Liner Ship Agent and Cargo

Cargo being loaded directly into the ship often referred to as break-bulk cargo or conventional cargo to differentiate it from cargo, which has first been placed in freight containers.

The introduction of containerization moved a great deal of manual work off the quayside, in so doing it moved a substantial amount of extra work into the liner agent’s office. With conventional cargo, the agent simply takes the booking and advises the shipper to which transit shed he should deliver his cargo; then the stevedores take over and place it in the ship.

With containerization, the agent having taken the booking then arranges for the necessary container(s) to be available for the shipper. All such container movements to the shipper and then to the docks have to be monitored so that the agent now needs a Container Control department. If the shipper elects to use the door to door service then it is the agent’s responsibility to arrange for the container to move from the depot to the shipper’s premises then to the docks which means that the agent also needs a Transport department.

The foregoing assumes the shipper to have sufficient cargo for a full container load (FCL) but if this is not the case and the shipper has less than a container load (LCL) he presents this to a nominated depot as if it were conventional cargo. The line will usually have contracts with depots to put such LCL cargo into containers. The agent will of course have to monitor the depot’s work and ensure that the LCL containers duly reach the ship at the right time, together with a packing list (like a miniature manifest) for each LCL container.

Liner Ship Agent Dealing with Inward Cargo:  Before a liner is due at the agent’s port it is normal for a manifest of cargo for discharge there to have been airmailed well in advance of the ship’s arrival. In such a manifest the details will include both the name and address of the consignee for each item of cargo, or the name and address of a ‘notify party’. The latter situation is usually when the cargo has been sold with payment via a letter of credit and the notify party is probably the eventual consignee but the bill of lading is issued to ‘order’ rather than to a named consignee.

The purpose of this is to ‘open’ the bill of lading (like a cheque drawn to cash) and this enables the banks involved in the payment transaction to hold the bills of lading as security until payment is in fact made. Although the notify party is often the actual consignee this is not invariable, indeed even the consignee named in the manifest may no longer be the consignee when the ship arrives. You will learn elsewhere in your studies how one role of a bill of lading is that of a document of title. This not only enables an ‘order’ bill of lading to be held as security for payment, but even a bill of lading to a named consignee may be endorsed to another party (this can happen an infinite number of times). That party then has title to the goods described in the bill of lading and can, therefore, claim them when they arrive.

On receipt of the manifest the agent will notify all the parties or consignees (although, paradoxically, he is not legally obliged to do so) and the bill of lading holders will present their documents at the agent’s office. Where freight is payable at destination they will also be required to make payment before their goods are released. In most cases these days, the agent issues a delivery order in exchange for the bill of lading. Such an order is an instruction to the ship, port authority or terminal operator to deliver the consignment to the person named in the order. The department doing this work is probably the most vulnerable spot in the whole of the liner agent’s organisation. There may be scores, possibly hundreds of consignments on each vessel, and probably 99.9% of them will be utterly routine, almost boringly so. Yet the inward freight department always has to be alert to the risk of releasing cargo without receiving an original bill of lading; even encountering the occasional forgery. The point is that it is not simply the amount of freight that is at risk but the total value of the cargo.

Obviously if fraud is being attempted it will tend to be for high value goods. The agent will have arranged transit shed space before the ship’s arrival if the cargo is break-bulk. With containers more or less the reverse of the loading procedure is involved with special attention having to be paid to ensuring that the empty container is returned (‘resituated’ is the container expression) to the correct depot.

One further duty remains for the inward liner agent that of dealing with any cargo claims. These fortunately are less prevalent in containerized traffic but with break- bulk cargo there will always be a few cases of cargo being damaged in transit or less cargo being delivered than is stated in the bill of lading. A cargo claims department is inevitably an unproductive part of the organisation but properly done it makes for good public relations. After all, its sole purpose is to establish as painlessly as possible whose insurance company pays for loss or damage and the Hague/Hague Visby rules are there to determine the degree of liability that the ship has to bear.