BILL OF LADING

DELIVERY OF THE GOODS

Introduction

When a person, who is the holder of a bill of lading, does not want to negotiate it further, but wants to receive the goods himself, he will present himself to the master or the agent who will check the holder's identity and check if the freight and all charges have been paid.

If everything seems to be in order the master or the agent will sign and date it or, in some countries, the agent will exchange the bill of lading against a delivery order which will allow him to receive the goods. (See further, Documents used by Incoming Goods, Delivery Order - D/O.)

Check local uses and customs. In many harbours the arrival of a ship carrying goods is announced in the local specialized papers.

If the bill of lading has been endorsed, the endorsement should be checked.

Legally, the master is obliged to deliver the goods to the first person who presents him an original bill of lading, providing of course that the freight has been paid.

As long as the freight has been paid and nobody presents him an original bill of lading, he may retain the goods on board but he should avoid that the ship be retained longer than necessary or that the ship enters unnecessarily into demurrage.

If the freight has not been paid, the master does not have the right to sequestrate the goods on board as no one should ever take the law into one's own hands. He has to go to a court of law and ask for the goods to be seized and eventually sold so that he can be compensated.

Note

Checking the bill of lading by the master or the agent for its contents re identity of the receiver, endorser, payment of freight and other charges, cargo and quantities to be discharged or that have been discharged is called "sighting the bill of lading".

Once the receiver takes delivery of the goods, the carrier looses his lien for the freight.

Several Holders Present Themselves

At Different Moments

If two holders of the bill of lading present themselves at different moments, the master or the carrier will be covered thanks to the words at the end of the bill of lading: ".. one of which being accomplished the other(s) to stand void".

At the Same Moment

If several holders of the bill of lading present themselves at the same moment, check the local or national legislation on that subject.

Usually, the following steps are followed:

Inform or consult the ship owner's P&I Club (the correspondent or preferably the head office who will inform the correspondent).
Leave the bills of lading with an official body such as a court of law, the consul, or the local authority to settle the dispute.
Discharge the goods into a warehouse/ silo/tank, etc. in care of a custodian who will hold the goods until the dispute has been settled and the freight and charges have been paid.

Nobody presents himself

In case the consignee does not present himself, the master can do the following:

If the freight has been paid, go within reasonable time, to a court of law to ask for the goods to be discharged and warehoused. The goods should only be released on payment of all outstanding charges such as demurrage, discharging costs, warehousing costs (usually for the receiver of the goods).
If the freight hasn't been paid and the goods remain unclaimed, go to a court of law or any other local authority and ask for the goods to be seized and to be sold (eventually by auction) so as to recuperate the freight and all other outstanding charges. If the proceeds of the sale are insufficient, the master still has a right of recourse against the shipper, the only known person in the contract of carriage.
The goods may also be freely discharged if this is provided in the bill of lading or the charter party. See CONLINEBILL - Clause 9 - Loading and Discharging:

"Loading and discharging may commence without previous notice".

"If the Merchant or his Agent fails to take delivery of the cargo the Carrier's discharging of the cargo shall be deemed fulfilment of the contract of carriage. Should the cargo not applied for within reasonable time, the Carrier may sell the same privately or by auction".

In this case there will also be costs for discharging, warehousing, for watching the goods, etc.

Loss of the Bill of Lading

If the bill of lading has been lost or stolen, the receiver of the goods should object to the master or the owner and go to a court of law to obtain an "order to deliver". The receiver must be able to prove that he was the rightful holder of the original bill of lading. He will also have to pay a caution for eventual juridical consequences.

It is of good practice if anybody fails to present an original bill of lading to inform the P&I Club.

The Bill of lading has not yet Arrived

It often happens that the ship arrives into port before the bill of lading. If the Bill of lading is simply delayed, the master should do the following:

Inform the P&I Club;
Ask the receiver for a letter of indemnity backed with a bank guarantee
Deliver the goods with the Owner's and P&I Club's agreement. (See also Documents in Connection with Carriage by Sea, Letter of Indemnity and Bank Guarantee.)

Notes

If the master delivers the goods to the wrong party without production of an original and signed bill of lading, the carrier (owner or disponent owner) will be held responsible and have no recourse from the P&I Club or from the court. The ship may even be seized and sold to indemnify the rightful owner of the goods.

Quick Reminder

To receive the goods with a signed B/L present yourself to the master or the agent. They will check your identity and check if freight and all charges have been paid.

The B/L will either be signed or you will receive a delivery order in exchange.

Check eventually the local papers.

As far as possible, goods should be delivered with the necessary dispatch. Always avoid demurrage.

SEVERAL SCENARIOS ARE POSSIBLE:

Several holders present themselves:
- at different moments: B/L shows "... one of which being accomplished ..."
- at the same moment:
  - inform P&I Club;
  - leave B/L with an authority;
  - put goods in care of a custodian.
- Nobody presents himself:
  - If freight is paid go to court of law to warehouse goods;
  - If freight is not paid go to court of law to seize goods and to sell them;
  - If B/L or C/P provides, discharge goods freely.
  LOSS OF THE BILL OF LADING
  
  • object to master or owner, go to court of law, ask for order to deliver.
  
  BILL OF LADING HAS NOT YET ARRIVED
  - inform P&I Club
  - ask for letter of indemnity backed with bank guaranty
  - deliver the goods with owner's and P&I Club's agreement.
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