Freight Prepaid

Bills of Lading (B/L) should not be released to shippers marked “freight prepaid” or containing any similar expression indicating that freight has been remitted to the shipowner (or to the disponent owner in the case of a time-chartered ship) without that party’s express authority so to do. The release of such bills without freight actually having been made places a shipowner in a weak legal position, as shipowner (disponent owner) may well lose the right of lien on the cargo if subsequently this is needed in order to force payment of freight. Consequently, either freight should be fully prepaid – as indicated on the Bills of Lading (B/L) – or alternative wording acceptable to all parties and to the letter of credit arrangements must be found. In order to give a charterer the time to make necessary financial transactions, it is often arranged that freight is to be paid within so many days of the signing and/or the releasing of bills of lading by the shipowner, and there should be no reason why, with sufficient foresight, letter of credit arrangements cannot be adapted to this system. It is important that cargo quantity and condition be adequately and correctly described in the Bills of Lading (B/L). Quantity of general or bagged/baled goods can usually be accurately assessed by tallymen – employed by either a shipowner or shipper, or jointly by both, in which event the tally-clerk’s receipt takes the place of the mate’s receipt. With bulk homogeneous cargo there may be dispute between cargo quantity assessed by shore apparatus and by the calculations of ship’s officers based on a draft survey. In some cases where shore apparatus is unreliable (or even non-existent) ship’s draft measurement is the accepted means of assessing intaken cargo weight, and the basis therefore of any bill of lading figure.