Cargo release without Original Bill of Lading – COVID-19

The pandemic that is COVID-19 is sweeping the world, disrupting global trade patterns like never before.. When one part of the globe is starting to settle down, the other part starts or spikes..

No one has any real idea of how long it will take for the world to get back to normal and its after effects..

Shipping lines, importers, exporters, ports, terminals, Governments, and insurance companies have all been affected by the pandemic and continue to look for ways to make the business of shipping as easy as possible considering the severe constraints everyone is going through..

This issue is also putting some of the documentary issues and cargo releases to the test and leaving the industry to face the unknown..

One such issue that is affecting business is the transmission and handling of Original Bill of Lading..

As you know, the bill of lading, especially a negotiable one, is issued as a physical paper document signed and stamped by the carrier, usually as 3 originals..

This bill of lading is then physically couriered to the consignee or receiver at destination for release to the authorised party..

With the lockdown in various countries around the world due to COVID-19, there are severe restrictions for export customers to get original bills of lading after the cargo has been loaded on board..

Similarly for cargo that has arrived/arriving at a port of discharge during the lockdown period, importers may not get the original bill of lading on time or worse still if an original bill of lading is lost in this lockdown scenario..

There are a few options that customers can exercise to secure release of cargo without Original Bill of Lading..

 

The obvious steps

1. If the shipment has just happened and the bill of lading has not been issued as an Original yet, the shipper and consignee can discuss options and check if
   • The bill of lading can be issued as a Sea Waybill of Lading which means there is no requirement for an original bill of lading and a Sea Waybill can be issued electronically ;
   • The bill of lading can be issued as a Straight Bill of Lading and originals surrendered at the POL itself (or place of issue) and the POL can send a “Telex Release” to the POD agent which negates the requirement of an Original Bill of Lading to be submitted at POD ;
   • If a Letter of Credit is involved and it calls for the requirement of a Negotiable bill of lading, the shipper, consignee and banks involved can discuss and come to an agreement on amending this requirement and choose one of the above ;
   • If a Negotiable Bill of Lading is absolutely required, then check if the shipper, consignee, shipping line and banks involved can be electronically connected via the various eBL platforms available.. There are several electronic bill of lading options available now, which can replace a traditional paper bill of lading ;
2. If these can be done, then everyone can handle the transaction without the requirement of an original bill of lading ;
3. Where possible, avoid the use of House Bill of Lading as it now involves another bill of lading to be sent/received

 

Alternative steps for cargo release without original bill of lading

If none of the above possible and the Original Bill of Lading has already been issued to the shipper and the shipper has no way of sending it to the consignee or their bank or the original bill of lading has been sent but is in limbo somewhere, you may still be able to discuss with the shipping lines and banks and come to an agreement..

Some of the shipping lines are allowing the release of cargo without presentation of original bills of lading subject to a few conditions such as

• Color scanned copies of the Original Bills of Lading with the relevant endorsements for release ;
• Accompanying Letter of Indemnity signed and stamped by the shipper or consignee on the bill of lading (with or without bank guarantee) similar to a situation if an original bill of lading is lost ;
• Letter from Bank and/or Courier company as a supporting document if the original bill of lading is sitting with either of them ;
• Some lines may also allow release if all the originals issued for a bill of lading has been surrendered with or without endorsement

The issues relating to the Original Bill of Lading can be further complicated if there is an Original House Bill of Lading and an Original Master Bill of Lading..

Can these two come into play at the same time..??

Sure..

An NVOCC or Forwarder issues their HBL (House Bill of Lading) showing the actual shipper and consignee on their bill of lading and this could be any of the types of bills of lading – Sea Waybill of Lading, Straight Bill of Lading, Negotiable Bill of Lading.. So Original HBL could be issued as well..

For the same HBL, the NVOCC or Forwarder could also get an MBL (Master Bill of Lading) showing the NVOCC or Forwarder as shipper and their agent at POD as the consignee..

So if both originals get stuck, then there will be additional risks, costs and processes involved in the release of the goods..

 

Conclusion

From the time ship masters started issuing bills of lading, it has become one of the most important documents in global trade.. If this document is not available due to whatever reason, that particular trade grinds to a halt affecting those involved in it, resulting in unnecessary costs etc..

This situation with the COVID-19 is a tricky and unprecedented situation for everyone with several unknowns all up in the air.. But the good news is that there are several options available to the trade and something that suits everyone can be chosen..

What has been your experience thus far with regards to this specific issue..?? 

 

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