TT Club: Acting on climate change
The predicted impacts on ports and waterways of climate change present real risks to local, ...
AGLphotoproductions
“Switching” bills of lading is a very common procedure in international trade, where an issued bill of lading is substituted by a new set called switch bill of lading.
During my years within the logistics industry, I have been frequently asked questions along the lines of “can I change the shipper and consignee’s names within a bill of lading?” or “what is a switch bill of lading for?”.
Imagine a scenario: company A based in the UK sells gardening tools worldwide which are supplied by company B based in China. Company C in the US places an order to purchase some of company A’s products. As usual, company A contacts its freight forwarder to assist with the shipment from China to the US.
Once all necessary customs clearance procedures at the loading port are completed, the freight forwarder issues a bill of lading and sends it to company A. Up to here, all normal.
The shipper and the consignee under this bill of lading are company B and company A, respectively. However, company A does not wish the ultimate buyer in the US (company C) to know the name of the supplier in order to avoid any commercial deals between them. By switching bills of lading, company A can hide the name of its supplier so that, for the new set of bills, company A becomes the shipper and company C the consignee.
Can the final buyer know if the bill of lading has been switched?
Switch bills of lading do not contain any information that indicates that they are not the initial bills. However, the consignee or ultimate buyer can ask the shipping line whether the bills were switched or not, and the shipping line can provide that information without disclosing any further details.
Also, a new invoice and packing list should be issued showing company A as supplier and company C as invoice, not only to avoid exposing the supplier’s identity but also to keep consistency with the new set of bills of lading.
What else can be changed?
The following items can be modified in the new set of bills:
- shipper, consignee and notify party details
- cargo description, i.e. “tools” instead of “gardening tools”
Any details other than the above must remain the same as per initial bill of lading. Therefore, port of loading (POL), port of discharge (POD) or weight/number of packages cannot be changed.
It is extremely important that the issuing date is the same in both bills of lading.
Who can request to switch bills?
The switch bill can be issued only if requested by the cargo owner or principal. In other words, since the bill of lading represents ownership, only the company holding the full set of documents can ask for switching bills.
Who can approve it?
The switch of bills must be approved by the carrier or freight forwarder who needs to carefully consider the differences between the initial bill of lading and the proposed switch bill of lading. Only the carrier or freight forwarder are allowed to sign a bill of lading.
Once switch bills are approved and before releasing them, the initial bill of lading must be out of circulation so that there is only one set of documents in force.
Is there any time limit for switching bills?
The carrier should issue the switch bill of lading once received the initial set of documents and before the cargo arrives to port.
In most cases shipping lines do not accept a switch bill of lading requested later than three working days prior arrival. However, some shipping lines may require earlier notice for certain destinations so I highly recommend to check with them and ensure the switch bill of lading is issued within their timeframe. This will avoid incurring additional storage and demurrage charges at destination port.
Where can a bill of lading be switched?
This will depend on the carrier coverage. If they cover all ports, bill of lading may be switched anywhere for shipments from anywhere to anywhere. The key point is that the shipping line or freight forwarder has an office in the country where the switch bill of lading is being issued.
This is a guest post by Olatz Muruaga, a senior NVO coordinator at a UK-based freight forwarder
Comment on this article
Andrew Robins
April 05, 2017 at 4:58 amI would be very surprised you could use a carrier Switch b/l or an agents Switch h b/l for a Shipment from China to the US. I understand the need to switch after customs clearance out of China to comply with China regulations for Export. But you also have the AMS filing in the US where they will want to see the actual true shipper and consignee.
As we are talking about changing various documents, such as Invoices, packing lists etc. There is an element of fraud in these shipments even to countries other than China and the US and in most case we see a Certificate of Origin requirement.
In discussions with Maritime lawyers they advise us to warn our members to steer clear of the Switch b/l business altogether.
Not all is above board, as in some cases it is designed to circumvent duties or reduce the amounts to pay on import taxes.
Most Shippers like to work with actual importers and not the middlemen, so they are prone to hiding their details inside the shipments for the eventual owner of the goods to find the supplier.
We have seen cases where the original b/l’s have not been secured and a third party is claiming ownership of the goods, or the value of the already released goods.
So all goes up in smoke eventually for the middle men, either by the owner or Customs.
Andy
WCA
Cristobal Casado
April 09, 2017 at 7:52 pmHi,
Freight terms can also be changed in the MBL/HBL from collect to prepaid if company A sold the products to company C using any of the incoterms involving that ocean freight is paid by the seller ie CFR, CIF, DAT, DAP, etc
Regards
Vinay
April 13, 2017 at 2:19 pmThe United states will definitely not allow switch bills due to the customs requirements. Carriers will not switch bills of lading for any US-bound cargo.
Another consideration not mentioned here for switching are traders – cotton being the prime example and in general commodity trading. These middlemen purchase goods and act as intermediaries to sell the same at a higher price.
irvan
September 04, 2020 at 2:35 amhi @vina
Do you have any source from the US Custom regarding regulation of switch BL to US destination?
New
September 19, 2017 at 3:24 amWhat I want to know is, My company is in dubai, and I have customer in Ethiopia / Djibouti who want to buy from me. The products that I am suppling are from Sudan. How can I send the goods from Port sudan to Djibouti while my supplier in sudan still assumes I am taking the item to Dubai. Please help me?
Capt.Md.Hedayetul Islam
February 19, 2018 at 11:36 ami am going to load cargo iron ore pellets at Sohar port in Oman and the same cargo to be discharged at Sohar in Oman as well in deferent berth, (say 0.5 NM away from two berth) and individual loading and discharging port agent has been appointed for which what sort of B/L to be issued and is there any opinion for on board Master to protect Owner interest?
Arya
May 05, 2018 at 9:35 pmI have switch the BL to Singapore and the freight charges will payed in Singapore . what term i can use in the OBL freight prepaid?or collect? Anybody can give me the answer ?please asap.
Mahaveer Chand
June 20, 2018 at 4:52 amI found this post very useful for Marine students, keep posting info like this. Kindly let me know how to subscribe for this blog because i need regular marine updates like this from you. Keep touch with my websites http://www.samsmarine.org
Neelesh Purav
September 07, 2018 at 4:02 amI would like to know, whether the leasing Company can be mentioned as Consignee in switch Bill of lading, as the machine is leased by the actual buyer.
Subbarao
November 09, 2018 at 1:00 pmIn the procedure of triangular BL, the company which does BL switch , are they liable to pay custom duty , even if the containers ( goods ) does not arrive in their port.
Laxminarayan
November 17, 2018 at 4:45 amOur Principal will supply the goods under CIP Basis. When I am doing switch bill of landing as CIP the principal insurance coverage will be ok or do we need to cover separately.
Ex.
Principals (A)- Bill to India (B) and Ship to Hong Kong (C) – under CIP
After handover shipment to forwarder. Forwarder will crate Switch bill of landing
India (B) to Hong Kong (C) – under CIP.
The Insurance coverage who will be responsible – A or B
Pl advice.
mary
January 11, 2019 at 11:59 pmi am the original shipper of the goods and i mistakenly allow to switch the bl while my buyer still dont make payment.
on the carrier system, bl is already updated as switched and 1st leg is surrendered. the vessel already arrived the destination but my buyer still dont pay me.
how can i take back my cargo in this case?
example:
1st leg bl – shipper: A
cnee : to order
notify: B
2nd leg bl – shipper: B
cnee/notify: C
*note – since 1st leg bl is surrendered and bl alr switched. i hold the original switch bl..
Anup Zode
May 15, 2019 at 3:41 amIf my high seas sale buyer is in india and high seas Seller is also from india and i am the consignee in the original BL receiving the goods from say UK so can i switch the BL in this case where HSS Seller and buyer is from the same country?
Rahel Bekele
December 31, 2019 at 5:22 amReally great lesson! Thank you for the provider.
Faisal
January 23, 2020 at 1:09 pmConsignee in bl is the switch requesting party.
Q1. Can consignee request to put Notify party as shipper (whereas Notify party is not same as consignee ).
Q2. Can bl be Switched at the same place / country where from the shipment is generated.
Please guide, with any law / process to it.
Supritha
May 19, 2020 at 10:05 amWhich of the following action would be more appropriate when a sequence of trades happen for one particular shipment by sea among various parties?
1. Surrender the Original B/Ls for each completed trade and get new set of B/Ls for following trade
2. Amend the Original B/Ls for each trade to reflect the changes of the following trade
3. Switch the Original B/Ls to get new set of B/Ls for following trade
4. Any of the above
Haresh
September 22, 2020 at 12:45 pmIf vessel have not yet fixed any next port than port clearance High Seas.