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Bill of lading related problems & masters responsibility - Chemical tankers procedure

The B/L is presented to the Master by the Shipper or the Agent in the port of loading, usually
three originals and one set of copies. The weight of the cargo loaded is determined by ship and
shore figures. Usually the shore figures are used on the B/L.

The following items have to be checked carefully before the B/L is signed:
Cargo destination and weight
Bill of Lading number
Date of issue: always the final loading date
Date of charter party, as indicated in the voyage orders
Information regarding ship: name, nationality, name Master, etc.
Method of payment of freight Freight as per c/p Freight prepaid Collect freight Other
Correct port of discharge.
Cargo commingling Clause

The three original Bs/L must be signed personally by the Master and not by a rubber stamp. All
other Bs/L prepared, apart from the agreed originals are to be stamped Copy Not negotiable.

A blank B/L must never be signed. In special circumstances by prior agreement from the
Owners the Ships Agent may be authorised to sign the completed Bill on behalf of the Master.
In this case clear instructions must be given by the Master to the Agent on the procedure to be
followed. On all occasions however the Agent before signing the B/L must contact the Master
concerned who in turn will advise if a clean B/L may signed or endorsed with the quantity in
dispute or a Letter of Protest issued in lieu of clausing the Bill of Lading.

If the Ships figures differ more than 0.5% from the Bill of lading figure, and clausing of the Bill
of Lading is not acceptable to the Shipper, the Master should contact the management office for
further instructions.

As soon as agreement is reached on all points, all Bs/l are to be signed by the Master. Usually the
Master will be provided with an original B/L, sometimes only a copy. The departure telex/e-mail
to the management office should include the type of Bs/l remaining on board.

A Bill of Lading endorsed with Freight Prepaid should never be signed without prior approval
from the Owners or management office.

The original Bill of Lading (or Delivery Note) covering the cargo, duly endorsed by Consignee
or Receiver has to be presented to the Master prior commencement of discharge. In the port of
loading the Master is often given an original B/L for the receiver of the cargo. If the Master is
able to determine beyond any doubt the identity of the Receiver in the port of discharge, he may
give him the B/L in exchange for a receipt. Otherwise, the original B/L is to be given to the
Agent in the port of discharge in exchange for a receipt in which he is obligated to give the cargo
to its rightful Receiver.

If an original Bill of Lading cannot be presented on arrival of the vessel the management office
is to be informed immediately and the Master should act according to the instructions given.

A solution could be the discharge of the cargo against the issue of a Letter of Indemnity (LOI),
provided the Owners have agreed to it. In such a letter the Charterer or Shipper guarantees to
hold the vessel/owners free of responsibility for the consequences for delivering the cargo
without the availability of an original B/L.

Another possibility which may be considered, after approval from Owners, is for the cargo to be
discharged into customs bonded storage, from which it will only be released to Receivers after
the original B/L is presented or LOI received.

When the Master signs the B/L, the Master does so, not on behalf of the Charterers or Shippers,
but on behalf of the Owners. The B/L is an Owners document, and it is the Masters
responsibility to ensure, to the best of his ability, that it is properly prepared and signed. This
applies whether the ship is employed on a Voyage or Time Charter.

The Charterers / Shippers cannot require the ship to agree to issue of Bills of lading with a
description of the cargo which is not in accordance with the cargo actually loaded. Furthermore,
we have to point out that situations like this give rise to potential prejudice of the Owner,s P&I
Cover, because the Club rules state that a claim arising from a bill of lading being issued, with
the knowledge of the Owner or Master, with an incorrect description of the cargo, quantity or its
condition, can only be paid at the discretion of the P&I Club Directors.

Masters are to ensure they/their officers always take steps/measures to satisfy themselves that the
condition of the cargo presented for loading accords with the description of the cargo in the
documents given to the ship - mates receipts / bills of lading / cargo manifest etc.

If the B/L contains inaccurate or misleading statements about the quality or quantity of the cargo
it covers, then Owners will be liable for the consequences, at least in the first instance. The
Masters main concern must be, to see that this cannot happen.

Therefore it is essential that the Master clauses directly on the bills the correct condition of the
quality and quantity of cargo if these two items have not be properly described in the document
presented to him for signing. If he wants assistance with the wording to be used in the clausing,
he should call the commercial office who may engage the local P & I representative for advice. If
this is not acceptable to Charterers / Shippers then they will need to find other cargo to load
which does accord with the description which they want to appear in the Bills of lading.

Masters are also to ensure that the current charter party for the voyage is onboard and understood
by all Officers, this includes notifications to be made when a potential dispute arises. The timing
of such notifications is critical in such cases, if time constraints due to onboard operations, a
telephone call to the Commercial Operator will suffice until a formal email with relevant backup
detail can be sent.

It may not always be easy for the Master to separate the differing responsibilities with regards to
the commercial operations of the vessel. If in doubt, always refer to your management office
/commercial operator for clarification and support.