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Bill of Lading functions - bulk carrier guide

The Bill of Lading (B/L) is a unique type of document which has three distinct but overlapping functions. These are usually expressed as :-
From this, three important consequences arise for the Owners and the Masters as their employee :-
  1. When he signs the B/L, the Master does so, not on behalf of the Charterers or Shippers, but on behalf of the Owners. The B/L is an Owner’s document, and it is the Master’s responsibility to ensure to the best of his ability that it is properly prepared and signed. This applies whether the ship is employed on a Voyage or Time Charter.

  2. If the B/L contains inaccurate or misleading statements about the quality or quantity of the cargo it covers, then Owners will be liable for the consequences, at least in the first instance. The Master’s main concern must be, to see that this cannot happen. Therefore it is essential that the Master clauses directly on the bills the correct condition of the quality and quantity of cargo if these two items have not be properly described in the document presented to him for signing. If he wants assistance with the wording to be used in the clausing, he should call the commercial office who may engage the local P & I representative for advice.

  3. If an incorrect B/L is issued, for whatever reason, the situation is not necessarily wholly beyond repair, but speed of action is essential, since once a third party takes up the B/L relying on what is says, it is too late to make any correction. The Master must therefore notify the Owners and Charterers immediately of any apparent irregularity in any B/L which he has issued (or which he knows or believes has been issued by the ship’s agents).

As the B/L is an Owners’ document, third parties such as Charterers and Shippers have limited powers to interfere with the Master signing it. However it is not unusual for a charterparty to provide for the Charterers or their agents the authority to sign B/L’s for and on behalf of the Master. In such cases the Master must issue the agent with the authority to sign B/L’s on his behalf in writing, such authority is to include any additional remarks the Master expressly requires included in the B/L’s.

Under normal circumstances, the B/L is the principal evidence of the receipt of the cargo which it describes. However, it is not the only evidence, and it remains open to the Owners to avoid a claim by showing that what the B/L states is in fact incorrect.

For example, apart from paying great attention to the contents of the B/L itself, the Master must also take all practical steps which may subsequently assist Owners to resist any short delivery claim by proving that no cargo has been physically lost (e.g. by draught survey, by written protest as to any doubt or discrepancy in determining of weights or volumes. Charterers’ surveyors or inspectors must justify any statement which they may make as to the condition of the cargo or ‘pumpability’ of oil residues, and also by keeping properly consistent records of bilge pumping with wet cargoes such as ore concentrates).

In some circumstances, shippers/agents may offer to give the Master a letter of indemnity in return for the Master signing clean Bills of Lading. The Master must not accept such a letter without first checking/obtaining authorisation from the Company. A Letter of Indemnity is strictly not enforceable in law. Only the Company can decide if such a letter is acceptable on commercial grounds

Related information

  1. Required cargo documents for seagoing bulk carriers

  2. Signing a bill of lading & relevant guideline

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Operation of sea going bulk carriers involved numerous hazards . Careful planning and exercising due caution for all critical shipboard matters are important . This site is a quick reference to international shipping community with guidance and information on the loading and discharging of modern bulk carriers so as to remain within the limitations as specified by the classification society.
It is vital to reduce the likelihood of over-stressing the ship's structure and also complying with all essential safety measures for a safe passage at sea. Our detail pages contain various bulk carrier related topics that might be useful for people working on board and those who working ashore in the terminal. For any remarks please Contact us

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