Bill of lading (B/L)
Bill of lading are the most important document of nearly all contracts of carriage by sea.
Once issued, a bill of lading:
- Acts as a receipt for the cargo shipped;
- Represents the contract of carriage between the receiver and carrier; and
- Is a document of title for the goods in question and, in turn, a negotiable instrument.
Legal issues surrounding B/L are quite vast, as are the international conventions that have been created by the shipping community to address it. These international convention includes the Hague (dated 25th August 1924) and Hague-Visby (dated 23rd February 1968) and Hamburg Rules (The full title of the convention – United Nations Convention on the Carriage of Goods by Sea 1978).
Ship & Shore discrepencies
All the above-mentioned conventions require that bills contain accurate and true information as to the quantity and condition of the cargo loaded.
However, in my experience, it is virtually impossible for the ship quantity to be exactly the same as the shore quantity. The reason which could be attribute to these scenario are the likes of swelling and rolling of the vessel, the accuracy of the measurement equipment among other things.
Hence, national standards usually in place (on shore) to ensure that the declared figure on board the export vessel are closest to the true figure. And this figure are usually the by metering station.
Maybe I’ll discuss on metering accuracy in near future.
The priority ranking of available figure normally would be as follow:
- Shore Meter figure (Custody level meter)
- Shore tank figure (Custody level measurement : Dip tape and thermometer must be calibrated and well maintained.)
- Ship figure (Tank level on board export tanker)
Meaning, if figure (1) is available, then it would be used as the Bill of Lading figure, if not, then figure (2) would be used, with figure (3) as the last resort.
While no method is beyond repute, more often than not, vessel master will issued their Letter of Protest (LoP) nonetheless, for both ship gained (ship received more than on shore recorded) or ship loss (ship received less than on shore recorded).
It is the most regular LoP I’ve received so far in my career.
Typically, the discrepancy are less than 0.30%
Early Departure Procedure (EDP)
Why is it used?
Most of the time, EDP is applied when the vessel need to leave the loadport as soon as possible to chase another LDR (Loading Date Range) at another loadport or need to arrived at their discharge port on a certain DDR (Discharge Date Range).
So, in order to speed things up at the loadport, EDP can be applied, which by definition, the ship can depart from the loadport prior to the Bill of Lading has been issued, and sometimes even before the quantity of cargo has been officially determine.
However, in my experience, the ship will depart once we confirmed on the quantity of cargo loaded, and the vessel master agreed with the loaded figure (discrepency of less than 0.30% against the ship figure).
Personally, I would prefer the EDP to be applicable only for shore terminal loading and not for Marine terminal loading operation (FPSO /FSO) since during marine terminal loading operation, the ships (FSO/FPSO and the export tanker) is side by side. And to handover the loading documents and sample would only take around 30 minutes. Meanwhile, shore terminal to ship would takes around 3 hours (generally speaking).
While EDP is said to be an option, but there is heavy pressure on an owner to comply. Terminal are keen to have maximum use of their facilities and minimum delay to waiting ships. Charterers are worried about meeting discharging schedules as well as other complication with regards to laytime and demurrage or even deadfreight.
It is a good practice, in the event of EDP, we share the draft Bill of Lading for the vessel master to check on confirmed on all the details (minus the quantities,quality loaded) are in order. Since they would not see the actual documents on board later on.
So, Who sign the Bill of Lading
As I mentioned before, it is a good practice to share the draft Bill of Lading with the vessel master beforehand, for the master to check on the details prior the loading completion, or even at times prior to the loading commencement.
Why? Because the vessel master is the one who supposed to sign the Bill of Lading. And since the EDP is applied, he won’t be able to do so.
In this case, the master’s authorization to the agent should be limited to the signing and releasing of the bills of lading only (also at times, the manifest, master receipt, etc). In order for the documents to carry any validity, the vessel master Letter of Authorization (LoA) should be in place.
Master will then again check the documents even after their agent signed on behalf.
Among the important information to be recorded should minimally includes the following:
- the quantity of cargo said to have been loaded;
- the description and condition of cargo;
- the date;
- voyage details
- destination (discharge port) – especially important for domestic shipment(since as a proof that you doesn’t need to pay export duty), might be less important for export (since you need to pay export duty)
EDP would be an option if you’re short on time. But then again, it comes with some risk, but always manageable. But, if you’re a charterer and thinking about implementing EDP, make sure that both documents and sample are not required on-board at loadport. There is no point in EDP with sample on-board. You might as well wait for the documents.