Whereas the Charter Party is a contract negotiated between the parties on the basis of freedom of contract, the Bill of Lading is a document, which springs in to existence upon completion of loading and is binding between various parties, who have not contracted with each other, on the basis of the clauses of the Bill of Lading and compulsory law, such as the Hague-Visby Rules.

Types of Bills of Lading

1. Congen B/L – used in combination with Charter Parties

2. Conline B/L – used in liner trade

3. Through B/L – used in trades with on-carriage to final destination

4. Combined Transport B/L – used in trades with different means of transport (ship – another ship – rail – road)

Many liner companies use their own Bills of Lading. Although they may be differ in layout and content these Bills of Lading are mostly based on the standard Conline B/L.

The Bill of Lading has three important functions:

1) It is evidence for receipt of the goods on board at a certain date / place and in a certain condition;

2) It is evidence of the contract of carriage between the carrier and the Bill of Lading holder.

3) It is a document of title to the goods shipped. The holder of the B/L is entitled to the delivery of the cargo. The B/L is a negotiable document. It can be transferred to other parties during the voyage.

Various parties to the bill of lading

As explained above the Bill of Lading springs in to existence, is binding between various parties, has three functions and is subject to compulsory law.

When goods are sold there is a seller and a buyer, who become the shipper and the consignee in the B/L. When the goods are traded on a letter of credit, the banks will also come in to play as parties. It is also possible that the goods are sold one or more times during the voyage, which means that the Bill of Lading is changing hands.

On the other side of the string is the carrier. Primarily this is the shipowner, but if other names appear on the face of the Bill of Lading or if the Bill of Lading is signed on behalf of the Charterer, those other parties will be the carrier.

The problem about Bill of Lading law is that every case will be considered on the prevailing circumstances and many countries have different laws about the interpretation of the Bill of Lading.

Precautionary measures at RaetsMarine on Charterers Liability

We have a warranty in our standard terms and conditions that the Bills of Lading need to be issued and signed by or by authority on behalf of the Master.

The reason for this warranty is simply to unravel the complexity of the Bill of Lading, and more importantly the liabilities resulting from it. Our rates are a reflection of the risk. It must therefore be clear from the beginning which liabilities we must insure, hence our practical solution with the Bill of Lading warranty.

The Charterer of a vessel may control the loading, stowage and discharging of the cargo, make stowage plans, instruct the Master, appoint superintendents and agents, etc etc, however, the responsibility for navigation, safety, compliance with ISM and ISPS and seaworthiness will remain with the Master and the Shipowner. Those responsibilities cannot even be delegated to the Charterer. Just for this reason the Charterer should never voluntarily choose to become the carrier under the Bill of Lading.