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SWITCH BILL OF LADING

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SWITCH BILL OF LADING

Anonymous # 18. June 2010, 11:16

Zac writes: Hi Mr Old Man, Plse enlighten me with the concept of switch BLs. I believe there are inherent risks involved such as frauds. If you have, would you mind sharing a few cases you know to help my understanding? In event where a cargo shipment is made to carry from port 1 to port 2 by sea carrier, and then from port 2 to port 3 by another sea carrier. In this case, if BL’s destination show port 3, then switching BL isn’t required, right? But if shows port 2, then as financing bank, how should I be more vigilant since BL switching is needed (my cust is the charterer)? I hope its not too much for the weekend. Appreciate your advice.
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Mr. Old Man # 19. June 2010, 01:20

Hi Zac,

I’m afraid that my explanation will not good enough to meet your requirement, hence, I quote here below an article of P&I regarding Switch Bill of Lading which I hope it can be helpful.

Regards,
Mr. Old Man

QUOTE
Switch bills of lading

The practice of issuing switch bills of lading is increasing.
What are they, why are they issued, and what are the risks?
A “Switch bill of Lading” is issued by, or on behalf of, the carrier in substitution for the bill of lading issued at the time of shipment.

There are number of reasons why switch bills are issued. The common link is that, from the point of view of the holder of the bills, the first set of bills is unsuitable under one of the sale and purchase contracts for the goods in question. Carriers often feel under commercial pressure to issue switch bills in order to satisfy the requirements of the customers. Examples of reasons why switch bills are issued are that:- the original bill names a discharge port which is subsequently changed (e.g. because the receiver has an option or the good are resold) and new bills are required naming the new discharge port: a seller of the goods in a chain of contracts does not wish the name of the original shipper to appear on the bill of lading, and so a new set is issued, sometimes naming the seller as the shipper. A variation on this is where party does not wish the true port of loading to be named on the bill; the first set of bills may be held up in the country of shipment, or the ship may arrive at the discharge port in advance of the first set of bills. A second set may therefore be issued in order to expedite payment, or to ensure that delivery can take place against an original bill; shipment of goods may originally have been in small parcels, and the buyer of those goods may require one bill of lading covering all of the parcels to facilitate his on sale. The converse may also happen i.e. one bill is issued for a bulk shipment which is then to be split.

Where switch bills are issued, the first set should be surrendered to the carrier in exchange for the new set. There is usually no objection to this practice. However, the switch bills may contain misrepresentations e.g., as to the true port of loading. If a receiver suffers loss as a result of this, then the carrier and his agent may be at risk.

In practice the switch bill set is often issued not against surrender of the first, set, but against a letter of indemnity. That may happen in any of the examples given above, and clearly will be the case where the first set has been delayed. Switch bills of lading issued in these circumstances may leave the carrier and his agents extremely exposed. The switch bills may be negotiated to a buyer who expects the goods to be delivered to him. The shipper holding the first set might not yet be paid by his buyer. The carrier may therefore be faced with claims from the shipper holding the first set of bills, and from the holders of the second set. The carrier will probably deliver the goods to one of these parties, and be liable to compensate the other. Any indemnity which the carrier has obtained may well be worthless.

In a recent case decided by the High Court of Singapore (Samsung Corporation v Devon Industries Sdn Bhd [1996] 1 SLR 469) a vessel had loaded a total cargo of 10,500 MT of soya bean oil. It appeared that the goods had been shipped by a number of different shippers in small parcels. The plaintiffs were the holders of bills of lading covering two parcels of 1,000 MT and 1,500 MT respectively. They tendered the shipping documents to the defendant buyers, who did not pay for the goods. The buyer was also the charterer of the vessel, and arranged for the shipowners to issue what were described as “global” bills of lading naming the buyer as the shipper. The defendants were able to negotiate those bills of lading, and were paid for the cargo (which they had not themselves paid for). In an action brought by the seller to recover the original first set of bills held by the buyer, the court said that the ship agent (combined with the buyer) had unlawfully issued a second set of bills of lading in abject disregard of the sellers’ interests. The buyer had acted fraudulently, with the co- operation of the ship agent.
Although the court did not expressly address the liability of the shipowners, or their agents, for having issued the second set of bills, there is little doubt that the owners and their agents would have faced claims from the holders of either the first set or the second set. There is no mention in the report of this case of whether the second set was issued against a letter of indemnity from the buyer/charterer, but the buyer was in dire financial straits, and so any letter of indemnity is likely to have been worthless. In any event, a letter of indemnity given in these circumstances may well be null and void.
UNQUOTE
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Anonymous # 19. June 2010, 14:05

Anonymous writes: Thank you, Mr Old Man. May I know the source of your article? Second, based on your trade experience, besides surrendering the original BL in exchange for 2nd set, what is the common practice that shipowner/agent takes to protect/indemnify themselves against unlawful buyers/charterers since it could be risky (eg. the case above)? As financing banks, we are also concerned since we have a financial interest in the said cargo. Sorry that I have to write here as I do not know how to start a new post.
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Mr. Old Man # 20. June 2010, 08:04

1) It may be available here: http://www.marinacivil.com/articulos/articulo.asp?ida=2860

2) Perhaps the LOI referred to in the article is issued by the buyer. If I were a carrier/shipowner, I would require the buyer to provide a LOI issued by a first class bank to cover the risks arising from issuing 2nd set without obtaining the 1st set.

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53 Comments

  1. anonymous

    August 22, 2010 at 12:08 pm

    Anonymous writes:how about when switch include different BL date , as pricing, for buyer, is based on PLATTS on BL date and by switching ,trader find out that different date will bring higher price.Trader use one bank for purchasing product and different bank to negotiate LC from buyer.is that a fraud and under which law?

    Reply

  2. mroldmanvcb

    August 23, 2010 at 12:08 am

    I'm not sure I can't understand your question properly.1)If the buyer agrees to buy at the price based on PLATTS on BL date, he must pay at that price which may be higher or lower than that at the time of signing the contract.2)Fraud or not? It is correct under back to back transaction where the trader uses a master LC to guarantee for his bank to issue back to back LC in favour of the supplier. This type of fraud hardly occurs as the documents under the back to back LC will be presented to the back to back LC issuing bank. So, the trader can negotiate the documents only with the back to back issuing bank. The trader can take up the documents and negotiate with another bank only when he has fulfiled his obligation toward the back to back LC issuing bank under the contract for opening back to back LC.Every local law covers this issue.

    Reply

  3. anonymous

    August 23, 2010 at 5:08 am

    Anonymous writes:thanks your answer , here is clearer scenario for your review scenario 1) USA oil company has a daughter company registered outside USA 2) daughter company won a contract to supply gasoline to one company which is outside USA as well as outside country where daughter company is registered. Contract terms stipulate that cargo will be paid through letter of credit payable after 90 days upon delivery 3) price terms are bill of lading BL ,loading date ( actually a date when vessel completed loading at load port) PLATTS market scan quotation on that date plus differential. Meaning final invoice has to stipulate that date. Also contract terms stipulate that , in order to prove Bill of Lading date, upon arrival discharge port , cargo manifest and certificate of origin has to be presented as well as original Bill of Lading vessel loaded at one USA port, by USA oil company buying a product from one USA refinery 4) once vessel completed loading, all relevant documents , such a Bill of Lading and Origin Certificate ( done by shipping agent) as well as cargo manifest ( done by USA custom house) dated 12 of july , were issued stating USA oil company as consignee . vessel sailed toward destination i.e. discharge port 5) Problem is that original documents cant be shown as USA oil company didn't won a contract but daughter company and all original documents bear name of USA oil company, so they have switch original documents AND THEY DO THAT ON THEIR OWN WITHOUT ADVISING NO AUTHORITY OR SHIPPING AGENT OR BUYER OR OPENING BANK (AS FOR DISCHARGE THEY USE DIFFERENT NEGOTIATING BANK), PRACTICALLY PRODUCING NEW DOCUMENTS .This is a problem number 1 Than , seeing that Platts oil market scan , comparing actual -Bill of Lading date 12th of july and Platts oil market scan from date 5th of july, that PRICE HAD SIGNIFICANT MOVEMENT, and knowing that they have to switch document anyway, they decide to show on all documents false day (5th july) in order to earn on market movement 6) vessel arrive discharge port and whole set of documents are produced but this time showing that USA daughter company loaded and is delivering cargo as well as date of 5th july 7) daughter company let buyer open letter of credit reflecting this new date and using altered documents , after discharging daughter company issued invoice with price reflecting false loading date and was paid after 90 days on their bank account ( USING DIFFERENT BANK THAN FOR LOADING) question is 1) HOW ILEGAL IS ALL THIS 2) WHICH LAWS HAS BEEN BROKEN

    Reply

  4. mroldmanvcb

    August 23, 2010 at 8:08 am

    Hi,I'm not a lawyer. It's a difficult question for me to answer. I'll forward it to LC Monitor's experts for their further comments which will be reverted to you soon.Best regards,Mr. Old Man

    Reply

  5. anonymous

    August 23, 2010 at 11:08 am

    Anonymous writes:thanks your helpi know that this scam did occurred and would like to find how illegal is all this and how to prevent it

    Reply

  6. mroldmanvcb

    August 23, 2010 at 2:08 pm

    COMMENT FROM JEE MENG CHEN – ERNST & YOUNG SINGAPOREHi, Mr. Nguyen. I could only share based on what I know: – 1. Generally, oil trading is effected on successive “chain sales” i.e. FOB-FOB-FOB, etc or CIF-CIF-CIF successive sales and purchase; involving multiple buyers/sellers. It is possible, however, for structured trade financing to handle only 2 legs i.e. purchase from say a Chinese oil major and sale to a European oil major. The trade terms depend on which party intends to control the vessel. While it is possible to make a spread between the import and export (which is the norm) legs, market volatility (3rd quarter 2007 – Year 2008) would also make it a real possibility to make losses if the intermediary cannot effected the sales leg at the “right contractual price”. 2. The legality of Switched B/L depends on jurisdictions. It is applied especially when the intermediary, in addition to concealing identity, wishes to control the vessel i.e. control of cargo. 3. And if I follow your description, “AND THEY DO THAT ON THEIR OWN WITHOUT ADVISING NO AUTHORITY OR SHIPPING AGENT OR BUYER OR OPENING BANK (AS FOR DISCHARGE THEY USE DIFFERENT NEGOTIATING BANK), PRACTICALLY PRODUCING NEW DOCUMENTS .”, there is an issue. The B/L must be switched by the relevant party; NOT self-initiated. Generally, the trading intermediary pays-off the freight payment and the vessel owner agrees to switch the B/L from freight collect to freight prepaid. 4. If the trade is “controlled”, as in, structured trade style, the Intermediary Bank will notify the vessel owner that it cannot switch B/L without the Bank’s notification and authority. The Bank gives notification of its financial interest in the cargo. Does the vessel owner comply? Yes and No. Probably, an “inexperienced” vessel owner will only act with Bank’s instructions whereas, a veteran vessel owner will ignore the Bank’s instructions and taking orders from the charterer. 5. I have not come across instances where the B/L can be switched albeit self-initiated. Regards, Jee Meng

    Reply

  7. mroldmanvcb

    August 23, 2010 at 2:08 pm

    COMMENT FROM T.O LEE – T.O LEE CONSULTANT LTD CANADADear Mr. Nguyen, From my experience in handling oil trade using PLATTS index, your query does not comply with international oil trading practice. Here are my comments. 1 An experienced buyer will normally send his ship under voyage charter to pick up the goods for many benefits, First, making sure there is contractual (quantity and quality) oil loaded on board his ship. Second, buyer gets better charter deal, eliminating middle man profits. Third, if the charter were done by the buyer, your switch CPBL scenario/risk would not exist. 2 In oil trade practice, parties use a mean PLATTS value of say 5 days, two days before and two days after date of completion of loading on board. The purpose is to iron out the wide fluctuations, if any. Please refer to a DOCDEX case that I have advised my client to send for DOCDEX decision which is though disappointing, based on robotic literal interpretation other than common sense and ignoring oil trade practice. For the legal side, I better leave them to lawyers. T. O.

    Reply

  8. anonymous

    August 23, 2010 at 11:08 pm

    Anonymous writes:thanks Jee , your opinion is perfect.this did happen and trader did as described, it is a scam discovered by us ( i work for buyer, by the way state own company). Since never heard of something like this, our lawyers are looking in whole this , but even them are confused as this things goes in various operations and involving to many people, so will take sometimesregards

    Reply

  9. mroldmanvcb

    August 23, 2010 at 11:08 pm

    So, it is fraud 100%. The court will be on your side if you can provide evidence of fraud.

    Reply

  10. anonymous

    August 23, 2010 at 11:08 pm

    Anonymous writes:just found that original BL ( where USA company figure as shipper) was sign by the vessel agent at load port under master authority. BL presented at discharge port , under name of daughter company as shipper, has same agent signature , but false , they never signed this BL !!!!

    Reply

  11. anonymous

    August 24, 2010 at 12:08 am

    Anonymous writes:looks like , not only that , but they switch cargo manifest ( presented signed by daughter company) as well as certificate of originimmagine

    Reply

  12. mroldmanvcb

    August 25, 2010 at 9:08 am

    Dear Jee Meng Chen,I have forwarded your comment to the inquirer and below is his thank-you comment to yours:“thanks Jee , your opinion is perfect. this did happen and trader did as described, it is a scam discovered by us ( i work for buyer, by the way state own company). Since never heard of something like this, our lawyers are looking in whole this , but even them are confused as this things goes in various operations and involving to many people, so will take sometimes regards”Thanks and best regards,Duc

    Reply

  13. mroldmanvcb

    August 25, 2010 at 9:08 am

    From Jee Meng ChenHi, Mr. Nguyen.I see. In Southeast Asia, oil-related frauds / scams recurred every year for reasons I could not fathom. The deals do not make sense yet traders believe them and some banks that are not trained in oil L/Cs, issue such L/Cs. Nothing happens literally i.e. no shipment.Regards,Jee Meng

    Reply

  14. anonymous

    October 7, 2010 at 6:10 pm

    Anonymous writes:Dear Mr.Old man,Whether B/L can be switched in Dubai, if the shipment is booked to Gydnia, Poland ex India ? Other docs to be prepared by the middleman in Dubai ?

    Reply

  15. mroldmanvcb

    October 9, 2010 at 11:10 pm

    In principle, B/L can be switched anywhere provided the carrier agrees to do so.

    Reply

  16. anonymous

    December 15, 2010 at 11:12 pm

    Anonymous writes:whether the description and details of the bl can be changed than the original to suit the requirement while issuing the switch bl

    Reply

  17. mroldmanvcb

    December 16, 2010 at 11:12 am

    Provided the description and details of the switch b/l comply with L/C terms and conditions and do not conflict with data in other documents.

    Reply

  18. anonymous

    December 16, 2010 at 2:12 pm

    Nhu writes:Dear Mr Old Man, Pls help me:As per ISBP para. 60 : The invoice must show any discounts or deductions required in the credit. Field 45A of l/c show the description with some discounts. partial shipment allowed. In the first shipment, whether the invoice must show the deductions or not? Can we show the deductions in the final invoice?Thanks so much.

    Reply

  19. mroldmanvcb

    December 17, 2010 at 6:12 am

    Notwithstanding that Para 60 does not let us know whether such a deduction/discount must be shown in the first invoice or the final invoice where partial shipments are allowed, I believe the issuing bank will raise the discrepancy if such a discount/deduction is not shown in the first invoice as expected. Also see here: http://my.opera.com/mroldmanvcb/blog/2010/12/15/ucp-600-sub-article-30-c-vs-isbp-paragraph-60

    Reply

  20. anonymous

    January 16, 2011 at 12:01 am

    Anonymous writes:Hi Mr.Old ManCould you pls explain to me the concept of "Multiple Bill of Lading" and two more questions about Multiple B/L1. Can Multilple B/L be used in both FCL/LCL and LCL/FCL? 2. Is it the same as Split Bill of Lading?Thank you so much!

    Reply

  21. anonymous

    January 16, 2011 at 12:01 am

    Anonymous writes:Thưa bác Old Man.Cháu muốn hỏi khi một vận đơn đích danh đã được phát hành thì người gửi hàng có còn quyền kiểm soát với lô hàng đó không ạ?

    Reply

  22. mroldmanvcb

    January 16, 2011 at 9:01 am

    Originally posted by anonymous:

    Hi Mr.Old Man Could you pls explain to me the concept of "Multiple Bill of Lading" and two more questions about Multiple B/L 1. Can Multilple B/L be used in both FCL/LCL and LCL/FCL? 2. Is it the same as Split Bill of Lading? Thank you so much!

    Hi,Frankly speaking, I’m not good at this field. My answer is based on what I find on websites:If a Bill of Lading covers part of Goods in one container, the full series of Bills of Lading for all Goods in this container is known as Multiple Bills of Lading.1. Yes. Such Container shall only be released to all Merchants together at a single place or into the hands of a single representative agreed by all Merchants. Failing such agreement the Carrier may unpack the Container and release these Goods to the Merchant on a LCL basis. In such event the Carrier shall not be liable for any shortage, loss, damage or discrepancies of the Goods, which are found upon the unpacking of the Goods and such release will only be effected against payment by the Merchant of LCL Service Charges and any other charges of whatsoever nature for the additional services. 2. No. Split Bills of Lading is understood as one of two or more Bills of Lading which have been split from a single Bill of Lading. This possibly occurs when the consignee, for example in Vietnam, surrenders to the carrier the full set of original Bills of Lading and ask the carrier to issue three split Bills of Lading to deliver Goods into three parts at three different ports of discharge or when part (or all) of the shipment have been sold while the vessel is enroute to the port of discharge.I hope it is helpful.Best regards,Mr. Old Man

    Reply

  23. mroldmanvcb

    January 16, 2011 at 11:01 am

    Question: Cháu muốn hỏi khi một vận đơn đích danh đã được phát hành thì người gửi hàng có còn quyền kiểm soát với lô hàng đó không ạ? Answer:Hi,Về việc Shipper có thể kiểm soát hàng hóa giao theo Vận đơn đích danh (Straight B/L) hay không cũng có nhiều quan điểm khác nhau tùy theo luật của từng nước, tùy theo quan điểm của từng tòa án giải quyết tranh chấp liên quan (nếu có).Có quan điểm cho rằng vì rằng người nhận hàng (consignee) phải xuất trình vận đơn mới nhận được hàng nên chừng nào người nhận hàng chưa cầm giữ vận đơn trong tay để xuất trình nhận hàng thì quyền kiểm soát hàng hóa vẫn nằm trong tay của người gửi hàng và người gửi hàng có thể yêu cầu nhà chuyên chở thay đổi người nhận hàng khác.Tuy nhiên, cũng có quan điểm cho rằng vận đơn đích danh giống như giấy gửi hàng đường biển (Sea Waybill), người nhận hàng đích danh có thể nhận hàng mà không cần phải xuất trình vận đơn gốc cho nhà chuyển chở mà chỉ cần cung cấp giấy tờ chứng minh mình là người nhận hàng ghi trên vận đơn đích danh. Mặc dù vậy, tôi vẫn hướng theo quan điểm cho rằng vận đơn đích danh không phải là giấy gửi hàng đường biển, nếu như có tranh chấp về việc thanh toán tiền hàng và người nhận hàng vẫn chưa nắm giữ vận đơn gốc và chưa yêu cầu nhà chuyên chở giao hàng thì người gửi hàng vẫn còn có thể kiểm soát hàng hóa bằng cách yêu cầu nhà chuyên chở ngừng giao hàng hoặc thay đổi người nhận hàng (dĩ nhiên, phải giao vận đơn gốc lại cho nhà chuyên chở).Người gửi hàng kinh nghiệm không nên giao hàng bằng vận đơn đích danh mà nên sử dụng vận đơn theo lệnh.Thân chào,Mr. Old Man

    Reply

  24. anonymous

    August 24, 2011 at 1:08 pm

    Anonymous writes:Dear Mr. Old Man,How are you? Need your advise if the scenario is like this:We are selling a finished cosmetic product from China to our local market but since our authority only allow the respective brand owner to do the importation and notification, we need to do the switch B/L to change the shipper's name from the Factory name in China to our trading agent at Bangkok.Problem is, since the commodity is a finished cosmetic product, it needs a CFS (Certificate of free sales) from the origin country that is chopped by our embassy there along with other docs such as GMP certificate of the said factory and all the relevant docs such as MSDS, COA, etc under their name.We have no problem with all of that since our buyer also know that we are selling the product from this factory in China; and they need all the supporting documents to be under the factory name.But we can't use the factory invoice since we are the trading company and we need to issue our invoice for this shipment.So we plan to to switch B/L, just to change the Shipper's name, and all the related data on B/L will remain the same, i.e POL, POD, Desc of Goods, CBm, etc.What do you think about this?Thanks a lot fr your suggestion.Best Regards,IPB

    Reply

  25. mroldmanvcb

    August 25, 2011 at 10:08 pm

    It's ok. The shipper or consignor of the goods indicated on any document including bill of lading need not be the beneficiary. This is also OK under L/C transaction. UCP 600 Sub-article 14(k) provides: "The shipper or consignor of the goods indicated on any document need not be the beneficiary of the credit".

    Reply

  26. anonymous

    September 1, 2011 at 4:08 am

    Jackie writes:Dear Sir, Good day!While we switch B/l can we also change the price of the product in the Commercial Invoice / Can we change the invoice value.We don't want to alter the weight or anything. Just the price of the product and total invoice value. Is it possible ?Kindly advice.ThanksJackie.

    Reply

  27. mroldmanvcb

    September 1, 2011 at 11:09 am

    It is quite possible. However, if the invoice is presented under a transferred L/C, such changes must comply with that L/C.

    Reply

  28. anonymous

    November 17, 2011 at 6:11 pm

    Anonymous writes:Mr. Old man we have a shipment from UK to China, I wanna know followingExample: A is Shipper in UK B is in India C is the End Customer in ChinaB have a principle in uk who buys it from A but B doesn't have an office in China B doesn't want show any details of A to C .no LC terms Shall we involve a Switch BL showing 1) BL to India 2) BL to China from India How should be the commercial invoice prepared from UK and India ?

    Reply

  29. mroldmanvcb

    November 18, 2011 at 12:11 am

    Shipper can be any party. So, B may require a B/L to indicate B (instead of A) as the shipper. B can issue its own invoice.

    Reply

  30. anonymous

    November 18, 2011 at 4:11 pm

    Abhilash writes:Thanks for your above reply

    Reply

  31. anonymous

    January 12, 2012 at 4:01 pm

    Anonymous writes:hey Is there any effect of the Euro 1 certificate if I make switch B/L

    Reply

  32. anonymous

    May 25, 2012 at 1:05 pm

    Anonymous writes:Hi,I am rather impressed with you knowledge of the BL subject. I have a dilemma here.As a Terminal operator, how would you handle bulk petroleum and chemicals' many Split BLs?Example. I have some exact figures from a CQ. MT, @15c @60c, Barrels. All have to be indicated in the BL. With a single BL, accuracy is not an issue. However, If I start dividing quantities into more and more BLs (sometimes up to 5), not only do I end up with more documents to generate/sign but I eventually end up with innaccurate numbers because the last split would probably end up with x.1 Barrel and even the @60c will not sum up unless I include 7 decimal points. and with so much data in the BL already, the only way to add on so many decimal points would be to make the font even smaller than it is or print the BL on A3. Should I translate .1 into 1 Barrel? Should i ignore it? Are there any standard guidelines for split accuracy appart from the protection statements in the BL?

    Reply

  33. mroldmanvcb

    May 25, 2012 at 10:05 pm

    Sorry but this issue is beyond my knowledge and experience.

    Reply

  34. anonymous

    August 21, 2012 at 12:08 pm

    Anonymous writes:Dear Mr Old Man,I am buying from Seller A to sell the CIF goods to Buyer B. I am issue a sight LC from Buyer B. 1)Do i need to consent Buyer B approval if i want to do a switch BL as i do not want the seller detail to be reveal? 2)Do i use the old BL or new BL when i want to get payment from the bank base on the LC?3)Can the transferable LC on the CIF price be use to pay the partial FOB price for my seller A, after which i switch BL and send to Buyer B?

    Reply

  35. anonymous

    November 7, 2012 at 11:11 am

    JAGAN writes:Hi,sir…i have a doubt in shipping.can you pls advice the answer for the below question.There is a shipment is coming from India to Saudi Arabia.The consignee do'nt want to know the actual shipper and also the consignee wants to submit the BL in the Bank.Now,My plan is to make a switch Bl and given to consignee,if this switch BL can submitted to the bank or not

    Reply

  36. mroldmanvcb

    November 14, 2012 at 10:11 pm

    Shipper can be any party including the middle man like your company. Just ask the seller to have B/L issued with your company as shipper.Switch BL is complicated and should be agreed by the carrier.

    Reply

  37. anonymous

    March 6, 2013 at 10:03 am

    john writes:dear oldman, I am middle man who got the order from the buyer and requested my supplier to ship directly to my customer on CIF terms. How can i make sure that my supplier name is not appeared in bill of lading. Do i have to talk to the same carrier that my supplier is shiping and get it switched to my name and send my own invoice to buyer? or request supplier to ship on my name? if he ships on my name then i have to put my invoice and my margin would be know to my supplier. What would be the best option for me to hide both supplier and buyer from each other.

    Reply

  38. mroldmanvcb

    March 6, 2013 at 11:03 am

    Dear John,You should ask the buyer to open a transferable L/C in your favour, and then you ask the transferring bank to transfer the L/C to the supplier/second beneficiary. B/L showing any party as shipper is acceptable. So you can require the B/L to indicate your name as shipper. When the supplier/second beneficiary presents the documents to the transferring bank, you can substitute your own invoice and draft. This way can help prevent the buyer and the supplier from knowing each other, and help prevent the supplier from knowing the margin that you earn.. Switch B/L is very complicated. Better not.Best regards,Mr. Old Man

    Reply

  39. anonymous

    March 6, 2013 at 10:03 pm

    Anonymous writes:Dear Old man,Thanks for the quick reply. We are actually not doing any L/C in our trade. We are just going by 50% advance and remaining 50% upon receiving the copy of BOL. WE are also doing the same terms with the supplier also. How can we do that in this case. I dont want my supplier to know my buyer details. If i ask my supplier to issue the BOL with my buyer name as consignee and my name as consigner(shipper) then we would know my buyer name.if i trust my supplier and givehim my buyer details how can i put my invoice attached to that as we have to produce the invoice details(invoice number) also in the BOL. My supplier might know my margin. Please help me as i am new to the international trading.

    Reply

  40. mroldmanvcb

    March 7, 2013 at 12:03 pm

    Just ask the supplier to provide BL indicating your company as shipper and goods consigned to the order of your company, and ask the supplier to forward the documents to your company, and then you substitute your own invoice and endorse the BL to the order of the buyer.The buyer pays you and then you pay the supplier. Is it OK?

    Reply

  41. anonymous

    March 7, 2013 at 9:03 pm

    John writes:Thanks for the quick reply. I appreciate your help.

    Reply

  42. anonymous

    July 11, 2013 at 7:07 pm

    nour writes:dear Mr. Old Mani have one question we are a company in saudi arabia and we will buy cargo from Russia to buy to our customer in china .now i do not want the suppleir know the final receiver , can i use switched BL and if i use what about the certificate of origin.PS i will not use LC payment terms will be cash against BL .many thanks in advanced

    Reply

  43. anonymous

    July 11, 2013 at 7:07 pm

    nour writes:another point the cargo will shipped directly to China and no transit

    Reply

  44. anonymous

    August 25, 2013 at 5:08 pm

    Biby writes:Dear MR. Old Man, i want to import customs rejected cargo from doha to jebel ali, But customs want allow to reship to jebel ali since the cargo is shipped from china. They will allow to return only to the original port. so i want to switch the B/L. That means, i instructed my agent in doha to provide MBL as form doha to jebel ali and provide HBL1 as doha to china and HBL2(switch) doha to jebel ali. kindly advice is that fine.

    Reply

  45. mroldmanvcb

    August 25, 2013 at 9:08 pm

    Just ask the shipping carrier if it's ok.

    Reply

  46. anonymous

    August 26, 2013 at 1:08 pm

    Biby writes:That my agent will do in POL. What i want to know is, since this is customs rejected item, is there any other matter i need to take care apart from informing carrier, to avoid any further complications in returning the cargo to a port other than its actual origin port.

    Reply

  47. mroldmanvcb

    August 26, 2013 at 3:08 pm

    So the problem is whether or not the customs and/or related competent authorities of the counry where the rejected cargoes are returned to accept such cargoes. Sorry but to tell the truth I don't know.

    Reply

  48. anonymous

    September 25, 2013 at 4:09 pm

    samah kadry writes:Who should pay switching B/L fees?

    Reply

  49. mroldmanvcb

    September 26, 2013 at 10:09 am

    It is common practice that the party who requests switch BL shall pay switching BL fees.

    Reply

  50. niteesh

    August 24, 2015 at 8:00 pm

    house b/l like that below
    consignor : xyz india
    consignee : to order of
    notify: abc honkong

    final destination is Syria
    is it a Switch b/l??

    how it works , our agent is in syria is delivery agent in house b/l.
    also it is our agent contract
    Please define is it the Right way to release b/l

    Reply

    • mroldman

      August 25, 2015 at 8:59 am

      Hi,
      You need to know what a switch bill of lading is.
      Switch bills of lading are a new set of bills of lading issued to replace the original bills of lading issued at the time of shipment.
      Switch bills of lading would show the original consignee (the middle man) as shipper and its buyer as consignee and the actual port of loading may be changed.
      Switch bills of lading would help the middle man prevent his buyer from identifying the actual exporter as well as the actual country of origin of the goods
      The information provided in your question is not sufficient to determine if it is a switch bill of lading or not.
      Kind regards,
      Mr. Old Man

      Reply

  51. Patrick Hoang

    September 11, 2015 at 3:52 pm

    Hi anh Nguyễn Hữu Đức,

    Nhờ anh Đức tư vấn giúp em trường hợp này. Công ty bên em là một công ty xuất khẩu các sản phẩm về nhôm/thép, hiện tại bên em đang gặp phải trường hợp thế này. Một đối tác tại Thổ Nhĩ Kỳ gặp bên em và đề nghị sử dụng thanh toán bằng hình thức L/C chuyển nhượng không huỷ ngang. Họ không muốn bên em biết được người nhận hàng cuối cùng là ai. Bên em đang rất phân vân có nên nhận đơn hàng này không vì bên em chưa bao giờ làm L/C chuyển nhượng cả. Thực tế thì bên em cũng đã tìm hiểu trên mạng nhưng vẫn chưa chắc chắn về trường hợp này lắm. Nhờ anh Đức advise giúp em là hình thức L/C này có gì rủi ro và nguy hiểm không, và nếu có, thì cách phòng tránh như thế nào?

    Biết là anh Đức rất bận nhưng nếu được, nhờ anh Đức giúp em với nhé.

    Thanks anh,

    Reply

    • mroldman

      September 13, 2015 at 5:46 am

      Tôi hiểu trong trường hợp này công ty bạn là người thụ hưởng thứ hai (bên được chuyển nhượng LC). Trong trường hợp này, ngân hàng chuyển nhượng chỉ cam kết thanh toán cho công ty bạn khi nhận được tiền hàng (trả cho người thụ hưởng thứ nhất – đối tác của công ty bạn) từ ngân hàng phát hành LC. Nếu như công ty bạn không biết rõ đối tác của mình thì không nên thực hiện giao dịch này. Nếu LC chuyển nhượng cho công ty bạn được ngân hàng chuyển nhượng xác nhận thì rủi ro sẽ giúp hạn chế rủi ro (bởi ngân hàng này phải thanh toán hoặc chiết khấu miễn truy đòi nếu chứng từ xuất trình phù hợp).
      Regards

      Reply

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