You may have heard of the term Change of Destination (COD) in shipping operations.. This article describes what is a change of destination request and how it should be handled..
In my previous post about Parts of a bill of lading, I explained in detail regarding the port of discharge (POD) and place of delivery..
You also read in the post about Bill of Lading that when a B/L is issued as a Combined Transport B/L, the shipping line is directly responsible for the delivery of the container to the Place of Delivery nominated in the Bill of Lading..
A Change of Destination (COD) is a request asking the shipping line to discharge/transport the container to a destination other than the one mentioned in the Port of Discharge or Place of Delivery fields in the Bill of Lading issued..
This is a very important request and one that can create several problems if not handled properly.. In this article, we will discuss how to handle a Change of Destination request and its implications..
A COD is requested due to a variety of reasons chief among which are :
- The original buyer has withdrawn from the contract and the seller has found a new buyer in another country while the shipment is on the water
- The contract between buyer and seller was upto the Port of Discharge, but the buyer now wants the shipping line to deliver the cargo to his door at his cost and risk
- The contract between buyer and seller was upto door on a Combined Transport B/L, but the buyer requires the cargo to be terminated at the Port of Discharge so he can perform the inland haulage
When a COD request is received by the shipping line they have to :
- Firstly ascertain whether the requesting party has the authority to request a COD.. This authority could vary based on the type of bill of lading issued and at what stage of negotiation the bill of lading is.. For example :
- If the bill of lading issued is a Straight Bill of Lading and the shipper is still legally in possession of the bills of lading, only the shipper can request the shipping line for the COD..
- If the bill of lading issued is an Order Bill of Lading consigned To Order of Shipper, but the bill of lading has already been endorsed by the shipper to the consignee, then only the consignee can request the shipping line for the COD..
- The COD request should be received before the container reaches the destination and the manifest has been filed with customs.. In a lot of countries, Customs don’t allow for a change of destination once the container has been landed..
- If the COD is acceptable to the shipping line and customs, then a Manifest Corrector must be actioned by the lines agent requesting this COD, changing the destination and a copy of this manifest corrector must be sent to the discharge port agent (new and old) and also submitted to Customs..
- It is very important that the manifest be amended, failing which the container might be delivered to the wrong destination attracting additional costs for the defaulting party..
A question posted by a reader (Yusuf) was :
“My question particularly relates to the legal implication on the Shipping Line when ‘redirecting’ a container.
As you are aware, it is common practice in SA to redirect shipment between Johannesburg & Durban.
The redirection is exercised at the request of the Consignee/consignee agent, usually without the knowledge or permission of the Shipper. Is this legal? Can it not be considered a breach of contract between the Shipper and Shipping Line?
An example: A shipment is booked for final destination Johannesburg, The Consignee requests the shipment be redirected for final destination Durban. The consignee takes release of the shipment, ex Durban. Enroute to Johannesburg, the container is hijacked. Can the Shipper not make a claim against the Shipping Line for allowing the container to be released in Durban instead of Johannesburg?”
(For those of you that might not be aware, Johannesburg is an inland dry port in South Africa and Durban is a sea port in South Africa which is normally the gateway to Johannesburg)
In response to Yusuf’s question – A COD cannot be generalized as requiring only the shippers permission.. Based on the various types of bills of lading issued and at what stage the bill of lading is at present and who the bill is consigned to, the shipping line may or may not require the shippers permission..
But for a redirection, the shipping line surely has to check and ensure that their liabilities are covered before proceeding with the redirection and the most important aspect is that a manifest corrector is passed..
In your cited example, if the shipping line has accepted the consignee’s request without checking the status of the bill of lading and getting required approvals (where required) from the shipper and actioning manifest correctors, they might well be exposed to a claim..