A parcel chemical tanker master must have his bill of lading act in order. By the time a ship is three months year old you will find that the “ACCOMPLISHED BILLS OF LADING” box file in ships office is full, unlike for other types of ships sailing in the world.
On arrival at the discharge port the rightful Owner of the Cargo should present an original B/L to the Master to take delivery of the cargo. With the presentation of the B/L and the discharge of the cargo, the voyage is said to be accomplished for Shipowners on completion of discharge and at that time all other original B/L’s for this cargo are deemed to be ACCOMPLISHED and WILL stand void, no longer giving good title to the cargo. Cargo must be delivered following the instructions in the original B/Ls.
Bill of Lading is the right to possession of cargo —not ownership.
Cargo must be delivered to the consignee in the same condition as it was loaded. The description of cargo in the bill of lading is evidence in a court of law of the load port condition. If you find that there is a discrepancy between the B/L and actual condition the B/L must be claused with the appropriate wording to indicate the correct condition of the cargo. Often a prospective buyer decides to purchase the cargo on the basis of the B/L description. The cargo must then be delivered to the consignee at the discharge port in the condition described in the B/L or the cargo owner will claim compensation from the ship.
The Bill of Lading is the most important of all cargo documents, and it represents a large amount of money . The Owner can be ruined by a Master who signs bills of lading in a mindless fashion.
The number of original B/L will appear on the B/L in a statement. The disport details on the B/L must be the same as intended in the charter party, otherwise master must refuse to sign.
The master must not sign anymore B/L in number than mentioned on the B/L unless these additional B/L are non negotiable. The number of original B/L is mentioned on the face of the B/L and master must ensure it is filled before signing that many originals only.
A signed non negotiable B/L is as good as a photostat.
When Bill of Lading originals are signed, the Mates receipts must be surrendered to master.
It should be correctly dated for the time when the parcel completed loading which is the date of actual shipment.
The master unless instructed by the owners/ charterer should not sign B/L for a port of destination which his ship is physically incapable of reaching in safety. Check for NAABSA clause in South American river ports.
Freight if prepay able must be paid before master signs B/L-- or there is no lien on cargo to recover the unpaid freight.
This is also the time to get the Dead freight statement signed in return. Remember the Dead freight claim is not a discrepancy claim. For MOLOO if shore stops and ship could have taken more as per NOR declaration then issue a protest as well as a Dead freight statement.
The carrier will be unable to avoid liabilities which arise as a result of a failure to check the cargo unless a check is not reasonably possible. Furthermore, endorsements on the Bill of Lading, such as "shipper's figures", "figures as per shore tally", "quantity and condition unknown", or "said to be ....", will seldom absolve the carrier of blame if the Master has failed to check the particulars of the cargo to his own satisfaction.
The Master should not state anything in the Bill of Lading which he believes to be inaccurate. If the Master finds errors or inaccurate information in the bill of lading he should correct it with an appropriate clause before signing it. If in doubt contact the Office.
Several Different shippers can load same cargo for several different consignees—such cargoes must be covered by separate sets of B/L even if commingled.
Bill of Lading is a negotiable document, the cargo may be sold while en route, and the only evidence the buyer has of the nature, the quality and the quantity of the cargo is the
information given in the Bill of Lading. The Master is of course not expected to be an expert on each of the hundreds of chemicals that may be shipped. But he is not expected to throw his commonsense and judgement into the winds.
Sampling procedures must be rigidly followed. In the chemical parcel tanker context it is cheaper to fail a wall wash than a tank first foot sample ( especially an unauthorised Texas foot ) and it is cheaper to fail a first foot than a disport out turn sample –by say Benzene released by epoxy paint during voyage into Styrene Monomer
Read charterers Blue book for instruction regarding cargo discrepancy. It will specify the percentage discrepancy to :---
1) Ignore ( usually up to 0.1% )
2) To issue written LOP ( 0.1 to 0.5%)
3) Remeasure ,inform charterers and call P&I.
Courts in many countries rule that the ship is not liable for shortages up to 0.5% ( read the C/P )
Call P&I club surveyor also in case of injury to crew, pollution , cargo contamination like first foot failure.
Obviously if something is too great for master to handle prior departure ( at an odd hour in a odd place ) refuse to sign B/L and pass it on to agent with proper letter of authority instructions. It is better to protest even if the cargo discrepancy ( ships figure less ) is just one ton.
If the shore figure is not available prior sailing, Master must leave a short loading protest with the agent. The LOP must be prepared leaving the Bill of Lading figure blank. Instruct the agent to present it to the shipper on Master’s behalf, once the Bill of Lading figure is declared.
If the Shore Bill of Lading figures are not are not available before sailing from load port the Master must authorise the agent to sign the Bills of Lading on his behalf by means of a LOA for each grade.
If damaged cargo is loaded but not described as such in the Bill of Lading, the consignee has every right to assume that the damage has been caused by the ship and so her Owners will be held responsible.
Commingling----If the shipper refuses the Master to clause the Bills of Lading with commingling statement then the Master should issue LOP and contact then operator. It is not uncommon for one cargo or parcel to be sold to various consignees, each of which receives a portion of the total quantity loaded. In these cases, the total quantity of all the Bills of Lading issued must equal the total loaded, and each Bill of Lading Bust contain the following commingling clause:
"THIS SHIPMENT AS LOADED ON BOARD THE VESSEL AS PART OF ONE ORIGINAL LOT OF _________________ METRIC TONS WITH NO SEGREGATION AS TO PARCELS. NEITHER THE VESSEL NOR THE OWNERS ASSUME ANY RESPONSIBILITIES FOR THE CONSEQUENCES OF SUCH COMMINGLING NOR THE SEPARATION THEREOF AT THE TIME OF DELIVERY"
The Bill of Lading must always be handed to the agent repeat the agent and definitely not the shipper. The master must recognise faces around him when he signs the bill of lading. The agent will hold on to the document unless he is authorized to release it by the Operator.
When it is necessary to clause a B/L it is necessary to involve the assistance of a pro-active local cargo surveyor appointed by P&I. For example if you are loading high Brix Molasses from a barge in Central America and you find that the cargo is heated to 60 deg C. Such high heating destroys the entire consignment due to thermal decomposition.---or the barge has been doing live steaming for its own convenience and foaming which is a visual effect of fermentation is readily apparent.
B/L must be in the proper format as per the charter party. The number of originals and freight clauses must be in conformity with the terms and conditions of the charter party.
The format must include Paramount clause incorporating Hague rules. The letter of authorization to agent to sign B/L on master’s behalf should specify that Paramount clause, New Jason's clause and York Antwerp rules clause must be incorporated.
Hague rules regulate all the rules relating to B/L. The Hague rules provide that “ no carrier shall be bound to state in Bill Of Lading any marks, numbers, quantity or weight which he has reasonable grounds of suspecting do not accurately represent the goods actually received or which he has no reasonable means of checking” any terms in B/L which is inconsistent with Hague rules is automatically null and void. Deviation to save property ( not life ) is not an infringement of contact of carriage as per the Hague rules. They do not apply to deck cargo. Time for carrier to file recovery claims is extended. Servants of the carrier are afforded Himalaya protection. –same rights and immunities as the carrier himself. There are special regulations for special cargoes—normally time bar for cargo claims is one year.
New Jason’s clause provides that shippers/ consignee/ owners of cargo must contribute to general average whether it is carriers negligence or not.
York Antwerp rules provide that general average and salvage are payable according to this. Expenses for delay at port of refuge, wages and subsistence for crew are covered. General average continues even is adventure is no longer in peril.
The master must NOT accept a letter of Indemnity to issue a clean B/L for bad cargo as courts have regarded that this practice as a collusion between the shipper and the carrier to defraud the consignee. Master is fully responsible for the cargo condition and LOI will not be honoured if things go wrong. In some circumstances with a valued and trusted customer the owner may tell the Master to accept LOI.
The cargo description in the Bill of Lading is based on the Mate’s receipt; therefore the Mate’s receipt should be treated as respectfully as the Bill of Lading. The master must be directly involved with Mates receipts. If the Mate without guidance has ignored basic caution it affects the endorsements on the Bill of Lading.
A Mate’s receipt must not be signed if it contains any conditions which are contradictory to the Charter Party. The Mates Receipt cannot contain blanket appraisals like cargo has been ‘stowed to Master’s satisfaction’ .If such clauses appear, the Mate must delete these before signing. The Mate’s receipt is just a cargo receipt .
In case of mail delay and original B/L does not reach disport in time the cargo can be discharged under a LOI against bank guarantee made in a proper format . One of the formats is with bank guarantee and the other one is without bank guarantee when owner says guarantee is not required. Both formats are available in the P&I club rule book--which states under which country law disputes will be settled . This LOI must come from Head Charterer to Head Owner and not from some local shipper to some Sub Charterer. So do not discharge unless advise has been received from Head Owners that ‘indemnity’ has been obtained.
Only the Master or someone expressly authorised by the Master in writing can sign the Bill of Lading.
If Master authorises agent to sign B/L , the LOA must contain the words” in accordance with the Mate’s receipts”
If the vessel is on time-charter the Master should not issue any LOA without prior approval from head charterers.
The vessel is required to unberth as soon as possible upon completion and in such circumstances the Bill of Lading must be given to agents to sign and release them when instructed by the Operator. The LOA for agent to sign B/L must be signed and stamped by the agent.
The agent must also be instructed to scan and email the Bill of Lading to Operator for approval.
Express B/L: NIL original B/L, only non negotiable straight or “ express” B/L . This is only when receiver and shipper is same company. Say UCC to UCC or DOW to DOW. It contains clause “ Express B/L : cargo to be delivered / released to consignee without production of original B/L”. It states “ No or zero originals “. Here consignee at disport need not produce Bill of Lading.
A clean B/L is often the requirement of a bank if the holder of the B/L requires payment under a letter of credit. In many cases the shipper will insist or implore that they need a ‘clean' Bill of Lading’ in order to release the bank payment under a letter of credit. The Master must remain strong and NEVER agree to sign a ‘clean’ Bill of Lading for damaged or contaminated chemicals no matter how much pressure is put on him by the shipper or his stooges. The Master must seek help by contacting the responsible operator who will then decide what should be done, e.g. calling in an independent surveyor to inspect the cargo etc.
Some charter parties contain a clause to the effect that ‘Master is to sign Bill of Lading as presented’. This does not give the shipper the right to demand a ‘clean’ Bill of Lading for ‘unclean’ cargo.
Always remember that the Master does not only have a right but also a duty to clause the Bill of Lading in case of cargo defects, since the clausing is meant to protect the Owner as well as the consignee.
The Master should always make sure that the Bill of Lading is marked: -‘Freight payable as per charter party.’
The shipper sometimes request ‘Freight collect’ to be inserted on the Bill of Lading. ‘Freight collect’ means that the freight is payable upon delivery and the Master must therefore not sign the Bill of Lading unless Operator has authorised to do so.
The Charterers might hold back the freight until the cargo has been delivered even if the contrary has been agreed to in the charter party.
At the discharge port the master must only deliver the cargo to a bonafide holder of an original B/L—usually there are three originals.
If the B/L is OPEN then he can deliver the cargo to who ever presents one of the three originals (the bearer) provided he has no reason to suspect fraud.
If the B/L is STRAIGHT he should check that the party claiming delivery (consignee )is the same as named on the document.
If the B/L is NEGOTIABLE the master must check if the document has been properly endorsed and that the person claiming delivery is entitled to the goods. Once the master has released the cargo at the disport he should endorse the B/L as ACCOMPLISHED and date/ sign the remark and file the sheet in the accomplished B/L file . Once this ritual is completed, the other two originals automatically become null and void.
In the chemical business B/L states that goods are deliverable to a named consignee OR ORDER. This makes the B/L NEGOTIABLE and it can be endorsed to someone else if they buy the cargo. Endorsing means adding a clause to the B/L and signing it. If the original consignee signs the reverse with no other remark the B/L becomes as OPEN B/L. If the signature is accompanied by a remark “deliver to XXX” the document becomes STRAIGHT. If the remark says “ deliver to XXX or ORDER” then XXX can further endorse it to someone if they wish to resell the cargo.
The receiver usually surrenders one of the three properly endorsed B/L to the disport agent. The master should not discharge cargo till he is sure that the agent at disport is in possession of the original B/L to avoid cargo getting into unauthorized hands. This is eminently possible as many times chemicals/ veg oils are discharged into barges who in turn is transferring into another couple of barges –commingling and adulterating right under your nose..
Before the vessel arrives at the discharge , the Bill of Lading may be traded several times which may complicate the identification of the proper receiver. Hence it is important that an original Bill of Lading be handed to the Master with an uninterrupted sequence of endorsements. Likewise, the Bill of Lading must contain a clause stating that the whole cargo may be released against one original Bill of Lading although more than one original exists.
If one of the original bills of ladings out of 3 is placed on board, the charterers must be advised. The remaining 2 originals must have the following P&I recommended words inserted “ one original retained on board against which delivery of cargo may be properly made on instructions received from Shipper/ Charterer”. The master should identify the party accordingly.
Master must not accept original B/L for carriage on ship if the shipper or his representative refuses the sign the “Receipt for B/L carried on board”.—he should hand over the B/L only to the consignee named in the receipt. He must not accept original B/L for carriage on board also if the consignee and destination is not named on B/L
It is common practice that three original Bills of Lading are issued, in case one should get dropped by the pigeon. Banks always require original documents to release a payment under a letter of credit, which often takes time, whereas the shipper also has to make sure that an original B/L is present at the port of destination in time to release the cargo.
When lightering inform parties concerned. Now Master becomes Shipper and is entitled to a Mates receipt from the barge.
Master should always on arrival at the load port, ask the agent to provide a copy of the Bill of Lading form intended to be used and check if it meets his requirements.
As no ullage can be taken due to the foam on top of the Molasses or turbulent vegetable oils , the quantity can only be calculated by draft survey, and this figure is should be used as Bill of Lading figure.
When discharging cargo against presentation of an original Bill of Lading, the original Bill of Lading must be presented to the Master prior commencement of the discharge operation. If the receiver is identical to the party named as consignee in the Bill of Lading the receiver must be able to identify himself upon showing the Bill of Lading, and then the cargo can be released.
If the holder of the Bill of Lading is different from the one named as consignee on the Bill of Lading, the Bill of Lading must be duly endorsed to the ‘new’ receiver, who must be able to show his identity.
If the Bill of Lading is issued ‘to order’ the holder of the Bill of Lading is the legitimate receiver of the cargo.
Upon presentation of the original Bill of Lading the receiver must always endorse the Bill of Lading as receipt for the cargo.
The Master must sign the Bill of Lading and write the date when the voyage was accomplished. i.e. Voyage completed xx date. With the presentation of B/L and the discharge of cargo the voyage is said to be accomplished for ship owners
When discharging against L.O.I. a written cargo receipt must always be obtained from the receiver.
When discharging in a port other than the one stated in the Bill of Lading the above guidelines still apply except one major difference, namely that all the original Bills of Lading in circulation must be presented prior to commencement of discharge operation. By doing this the Owners ensure that no other holder of an original Bill of Lading in good faith will request delivery of the cargo in the port stated in the Bill of Lading.
When the vessel is out on time-charter the Master is NEVER to sign Bills of Lading to any destination, which is not within the trading limits advised by Operator.
In addition to the Bill of Lading, there are many other documents which record the quantity and condition of the cargo. The Mate's receipt, cargo manifest, stowage plans, tallies and draft surveys, as well as notebooks, correspondence and reports are all of great evidential value. The carrier will rely on such documents to demonstrate the condition and quantity of the cargo at the time it was entrusted to the Master to defend any claim for loss or damage.
Remember there is no legal obligation upon the shipowner to deliver cargo without production of the relevant bills of lading and the P&I rules specifically state that the member (owner) is not entitled to make any recovery from the Association if the cargo is delivered without production of original Bills of Lading. In simple terms, if the cargo is delivered without the original accomplished bill of lading being presented or cargo delivered on production of fraudulent bills, then the cargo has, in effect, been stolen and can leave the owner exposed to an enormous loss. The Master must take great care in examining Bills of Lading. If in any doubt he shall contact the Office immediately and before release of cargo.
B/Ls which have been left in blank or only partially completed must never be signed.
There have been many fraudulent attempts to obtain chemical cargoes, or payment for cargoes, by the use of using false documents, including false B/L’s. Masters have received requests from unauthorised sources to release information in an effort to obtain cargo fraudulently. Masters should therefore be careful of giving any cargo or voyage information to unauthorised persons, particularly when contacted at load ports or when at sea. Masters should strictly comply with voyage orders from Charterers and/or Owners concerning cargo security matters and should report immediately and fully any suspicious circumstances, or unauthorised attempts to gain information on cargo, ship or voyage charterers and/or their Owners.
Any cargo information sent to anyone outside the Master or Agent’s operational sphere MUST be copied to the charterers.
SCAC code: ( Standard Carrier Alpha Code )—for US , Canadian and Korean cargoes .
When a cargo is loaded for discharge in a U.S. Port, U.S. Customs require a unique Bill of Lading number to be on the original(s) Bill(s) of Lading. If the Agent does not assign a number then consult with the Ship Operator who will advise the proper number.
XXXX—official code given to shipowners
XXXX—call sign of ship
XXXXXX— B/L date month year
X—final can be a digit—if more than 9 then 10th one will be A 35th one will be Z ( number of original B/Ls’)
Recapitulation:--In case master has to sign the B/L you must check the following—
Check carefully for accuracy all information on the Bill of Lading and that the following are all included:
Shipper and name
Vessel’s country of Registry
Port of loading
Product description and quantity
Port of discharge
Consignee and/or Receiver
Charter Party date
Location of Charter Party consummation
Time Chartered disponent owners
Cargo Charterers full name
Specification regarding number of original Bills of Lading that have been issued
Location where Bill of Lading is being issued
Date of Bill of Lading preparation
Masters Signature in Blue ink.
In case the cargo discrepancy is > 1/2 % notify the operator.
Note: Weight in metric tonnes is declared in AIR -- never in vacuum.
CAPT AJIT VADAKAYIL ( 28 years in command )