Bill of Lading Withdraw Ship

Time Charterer has the identical liberties as the shipowner to make contract terms with shippers:

  • Freight Prepaid Bill of Lading (B/L)
  • Freight Payable Bill of Lading (B/L)
  • Received for Shipment Bill of Lading (B/L)

Here above Bill of Lading (B/L) types may be issued by Time Charterer. Furthermore, Time Charterer may issue Through Bill of Lading (B/L) which impose more liabilities.

When shipowner deals with an unethical or unsubstantial time charterer, problem may arise and shipowner may encounter with many potential pitfalls. The worst scenario in time charter, if the charterer defaults on paying hire money, then almost certainly shipowner withdraw the ship from the charter. Shipowner take over the operation of the ship. If the ship has cargo on board when shipowner withdraw ship, shipowner need to decide what types of Bill of Lading (B/L) have been issued by the time charterer. Moreover, shipowner need to specify what payments, if any, the shipper has paid over to the time charterer.

  • If Freight Payable at Destination Bill of Lading (B/L) have been issued, then the shipowner can demand the freight from the shipper before delivering the cargo.
  • If Freight Payable as per C/P (Charterparty) have been issued, then shipowner may be fortunate enough to discover that payment had not yet been made, in which case shipowner can demand the freight. On the other hand, in an unfortunate case, shipowner may figure out that the shipper had already remitted the money to the time charterer.
  • If Freight Prepaid Bill of Lading (B/L) have been issued, then shipowner will be unlikely to recover any of the freight for the cargo. Nevertheless, Bill of Lading (B/L) shipowner is legally obliged to continue the voyage and deliver the cargo to Bill of Lading (B/L) holder at the port of discharge. In this case, shipowner has to pay all the burden including voyage expenses, port costs and bunkers (fuel). Shipowner can claim these costs back from the time charterer but in real world time charterer rarely be able to settle the shipowners claim.