Who should bear responsibility for loss of original bill of lading

image for reader questionGreetings Hariesh. I was just wondering, in a case whereby a plane say crashes or disappears, and having some OBLs being couriered, who would be responsible for doing the Letter of Indemnity to facilitate release of cargo?

Question from Lloyd BaMumu Taadira

Thanks for a tricky question Lloyd..

An original bill of lading is required for release of cargo when it is issued as

  1. A Negotiable (To Order…..) bill of lading
  2. A Straight Bill of Lading

I have written earlier about what to do when the original bill of lading is lost, so I won’t go into that detail again..

One of the things that needs to be done when an original bill of lading is lost is for someone to issue a Bank Guarantee and/or Letter of Indemnity to facilitate the release of cargo..

Having personally never come across this specific situation, I have opted for practical logic to answer the question..

Image for lost billIf an OBL has been lost in a plane crash or the plane simply disappeared, the logical thing to do would be :

  1. First and foremost, ascertain who holds the title to the goods at the time of loss of the OBL.. This can be determined based on what stage of negotiation or processing the OBL was before it was lost.. The title could change depending on whether the negotiation with the bank was already done or payment processes between the seller and buyer was still to be done etc..
  2. The title holder should approach the Shipping Line and explain the circumstances and provide proof of the loss such as tracking from the courier to confirm the genuineness of the loss, news items, videos, notices from airlines, police or court affidavits etc etc and request the shipping line to issue a second set of bills of lading..
  3. Whether the shipping line will provide a second set without any LOI would depend on the policy of the shipping lines.. Considering the circumstances and based on a sworn court affidavit, I assume they would..
  4. Once that title holder has secure the second set of bills, they can carry on with the negotiation process or payment process or any other process that they would need to follow..

So, to summarise, in my personal opinion, there should not be a requirement to submit an LOI or BG for issuance of second set because of above unique situation.. However, this will be entirely upto the discretion of the shipping line..

If anyone has had an experience as above, please will you share your experience and the process that you had to follow in order to get your cargo released..

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11 comments on “Who should bear responsibility for loss of original bill of lading”

  1. By nazimzianenazim Reply

    Hi

    for almost shipping line, which are used to this kind of situation, release of cargo without presentation of OBL, for any raison (LOST BL,Delay ……..), it exits procedure of LOI of cargo release without presentation of OBL, to stamped and igned by Shipper and, Shipper Bank involved it the business, or consignee Bank guarantee with the amount of cargo value+ insurance policy of the cargo value.
    also we have to check the kind of BL (to order, straight BL), banks are involved or not.

    • By Pascal

      Hello,

      I want to start by thanking you for this educational blog. well done.

      My problem is about a car I shipped from france to Cotonou benin republic. the car was received by the consignee and when he was about doing the custom clearance , the bill of ladding got lost. I contacted the shipping agent and was asked to pay a good sum which I did, the agent has been in contact with the shipping line for a telex release. the shipping line is asking for an invoice between french customer and cotonou customer because somehow they assumed the car was sold. secondly and most strange to me is that they asking my agent to provide “revised circumstance of loss document by mentionning delivery without OBL” I must confess that I have no idea what this means and I will be so glad if you can help me.

  2. By Sean Minogue Reply

    In days of yore, Bills of Lading were sent first and second mail. In other words posted off under separate covers to avoid this situation. There was also the ship’s box – particularly useful in short sea passages such as Durban/maputo

    • By Hariesh Manaadiar

      Hi Kishan, thanks for your comment.. The concept of Electronic Bill will take very long to take effect as the traders of this world are not yet ready to give up paper bills of lading.. There is still a big sense of security surrounding paper bill and in my opinion this will continue for a long time to come..

    • By MADHU RAMACHANDRAN

      If we have the copy of the BL then the shipping line can certify it in case of missing the Originals.

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