I.

BILL OF LADING

“The bill of lading is the basic

transportation contract between the
shipper/consignor and the carrier; its
terms and conditions bind the shipper
and carrier ... unless the bill provides
to the contrary, the consignor remains
primarily liable for the freight charges.
 Who issues a bill of lading and what
does it contain?
(1) The carrier issues the bill, but all too often
the shipper prepares and the driver just
signs
(2) Drivers are not lawyers. They cannot be
expected to read or understand the bill of
lading.
(3) Relying on shipper prepared bills can leave
you with:
(a) No statement of your rights and
remedies
(b) Duties and obligations you would not
knowingly accept.
What bill of lading terms and conditions
should you use?

(1) Shipper Bill

(2) VICS Bill
(3) Uniform Straight
(4) Standard Truckload Bill of
Lading
IMPORTANCE OF
BILL OF LADING
 Importance

The information contained in

the bill of lading is very
important to the carrier.
The aspects that are most
relevant to the Master, will
be explained .
1. Accuracy of the description
of the goods in the bill of
lading
It is important to ensure that,
when signing the bill of
lading, the description of the
goods in the bill of lading is
accurate (marks, apparent
order and condition and
number, quantity or weight).
 1.1. Consequences of
inaccuracy
Exposure to claims
Ex:If the bill of lading indicates that
the goods were loaded in good
order and condition, but the
consignee receives them at the
discharge port in a damaged
condition, the consignee will be
entitled to make a claim for the
damage against the bill of lading
carrier.
 The bill of lading indicates that the goods were
loaded in 100 pallets,
but the consignee receives only 90
pallets at the discharge port.

The consignee will be entitled to

make a claim against the bill of lading
carrier for the shortage.
 Consequences of
inaccuracy
Loss of the right to limit liability
Loss of P&I cover
Loss of the right of indemnity from the
charterer
Criminal prosecution
2. Preparing for signing bills
of lading
The Master should be familiar with the provisions of
the Hague/Hague-Visby Rules
regarding obligations for the issuing and signing of
bills of lading demanded by the shipper.
These obligations will apply to most bills of lading,
but where the Hamburg Rules apply
there may be additional obligations of which the
Master should be aware .
For the Master, one of the most important aspects
of fulfilling these obligations is the inspection of the
cargo.
 Inspecting the cargo before
and/or at the time of loading
The provisions of the Hague/Hague-Visby Rules
place obligations on the Master to:
inspect the cargo’s apparent order and
condition to enable the Master to ensure that the
bill of lading is accurate in its description of these
items
inspect the cargo’s marks (to identify the
goods), and number, quantity or weight as the
case may be, to enable the Master to ensure that
the bill of lading is accurate in its description of
these items , unless there are no reasonable
means of inspecting the cargo.
 Dealing with damage found
during inspection/loading
If during inspection, it is found that the goods are damaged
or that packing is inadequate/insufficient, or that marks are
unclear or will not likely remain legible for the entire
carriage, the Master should:
take steps to prevent such cargo from being loaded. It will
be more difficult, even impossible if there are no means of
discharge, to have damaged goods replaced if they have
already been loaded
immediately inform the shipper and confirm in writing, that
the bills of lading will be appropriately claused unless
replacement goods are provided or the damage is made
good.
 3.Clausing bills of lading
The Master is obliged to issue bills of lading which
accurately describe the cargo. He must keep in
mind that he is also representing the third party
buyer of the goods, on whose behalf he is
responsible for clausing the bill of lading if
appropriate. Clausing the bill of lading with regard
to cargo marks, number, quantity or weight, or
with the words “in apparent good order and
condition”, “weight/measure/quantity
unknown” or “said to be” will not normally make
the bill of lading unacceptable for the purpose of
the letter of credit.
 Clausing in general
Clausing must be in conformity with the mate’s
receipt.
Some jurisdictions do not recognise printed,
standard form qualifications, the most common of
which being “condition, weight, measure, marks,
numbers, quality, contents and value unknown”. It
is therefore advisable to always clause a bill of
lading in the Master’s own handwriting or in typed
text. If the printed standard form does not include
the above words the bill of lading should be
claused according to what is unknown.
 Clausing in general
The Master should be aware of other cargo
specifications stated in the bill of lading.
The Master should act reasonably when deciding to
clause the bill of lading and do so within reasonable
time.
Clausing should be made on the face of the bill of
lading. If it can only be made on the reverse, the
face of the bill of lading should contain an
appropriate reference, e.g. “see reverse of this bill
of lading for Master’s clausing”.
 Clausing in general
Statements in the bill of lading which conflict with
printed standard form qualifications and/or the
Master’s clausing, should be deleted as it may not
be clear to the bill of lading holder whether the
clausing overrides and a Court may deem the
clausing null and void.
If there is a disagreement as to clausing, the
Master should notify the carrier immediately.
Assistance and advice can also be sought from
the P&I correspondent. A formal written protest
should be issued to cargo interests.
 4.Checks to be made before
signing bills of lading
Bill of lading on the form prescribed by the
charterparty or in the ordinary form for the trade.
All the contractual terms required by the
charterparty, appear in the bill of
Correct name of carrying vessel.
Correct description of voyage, i.e. the place of
loading and place of discharge. Bills of lading
covering the carriage from/to a place other than
the place of loading and discharge usually provide
for the place of receipt and/or the place of delivery
 Checks to be made before
signing bills of lading
Place of discharge is safely reachable by the
vessel and within any charterparty geographical
limits.
Correct place and date of shipment
Description of the goods as shipped – marks,
apparent order and condition, including packing
condition and adequacy, and number, quantity or
weight.
 Checks to be made before
signing bills of lading
Correct name of the shipper. The consignee may
or may not be named or the words “to order” or
“bearer” may appear This is usually of no
concern to the Master when signing.
Claused “Shipped on deck” if cargo so carried.
terms inserted as required by the carrier, e.g.
“free in, free out”,“liner in, liner out” etc. Such
terms set out the carrier’s period of responsibility
for caring for the cargo and who is responsible for
paying for the load and discharge operations.
 Checks to be made before
signing bills of lading
The number of original bills of lading stated to exist is
correct. The Master should only sign the correct number of
originals and should also ensure that each is identical and
marked or stamped original.
Bill of lading copies should be marked/stamped non-
negotiable copy.
The Master should sign in the place designated for
signature in the bill oflading or if there is no such place, at
the bottom of the bill of lading face. The Master should not
sign or stamp anywhere else in the bill of lading, especially
not next to the shipper’s description of the cargo as this as
may be interpreted as an acceptance of the description.