Receipt

A B/L is issued by the carrier or their agent to the shipper or their agent in exchange for the receipt of the cargo.. The issuance of the B/L is proof that the carrier has received the goods from the shipper or their agent in apparent good order and condition, as handed over by the shipper..

3) Document of Title to the goods – emphasis on the term “Title

It means that the holder of the B/L has the title to the goods which gives them the right to claim the goods or further transfer it to someone else..

Why the big fuss if an original bill of lading is lost..??

The loss of an original bill of lading could have a severe impact on cargo delivery and ship operations, especially in the bulk or break bulk sectors as the offloading of the cargo only happens on presentation of the original bill of lading..

As per the terms of the contract of carriage a carrier can only deliver goods against the presentation of at least one original bill of lading.. If the bill of lading is an “order” bill of lading, the master of the ship has the obligation to ensure that delivery is made to the last valid endorsee presenting the original bill of lading.. Once that rightful delivery has been done, it discharges the carrier from further obligations..

Issues surrounding an incorrect original bill of lading, or improper or lack of endorsement on the original bill of lading could affect various parties including the ship owner, ship operator, ship’s agent, port, shipper, or consignee..

This could further lead to a very quick escalation of ship demurrage and other contractual penalties which could be very prohibitive..

Loss of original bills of lading and the subsequent processes that need to be followed could also lead to delays in the transfer of funds between the various parties such as seller, buyer, banks, etc potentially causing a chain of financial losses..

In the case of container shipments, the impact may not be that severe as container delivery happens much later and may not affect the ship or ship owner/charterer..

What to do when the OBL is lost..??

  1. The party who last had possession of the bill of lading before it was lost should advise entities who were party to the trade transaction about the loss of the OBL..
  2. The entities may include, but not restricted to shipper, exporter (remember they could be different), consignee, importer, bank or financial institution, shipping line, ship owner, ship operator, port agent, freight forwarder, and anyone else in the chain who may be affected due to this loss..
  3. As proof, the party may Image for lost billpost an advertisement or notification in the local media about the “loss” of the original bill of lading..
  4. In case of urgent requirement of the goods and to mitigate delays, the receiver could resort to a court order advising the carrier to deliver the goods to the last valid endorsee who would have presented the OBL..
  5. This may be based on a surety bond given by the entity claiming the goods, for an amount approved by the court..
  6. The carrier may request a Letter of Indemnity from the entity claiming the release of goods. indemnifying them against liability under the outstanding original bill..
  7. You can download a generic Letter of Indemnity here.. Please note, that since various shipowners, operators, and carriers may have their own format, it is always best to check with the carriers on their format..
  8. In some cases, the carrier may require the bank’s agreement to join in the LOI.. This is the format of the LOI including the bank that can be used for the same.. Here is a bank guarantee format of CMA CGM as an example..

As you can see, the loss of an original bill of lading could be a catastrophe in many cases and could lead to unnecessary tension and stress for many parties..

Shippers, Consignees, Banks, Ship Owners, and others involved in the issuing, receiving, and negotiation of trade documents do have a few options to avoid such headaches of sending and receiving original bills of lading :

  1. Switch to Electronic Bill of Lading which removes the need for issuance and sending and receiving of paper bills of lading..
  2. Issue Sea Waybills instead of negotiable B/L, but this would need the seller and buyer to have absolute trust in each other.. This also means that the B/L is non-transferable or non-negotiable so only the named consignee can take delivery of the goods after proving their identity..

This article has been republished after some critical updates

SUBSCRIBE

Enter your email address to subscribe for free and be notified about new content on this site

Join 46K other subscribers
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..

53 COMMENTS

  1. Good morning,
    In case of “ad valorem bill of lading, may the bank guarantee/letter of indemnity limited to said amount in case of delivery of goods without presentation of an original bill of lading?
    Thanks
    PS Ex l/c documents checker, now retired

    • Hi Antonio, by issuing an Ad Valorem bill of lading, the carrier is exposing themselves to liability to that value.. However in a lot of cases, carriers are known to insist on a higher % cover of the cargo value when issuing LOI.. For example, they can insist on an LOI that covers them for 200% of the cargo value which is because they don’t know the actual cargo value.. However, in the case of Ad Valorem, since they know the value of the cargo, it may not be required, but eventually it will still depend on the carrier’s conditions and what kind of LOI they want to work with.. There is no hard and fast rule on this.. Have you seen any practical examples of such..??

    • Hiphương trần.. In the case of a Straight Bill of Lading, as it is non-transferable and non-negotiable, the goods can only be released to the named consignee.. If that consignee is you, then you should be able to prove to the carrier who you say you are.. You can do this through some legal process like notarised affidavits, court order etc.. Based on this, some carriers may release the goods to you based on LOI only without a bank guarantee .. But eventually it is left to the carrier to decide what they need to satisfy themselves that they are giving the delivery to the right client as they are the ones who will be held liable if mis-release of goods happens..

  2. I have submitted an original house bill of lading to the shipping line. The say they will only accept a original master bill of lading with their watermark on it. I do not seem to have the master bill of lading. What are my options?

  3. The original master bill of lading has been lost. We have submitted the the original negotiable house bill of lading to the cma cgm shipping line. The are refusing to release the goods due to the fact we are unable to produce the master bill of lading. We do however have a black and white scan of it that was sent from the supplier. The container is in port.What are our options?

  4. What to do when shipper is unwilling to give back the bank guarantee for a lost BL and wants us to wait till period of guarantee is over, What are our legal rights?

  5. 1.By supplier original Bill of Lading Received (2 originals) mismatched with the foreign bank covering letter (3 originals

    2. By supplier original Bill of Lading Received (2 originals) with the foreign bank covering letter (2 originals)

    Please provide deceleration for the 2 BL received.
    Pl suggest matter for declaration to bank

  6. dear Mr. Hariesh,

    when an original HBL is absent can consignee take delivery of goods against bank guaranty?
    Can the Forwarder release d/o to consignee against bank guaranty?

    thanks
    Selina

  7. Hi! Andy Could you please let me know happened in the instance where the freight forwarder sent the Original BL’s via a courier and it was lost by the courier service.

  8. hello mr manaadiar,
    Our original Bl is lost by ups courier to U.S.A.. We are not in position to give any BG as bank will treat as full deposit which will incur a cost of 15% per annum accounting to 2 times invoice vlaue loss in interest only in period asked by them for 6 years. What should we do in this case. help me out. my goods are already in demmurage in U.S.A. for last 2 days

    • It would depend firstly on the type of bill of lading involved.. If it is a straight bill of lading, you can try discussing with the shipping line wherein the shipper and consignee both can give some sort of acceptable non-financial guarantees/LOI etc..

  9. Hi
    Please assist me. My forwarder is not sending me original sets of BL due to some disputes between us. Now my container is in transit and about reach at destination within next 7 days. The goods are really important for my consignee and he needs urgent delivery.
    How can I make arrangements to my consignee to take the delivery without presentation of original BL.
    The shipping line is Maersk…

  10. Hi Mr. Manaadiar,

    we are seller with a CAD payment, the OBL is lost and I do not know what to do, it is possible to ask duplicate as you indicated in this article? it is ok if we provide a declaration of the loss?
    Please let me know if you can help with this matter.
    Best regards.

    • with straight you are referring to the sea way bill, that usually accompany the goods and the customer can clear them directly?
      This is a negotiable bill of lading, notified to a bank and the goods traveled from Dubai to India.
      Hope I clarified a little

  11. hello mr manaadiar,
    Our original Bl is lost by fedex courier to rusia. maersk is asking for 200-300% Bg. Value of goods is around 50000 usd. We are not in position to give any BG as bank will treat as full deposit which will incur a cost of 15% per annum accounting to 2 times invoice vlaue loss in interest only in period asked by them for 6 years. What should we do in this case. could we get your number to disucss my number is 00919948151116 pls call me and help me out. my goods are already in demmurage in russia for last 15 days

  12. My BOL got lost by USPS. I will need a court order to clear my goods. Can someone on here help my with the words that must appear on the court order?

  13. If a freight forwarder sends the original Carreir B/L’s by DHL, UPS etc and that courier company loses those B/L’s. Is their any legal argument to make the forwarder to come up with the Bank Guarantee and LOI as we know the courier company will only accept the B/L’s as pieces of paper and not their real worth.

  14. My situation is like this :
    Payment made to shipper thru bank.
    Bank gave us OBL.
    We lost OBL in post to CHA.
    We have NON NEGOTIABLE COPY of BL.
    We have payment proof by BANK.
    We have Original Commercial Invoice/Packing List.
    We are direct importers.
    How can we get released the goods ?

    98153-36000

  15. Please assist. I have a situation where, the OBL is lost, the bank has issued a bank guarantee, the shipping line is declining to release the BOL even with the bank guarantee. The shipping line refuses to issue a new BOL, as they want an LOI, but the bank refuses to sign the LOI due to the clause of the validity of the LOI. Please advise what I can do in this case.

  16. Hello….
    I have an issue currently.
    We are the charterer. The bank has lost our Original BL. Kindly advise what should we say and do to the bank.

    • Hello Mimie.. Is there an L/C involved..?? If so which bank lost the bill of lading..?? Issuing bank or Applicant bank.. Did they lose all the bills..?? If the bank has lost it, they should provide the bank guarantee to the shipping line, based on which the shipping line can release your cargo.. Are you the consignee on the bill of lading..??

  17. Hi
    We have a situation where the goods are sailing and the shipper is demanding Extra money to the commercial invoice and is not willing to send us original B/L..

    Though we have paid the complete amount according to commercial invoice and We have bank receipts for the same.

    What can be done in this case as he’s not willing to send us the original B/L.

    THANKS

    • Not sure what is your payment term to the seller. If under LC or DP guess such issues will not arise. If you are buying under advance payment, then this is the risk you have taken.

    • If you are paying under advance payment, I would insist that the BOL is either Express Release or Telex Release. It is so important to build up a good relationship with your supplier. Even when our imports are 50% proforma we still try to encourage the supplier to send the BOL Express Release. Most are happy to do this because we have built up that trust. This way originals are not required to clear the goods and you can be sent an electronic copy. In the event an original has gone astray we have requested the supplier to re issue as either Express Release or Telex Release and we will cover the small cost to do this. We have not had a problem with a supplier refusing this.

  18. pls clarify ,
    Seller submitted B/L to overseas bank;
    Buyer may not receive B/L in time & Buyer release payment based on Bank confirmation,
    without receipt of B/L original are still in transit (Courier) , shall Buyer may release cargo through Express / Telex release .

  19. Hi,
    we have a situation whereby the carrier cannot find the original bill of lading after freight forwarder have endorsed it. carrier asked freight forwarder to made a police report and then insist of a bank guarantee in order to release cargo. the fact for the matter the freight forwarder don’t even have the non negotiable bill of lading in hand. how can we resolve this issue? please advice.

  20. I do needs some urgently

    my shipping agent has given me a bill of lading with 5 pieces ofmy consignment but on arrival the Clearing agent has shown us a BOL which was sent to them by my shipping agent as 8 pieces and they would give us the delivery order because it does not match the Original Bill of Lading.What do we do now?Whose fault is it.?

    Thanks

    shan

    • to be honest

      both the shipping bills were diffrent right from HBL number and number of packages.But the shipping agent clearing agent has clearly adviced us they will not clear it unless they are the same as what they received.clearly its the fault of my shipping agent who has not given me the original invoice after loading it through another forwarder and ithat forwarder has sent it to the clearing agent who has got the correct HBL and my shipping agent cocked up by happily sending me the one which was not updated and that caused the nightmare.

      WHO DO i BLAME AND CAN i GET COMPENSATION?whom do I write with all this evidence I have with me?Is theer an Ombudsman i can take my cae to?Could you pleas help.I really appreciate your website.

      thanks

  21. Hi,
    Salam,

    M working as commercial person in freight forwarding company,
    today our customer lost 3 / OBL set by him rider whom collect that B/L from carrier.
    kindly hardly advise. what the procedure to collect duplicate for releasing cargo?

    B. Regards ………… Ahsan Yar Khan

  22. in case the B/L set has been lost, the carrier requests the bank guarantee of 200% goods value. But liabality ends only when the lost documents are found (?!). does it mean the shipper needs to pay the bank guarantee for example for 1000 years? or does the guarantee has any time period? if something is reported to be lost or destroyed it cant be reexisted..there has to be a way out of it, no? if not, sooner or later the cost of guarantee has to reach over the real goods value. Please comment

  23. what is the amount to be mentioned on the joint indemnity/surety bond ? can the shipping line demand 150% of the Invoice amount on the indemnity ? How is the shipping line aware of the invoice amount ? how can they what is the price of the goods in the shipment?

    • Hi Abhi, in such cases, the line will ask for the copy of the commercial invoice in order to ascertain the amount of indemnity and the value of the cargo will play a big part in them deciding the amount of indemnity..

  24. I am a little bit confused here.
    1. Who should provide a security bound to the carrier, (i.e. the bank or the shipper or the last person who hold the OBL?)
    2. Who should take the action to the court? Carrier only or any one who has interests in the shipment? (i.e bank, shipper, consignee)
    3. Where to file the case in front of court? (POD or POL or the place where may face third party claim for wrongful delivery?)
    4. I though when the OB/L is lost, the shipper or the carrier can just simply obtain some kind of invalidating judgment from the court to render the missing bill of lading null and avoid, then reissue a new one.

    I would be very appreciate if you could help me out here. Those questions has hunted for a while.

  25. PLEASE BE GUIDED THAT WE ARE A NVOCC OPERATOR AND ARE HOLDING A MASTER BILL OF LADING DUE TO NON PAYMENT OF FREIGHT BY THE SHIPPER , WE HAD ISSUED A FREIGHT PREPAID WITH A CLAUSE I.E SUBJECT TO REALIZATION,SHIPPER NOT PAYING THE FREIGHT AND ALSO THE PREVIOUS SHIPMENTS FREIGHT ,MOREOVER THEY ARE CLAIMING IN THE INDIAN COURTS THAT WE HAVE MANIPULATED THE MASTER BL BY PUTTING OUR NAME, DETAILS OF THE CASE ARE ON FMC WEB-SITE DCKT 1880 , WE SEEK YOUR GUIDANCE HOW TO RECOVER OUR DUES AND CONVINCE THE COURT OF ACT OF MISLEADING & CHEATING BY THE SHIPPER

  26. we have a situation where customer has lost original bills of lading and the bank will not countersign a letter of indemnity…what is the legar rights or who has legal erights?

    • Hi Iain, pls can you elaborate on your question.. Do you mean that the bank is not prepared to issue a guarantee on your behalf..?? It is possible depending on the bank and the amount of risk that they want to take on behalf of the customer.. Did you try the steps mentioned in the above article vis-a-vis court order etc..?? The actual owner of the cargo whether the seller or the buyer hold the legal rights to the cargo always..

  27. Perhaps this is another topic then but I have an original (MSC) b/l in front of me with the following preprinted text:…
    If this is a negotiable (To Order / of) Bill of Lading, one original Bill of Lading, duly endores must be surrendered by the Merchant to the Carrier (…) in exchange for goods or a delivery order. If this is a non-negotiable (straight) billl of lading …
    which seems to imply that the “To Order Of” addition is pretty relevnt to making the b/l a negotiable document; in both cases the b/l will be an original, but the workings is different I have come to understand. I suppose the resolutionas you described is adequate for any lost original b/l, be a negotiable or not so that differentiation does not necessarily have to be made I think

  28. Hi,
    many b/l’s are not made out ‘to order’ and thereby become a non-negotiable document; in what way does that change the procedure in case of loss?

    • Hi Paul, whether the bill is made out TO ORDER or not doesn’t influence whether the document is negotiable or non-negotiable.. Only an original bill of lading is recognised as a negotiable document whoever the consignee is..

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RELATED ARTICLES

SUBSCRIBE

Enter your email address to subscribe for free and be notified about new content on this site

Join 46K other subscribers

LET'S SOCIALIZE

Most Popular

Recent Comments