BILL OF LADING

                                                  Bill of lading 

                     - is a receipt for goods either received or shipped on board.

                     - is good evidence of the existence and terms of contract between the shipper and carrier.

                     - is a document of title, signifying that the holder has the LEGAL RIGHT TO POSSESSION of goods it describes.

                     Bill of lading and related documents:

            1.      Exporter / shipper makes a goods sales contract with an overseas buyer / consigner.

            2.      Carrier (ship) is chartered, proceeds to loading port arrives at berth.

            3.      Shipping note containing details of goods (as stated by the shipper) is presented to chief mate or MASTER.

            4.      Goods are loaded on ship and are tallied.

            5.      Chief mate compares ships tally or in taken cargo tonnage with details on shipping note and issues mate's receipt from ship's TRIPLICATE BOOK. Master's receipt contains accurate and truthful details of quantity and condition of goods i.e. their "apparent order and condition" with reference to any shortage or damage.

            6.      Shipper obtains a full set of "BLANK BILLS OF LADING" from carrier, types in detail of shipped goods exactly as stated in mate's receipt. Set most often comprises of 3 originals.

            7.      Shipper tenders all originals bills for signing on behalf of the carrier i.e. by carriers head office, agent or ships master.

            8.      Person authorized to sign, carefully checks details inserted by shipper to see that they correspond to those in ship's copy of mate's receipt, stamps / writes any required endorsements, then signs all original bills in set.

            9.      Full set of signed original bills is issued to shipper together with copies as required. Master retains one copy of bill of lading as on board as "captain's copy".

            10.    Ship sails from loading port.

            11.    Shipper sends full set of bill of lading to consignee. At least one bill should be posted in a later post than others. In case all are lost / stolen.

            12.    Ship arrives at discharge port.

            13.    Consignee or receiver acting as consignee's agent proves his identity to port agent and present one original bill of lading duly endorsed to him. Freight, demurrage or other charges owed to the carrier are paid to the agent.

            14.    Agent stamps presented bill of lading "ACCOMPLISHED" all other original bills of lading in set are now legally VOID. Agent issues delivery order to consignee or receiver to enable collection of goods.

            15.    Delivery order to warehouseman (ship and goods are released into possession of consignee or receiver and become legally delivered).

                     The above is a simplification of procedure in modern shipping operations. Documentary credit system is often buyer and this complicates the journey of the bills of lading, since the original bills must be transferred to specified banks as security for their credit advances, made out in such a way that each bank involved has a good legal title in the goods represented by bill of lading.

                     Obligations of carrier and shipper :

                     There sets of rules are in the use in international transport industry which contains minimum terms and conditions and where a bill of lading is issued.

                     * The Hague rule.

                     * The Hague Visby Rule

                     * The Hamburg rule

                     Carrier's obligations : (Under Hague Visby Rule)

                     * To ensure vessel's seaworthiness.

                     * To care for the cargo.

                     * To issue a bill of lading where the shipper request over carrier must before and at the beginning of voyage exercise due diligence to (SEAWORTHINESS)

                     * Make the ship seaworthy.

                     * Properly man, equip and supply the ship.

                     * Make the holds, refrigerating and cool chambers and all other pants of the ship in which goods are carried fit and safe for their reception carriage and preservation.

                     Care for the cargo :

                     The carrier must 'properly and carefully' load handle, stow, carry, keep, care for and discharge any goods carried. Unlike seaworthiness this duty extends throughout the voyage and implies a greater degree of care than exercising due diligence. Following are certain examples where cargo is not taken care properly.

                     * Contamination of other goods.

                     * Inadequate or no ventilation

                     * Dry cargo damaged by liquid cargo.

                     * Vehicles secured only by their brakes.

                     The carrier must have a proper system for looking after the cargo when stowed. He has a duty to use all reasonable means to ascertain the nature characteristic of the cargo and to take care of it accordingly, although the shipper should give a special instructions where special care is required.

                     Obligation to issued bill of lading :

                     After receiving the goods into his charge, the carrier, the master or the carriers agent must if the shipper demand issued a bill of lading to the shipper.

                     * All leading marks for identification of goods as stated by shipper before loading provided these are visible on the goods or their coverings.

                     * Either the no. of package or pieces or quantity of weight as stated by shipper

                     * the apparent order and condition of goods

                     * the carrier or master or agent need not insert any inaccurate statement on the bill of lading or give any details which he cannot reasonably chock

                     * Any bill of lading thus issued will be prima facie evidence of receipt of goods by the carrier as described but proof to the contrary will not be admissible if bill of lading is transferred to a third party in good faith.

                     * Any bill of lading issued after loading must be shipped bill of lading if the shipper demands, provided he surrenders previously issued document of title.

                     P & I club cover for liabilities :

                     The contract of carriage of most ship owner carriers incorporate either the Hague or Hague Visby rules, and in those rules. Provided such a contract is used, then even where a count with proper jurisdiction refuses to recognize the defenses under the rules the ship owners liabilities will be covered by his P & I club. However where he uses a contract incorporating terms less favorable than those of Hague or Hague - Visby rule the club will normally refuse to cover liabilities arising under the contract.

                     Masters should therefore ensure, especially where less favorable rules like Hamburg rules are mentioned in the contract terms as applying, that the owners, P & I club approves of their incorporation.