TT Talk - Mis-release of Shipments by Transport Operators and Ocean Carriers
The Club has recently seen an increase in claims against transport operator Members for release of cargo without presentation of the transport operator bill of lading.
We offer guidance below to transport operators to prevent mis-release of shipments by ocean carriers and terminal operator
- Must not use the same bill of lading number as the ocean carrier
- Must receive the negotiable bill of lading between the transport operator and the shipper or consignee and payment of ocean freight prior to releasing the negotiable bill of lading between the transport operator and the ocean carrier
- Should instruct the ocean carrier in writing not to release the shipment to the consignee until the transport operator authorizes them to release the cargo. Further, this should be done on all shipments which have arrived at the discharge port
- Must not present ocean carrier’s negotiable bills of lading until they have received their negotiable bill of lading and ocean freight.
- Must obtain the transport operator negotiable bill of lading, payment of ocean freight and ensure the cargo is released by customs prior to instructing the terminal operator to release the cargo to the consignee
- Must never assume that just because the consignee is ready to take delivery of the cargo at the discharge port, that all negotiable bills of lading have been presented, that ocean freight has been paid and received and that the shipper has been paid
For further guidance, please refer to TT Club's Stop Loss 2 "Release of Cargo Documents" or speak to your TT Club contact.
As readers will well know, international shipments move under bills of lading issued both by transport operators and ocean carriers. These bills of lading are frequently independent of each other and in many cases the ocean carrier releases the cargo to the consignee under its bill of lading in circumstances where the transport operator bill of lading has not been presented. This can expose the transport operator to claims from cargo interests for the full cargo value if the shipper has not been paid by the consignee.
A further complicating factor is that straight non-negotiable bills of lading and waybills do not need to be submitted to the carrier or terminal in order for the consignee to take delivery.
Ocean carriers do not have a contract with the transport operators "shipper" so they have no way of knowing or establishing easily if the shipper has been paid by the consignee or if the transport operator bill of lading has been submitted prior to the shipment being released.
To avoid these claims, it is imperative that proper procedures are in place to prevent one party from releasing the cargo when the other party has not received the bill of lading.
You may also be interested in:
Learn more about how port authorities and terminal operators are facing an increasing risk of insurance claims relating to storm damage.
Learn more about the risks of abandoned cargo as we reflect on the Beirut explosion of August 2021.