“Carrier refuses to show commercial information relating to the cargo on the bill of lading..”
This is a regular complaint that one hears from shippers, their agents, forwarders, clearing agents, brokers etc..
Many customers maintain a view that the shipping line is being pedantic about this..
So is the carrier being pedantic or are they right..??…………….
Some of the commercial information relating to the cargo on the bill of lading being rejected by the shipping line may be :
- Value of the cargo
- Terms and conditions of the sale (sales contracts)
- Certifying letter of credit information
- Origin of the goods
So why does a shipper need all this commercial information relating to the cargo on the bill of lading and why doesn’t the carrier want to show them on the bill of lading..
Generally a customer might request commercial information relating to the cargo on the bill of lading to be shown when it is issued as a negotiable bill.. If it is a negotiable bill of lading, there is usually a bank or a Letter of Credit involved..
Because of this involvement and maybe in their over zealous attempt to try and protect their interests and to adhere to the documentary requirements of the letter of credit, the customer and/or the bank may try to cram in as much information as possible on the bill of lading..
While the above information maybe important to a buyer or a seller, a bill of lading is the wrong document to show this, as there is no connection whatsoever between this information and the shipping line..
Remember, the bill of lading is only a transport document that fulfills among others, the role of being an “evidence of the contract of carriage” and is NOT a contract of sale between the buyer and seller..
So whatever information is shown on the bill of lading should relate only to the contract of carriage between the shipper and the carrier and nothing related to the terms of sale between the buyer and the seller..
In fact, the shipper on the bill of lading need not even be the original seller of the cargo and the shipper need not be from the same country as the country of export and this shows how much emphasis a bill of lading places on the relationship between a buyer and seller..
But why are the carriers being pedantic and what is the risk to the carrier if they add this extra information on the bill of lading you may ask..
Well, similar to a seller or buyer having insurance on their cargo, a carrier also has their own insurance covers in order to cover their carriage liabilities..
These insurance policies may only cover (among other things) the carrier’s assets, their responsibilities and liabilities, but not the cargo or its value.. Cargo insurance still remains the responsibility of the customer..
As an example, let’s say the Incoterms between the buyer and seller are included in the body of the bill of lading and it reads CIP Pretoria, an inland location in South Africa..
When the shipment reaches Durban which is the gateway port to Pretoria, the consignee could argue with the carrier, that their term is CIP Pretoria and they insist the carrier deliver the goods to Pretoria whereas the bill of lading may only be consigned to Durban without any final destination..
The Incoterms, of which the CIP term is a part, does not affect the contract of carriage entered into between the shipper and the carrier and therefore the carrier is not obliged to accept the consignee’s argument which maybe right in terms of the sales contract..
To avoid such issues and also not to attract any liability, the carriers do not encourage requests from shippers to show commercial and sale related information on the bill of lading as it is only a transport document..
I mentioned above that the bill of lading is the wrong place to show this information.. The right place to show, elaborate and clarify such information maybe a Commercial Invoice or a bill of sale which is totally between the buyer and seller and has no connection with the pedantic carrier..
What has been your experience in this regard..??
Have you faced any such challenges where the Carrier refuses to show details relating to commercial and sales information of the cargo on the bill of lading..??
Interested to hear.. 🙂