Shipment

Perhaps the most serious difficulty arising at a discharging port in relation to bills of lading is where for some reason the bills are unavailable. Normally such difficulty can be overcome providing the consignee issues a suitable letter of indemnity, fully guaranteed by a reputable bank. This indemnity is held by the port agent on the shipowner’s behalf, and eventually exchanged for the original bill of lading, which latter document can then be attended to in the normal way. Agents should not delay in exchanging a letter of indemnity for the properly presented B/L because banks charge quite steeply on a time basis for their counter-signature on such documents. Such letters of indemnity must not contain any value or time limitation clauses because delivery of cargo to a person not entitled to receive it is a fundamental breach of the Bill of Lading contract and thus places the carrier outside the terms of that contract, opening the door to an action in ‘tort’ where the damages are not limited by the Bill of Lading clauses. Is a Bill of Lading which is in some way claused or dirty. This implies that the cargo loaded on board is not perfect in every condition and the shipowner is thus protecting himself against a cargo claim for bad delivery at the discharge port with an appropriate endorsement. Whilst most bills of lading are issued when the cargo is actually shipped on board the vessel, in the liner trades there is the alternative where cargo is actually received into the custody of the shipowner or his agent, such as a wharfinger or dock authority, and is not actually on board the vessel at that particular time. It is also sometimes called a custody Bill of Lading. If such a bill of lading is issued, the shipper is entitled to demand from the carrier an endorsement on the B/L.