What is a Switch Bill of Lading and when and why is it used..??

In the normal course of business you might have come across the term Switch Bill of Lading.. A “Switch” bill of lading is the second set of bill of lading that may be issued by the carrier (or agent) in exchange for the first set of bill of lading originally issued when the shipment was effected.. Image for article regarding who can request for switch bill of lading

Why does one ask for or require a Switch bill of lading..?? Switch bills are requested generally when there has been a change in the original trading conditions..  Some of the reasons could be :

  • Goods could have been resold and the discharge port has now been changed to another port and this could have occurred as a high-seas sale..
  • The seller (who could be an intending agent) does not wish the name of the actual exporter to be known to the consignee in case the consignee strikes a deal with the exporter directly..
  • The seller does not want to know the buyer to know the actual country of origin of the cargo so he requests that the port of loading be shown as some port other than the one the cargo was loaded from..

The practice of issuance of switch bills of lading is considered by many, including TT Clubs and insurance companies, to be dubious or fraudulent depending upon the reasons why the switch bill of lading is required to be issued..

In order to protect themselves from any possible claims arising out of issuing switch bills of lading, the shipping line/agent have to ensure that

  • They are covered by their insurance for issuance of such switch bills of lading
  • They should provide their insurance company with the exact reason for the issuance of the switch bill of lading..
  • They must have the written authority of the principal before issuing the switch bill of lading, if the issuing party is acting as agents for a shipping line or principal..
  • They must issue the switched bill only after collecting the first set of bills, as the dangers of two sets of original bills in circulation for the same cargo are many..
  • The switched set should not contain any information different to that of the original bill of lading, (like incorrect port of loading, or change in the condition and quantity of the cargo).. If switch bills contains misrepresentations, the carrier/agent will be at risk of claims from parties who have suffered a loss because of such misrepresentations..
  • If the agent has been asked by the principal to issue the switch bill of lading based on an indemnity from the customer, the agent should ensure to get the wording format from the principal and get the completed indemnity approved by the principal before issuing the switch bill of lading..

It seems to be the concerted view of almost all insurance companies covering exports, that a switch bill of lading issued with any misrepresentation or information contrary to the first set issued, without the express acceptance and understanding of the buyer is a fraudulent document..

Switch Bills of Lading – Revisited – an article by NAU Pte Ltd., might shed some more light on the matter from a claims company perspective

Have you had any experiences of issuing/requesting for switch bill of lading..??

What did you think of the above article..?? Comment below..

100 comments on “What is a Switch Bill of Lading and when and why is it used..??

  1. Kanwaldeep says:

    Hi,
    My company (T) is in India. My buyer (B) is in Turkey and my supplier (S) is in Vietnam. My buyer B issues me an LC . I , in turn issue an LC to Supplier (S). Now S loads and ships the goods and send the documents to my bank through LC. In those documents, S is the shipper and T is the consignor. I opt for swtich BL and change the shipper to M and consignee to B.
    But what about the other document like Pre shipment inspection certificate, Phytosanitary etc. How do I change those ? If I ask S to do that, the. I have to disclose the details of my Buyer B.

    1. Mohamed Muddasir Baig says:

      Hi,

      Once you receive the PO from client you should read all terms and condition and plan accordingly , for Pre shipment inspection certificate you need to inform to client in advance that you will issue a certificate in your letter head as you will have a original certificate from supplier.

  2. Kanwaldeep says:

    Hi,
    I am a trader in India. I have a buyer in Turkey who issues me an LC. I am buying and shipping the goods from Vietnam. For which I have issued an LC to Vietnam seller.
    Now when the seller sends me documents, he will mention himself as shipper and me as consignee. For that I can opt for BL switch, but for other documents like Pre shipment inspection, phytosanitary (If reqd) etc, how can we switch those ? And for discounting my LC I need to have all those documents with me as the shipper and my Turkey buyer as the consignee.
    If I ask my supplier to do it in advance then he will get to know my buyer.

  3. Hiten says:

    My company (Trader T) in Hong Kong sources goods from a manufacturer (M) in Japan and sells to a customer (C) in India.
    We do not wish to disclose to M where we are selling the goods, nor do we wish to disclose to C where we are sourcing the goods from. Our understanding was that the first BL would have: Consignor: M, Consignee: T, PoL: Japan, PoD: HK and the second BL would have Consignor: T, Consignee: C, PoL: HK and PoD: India.
    However, we are told by our agent that the PoD on both BLs (original and switch) will be India – we want the first BL to have PoD as HK else M comes to know that we are simply trading the goods, which will affect our other business with them. Please advise if we have to re-export? or if we should use switch BL only?

    1. Hello Hiten, you cannot amend POL/POD in a switch bill of lading.. only shipper/consignee/notify can be amended.. If the shipping line allows you to change POL/POD you maybe able to do it, but it might not be supported by your insurance company in case of any claims..

  4. POONAM says:

    WHEN SHIPPER IS CHANGED IN SWITCH .. POL AUTOMATICALLY CHANGE RIGHT?

  5. nancy says:

    can we change the port of loading in the switch BL

    1. Hello Nancy, technically it is not allowed..

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