When answering my last post Question regarding cargo under Letter of Credit, I mentioned that part bills could be a solution for two shipments in a same container where part of the cargo is covered by L/C and the other part is not..
However, there are some criteria/requirement in order for the carrier to be able to issue Part Bills of Lading and for the customer to accept Part Bills of Lading for this particular scenario..
We will examine these criteria/requirements in this post..
But first, let’s refresh What is a part bill of lading and how will it assist in this case..??
Part Bills of Lading are multiple Bills of Lading issued for the same container in order to accommodate the request of the client for purposes of documentation, trade or delivery..
In this particular case, part of the cargo in a container is shipped under L/C and other part is not..
So 2 part bills of lading has to be issued – 1 for the cargo under L/C which will invariably be a Negotiable (To Order) bill of lading and another 1 for the cargo not under L/C which will invariably be a Straight Bill of Lading..
It may well be possible that at the destination, the customer who has been issued a Straight Bill of Lading is ready to receive cargo before the customer who has been issued a negotiable bill of lading, because he might still be waiting for the documentary credit process to be completed..
Therefore the concerns regarding the delivery of the cargo, needs to be addressed..
1) Ideally there should be a common forwarder at destination for both shipments so that he can collate the documents and take delivery from shipping line and release cargo to the individual clients..
However, for this, there has to be a Master Bill of Lading in the name of the forwarder and the forwarder should be the one issuing two House Bills of Lading in the name of both the consignees..
2) If the forwarders are different
Scenario 1 : The line will have to issue two of their bills of lading directly.. In this case, the shipping line will have to arrange both the cargoes in the container to be unpacked at the same time at a bonded warehouse under their custody..
Upon unpacking, the line will have to wait for the documents authorised by customs and port and payments due, after which the cargoes maybe released..
Scenario 2 : If the line is unable to do the above unpacking/storing option, the two forwarders should come to an agreement as to who will be the lead forwarder (this is generally decided by who has the maximum cargo in the container) and full container maybe released to that lead forwarder provided that all the customs/port documents and monies are recovered for both cargoes..
That lead forwarder would then unpack the cargo at his warehouse and release the other part to the other forwarder..
As you can see from above, it is not such an easy process to accomplish above and requires a lot of co-ordination..
General examples of when, where and under what circumstances a Part Bill of Lading maybe issued..
1) A forwarder handles the shipments of one shipper/multiple consignees and packs all the cargo in the same container to optimize the utilization of the container and also to achieve economies of scale.. Similar to Groupage, but here the forwarder doesn’t want to issue his House bills of lading..
2) Same shipper ships different cargoes covered under different order numbers, say 4 orders in one container, to 1 consignee.. This is done sometimes to differentiate the pricing of each cargo..
In these cases, the shipper/booking party may request the shipping line to issue the number of bills of lading as required..
Example, if there are three bills of lading covering the cargo packed in a container number BIMU1234567, three bills of lading SAFRES1234567, SAFRES1234567, SAFRES1234567B maybe issued whereby
- BL 1 = SAFRES1234567
- BL 1 = SAFRES1234567
- BL 1 = SAFRES1234567B
In order to ensure that each of the bills of lading are individual, yet linked to each other, it is very important that the body of the bill of lading denotes clearly that there are part bills issued.. It is usually done by endorsing the body of the bill as
- SAFRES1234567 should be endorsed as Part 1/3 (indicating that this is the 1st part of 3 part bills)
- SAFRES1234567A should be endorsed as Part 2/3 of bill of lading SAFRES1234567 (linking it to the first bill)
- SAFRES1234567B should be endorsed as Part 3/3 of bill of lading SAFRES1234567 (linking it to the first bill)
SAFRES1234567 being the primary bill will normally carry all the freight charges and the freight charges for all 3 bills has to be paid by one entity (either shipper or consignee)..