Bill of Lading is the most important document in

shipping.
 Banks do not issue funds if B/L not clean;
 Carrier do not release the cargo if they do not
receive bill of lading.
 And carrier cannot escape from claim of
liability for cargo damage against clean bill of
lading.
 The commercial aspect of shipping trade
revolves around bill of lading.
It is thus important for Masters to be aware of
all the situations they can be subjected to and
how they should deal with such situations.

1. Issuing letter of authorizations to agents

for signing bill of ladings

2. Master signing bill of ladings, And

3. Dealing with illegal requests

1. Issuing Letter of Authorization to agents

for signing bill of ladings

It is usual nowadays for the agents to sign bill of

lading on Master’s behalf. There are few reasons
why agent’s are asked to sign bill of ladings on
master’s behalf. These can be

1) Bill of lading quantity not ready before

vessel’s departure. This is particularly the case
where EDP (Early departure procedure) is
excercised. One such example is loading of crude
oil in the port of Rastanura where EDP is common
and vessel has to sail minutes after completion of
cargo. This is also common where terminal takes
more time for calculating shore figure loaded on
board.

2) Terms and conditions for the bill of lading

not yet finalized. This can happen if the format of
the bill of lading is not yet agreed between the
ship owners and the shipper (or shipper’s
charterers). While they may still be
communicating on the format of the bill of ladings,
owners can instruct the agent to sign bill of lading
on Master’s behalf.

3) The break-up of quantities not yet

finalized. Sometimes the break up quantities for a
commingled cargo is not finalized. In such case
charterers may request owners to have the bill of
ladings signed later by agent on behalf of master.
Whatever the reason, Master must receive explicit
instructions from the owners about who will sign
the bill of lading. If the agent has to sign bill of
ladings on master’s behalf, he would need
master’s authorization to sign the bill of ladings.
In such case, some agents may bring their own
format of “Letter of authorization” or they can ask
master to draft one. In both the cases, Master
must ensure that the letter of authorization has all
the element to safeguard the interests of the
vessel and the owners. The checks to be
considered before issuing such authorization can
be

1) The LOA should highlight the fact that “bill of

lading should be signed in strict accordance with
the mate’s receipt”. And while we put this in LOA,
it is prudent to double check for correctness of
details in Mate’s receipt.

2) LOA should also instruct the agent to send the

draft copy of the B/L to the owners for their
approval before signing it.

3) LOA should instruct the agent to sign the bill of

lading in strict compliance with the terms of the
relevant charter party.
4) LOA should give as much detail to the cargo as
possible. Each bill of lading to be signed by
agent would require a different LOA. If the break
up quantities are not finalized by the charterers,
Master may require to issue a common LOA for
each grade and later issue LOA with split
quantities.

Master should be more cautious with the letter of

authorizations if the agent signing the bill of
lading is not appointed by the owners.

2. Master Signing bill of ladings

If Master has to sign the bill of lading, there are
few things he should be aware of and conduct
himself in a certain way.

1. Signing incomplete bill of ladings: In ports

where EDP (early departure procedures) is
involved, shipper may present a blank or
incomplete bill of lading for master to sign. No
matter what, these should never be signed.

2. Format of bill of lading: The first thing for

the Master to check is if the correct form for the
bill of ladings is used. Master must clarify with
the ship owners as to which form is in use. One
way for Masters to do this to ask the owners to
send him the draft copy of the final bill of lading
that he will be signing. Draft copy would have all
the details of final bill of ladings inserted in it
except the cargo quantities. Once the Master has
the draft bill of lading, he can just compare same
with final bill of lading before signing.

3. Date of Loading: Date of loading might look a

small thing but wrong date on bill of lading can
have major implications. Date of loading should be
the actual date on which cargo was loaded on
board. If the loading took more than one day, the
date of completion of cargo should be inserted. If
previous or post date is inserted into the bill of
lading, shipowner might be at risk of claims from
cargo interests. That is because the value of the
cargo varies each day. Cargo buyer may have to
pay more or less amount to seller depending upon
the change in cargo price for that day. Whatever
the change, someone (Buyer or seller of the cargo)
will be at loss and they would pass this loss to the
carrier. Even P&I clubs do not entertain these
claims and these would finally be out of pocket
expenses for the owners.

4. Correct Cargo quantity: Correct cargo

quantity is most important information in the bill
of lading. This is the information that is in direct
control of master and his crew. If the vessel has
received lesser quantity than the bill of lading
quantity, Master should refrain from signing the
bill of lading, even if terminal is ready to sign
letter of descripency or letter of protest for
difference in quantities. Master should follow the
guidance provided in SMS manuals of the
company or the charter party for the instructions
to deal with such situations. Usually, charter party
instruct the Masters to sign bill of ladings if
difference in quantities is less than 0.3%. If the
difference is more than 0.3%, master should
refrain from signing the bill of lading and call P&I
club after consulting the ship owners.

5. Freight Prepaid: There are usually one of

these two statements regarding freight that would
be bill of ladings. “Freight Prepaid” or “Freight
payable as per terms and conditions of relevant
charter party”. Clause “freight prepaid” implies
that carrier has already received the
freight. Master must never sign bill of ladings with
the clause “freight prepaid” without express
permission from the shipowners. This is because
of obvious reason that if the freight is not paid yet,
you do not want to sign a legal document that
states otherwise.
6. Verify the address details – While the details
on the bill of lading are submitted by the
customer, it is of paramount importance that the
carrier also verify the details shown on the bill of
lading..
7. Verify the cargo particulars – The cargo
particulars of the shipment should also be verified
and matched with the details given at the time of
booking, before the bill of lading is signed..
For special cargo such as reefers, hazardous, out
of gauge cargo the bill of lading should reflect
details such as carrying temperature, dimensions
of the out of gauge, hazardous class and UN Nos..

8. Check the protective clauses – Protective

clauses such as “shipper’s load, stow and count” ,
“said to contain” etc are generally pre-printed in
the stationery but it would be good to check..
Why is this important..??
The person signing the bill of lading
acknowledges the description, quantity and quality
of the goods loaded and recorded on the bill of
lading..
Any bill of lading signed with the knowledge of
facts that are misrepresented may be considered
to be a fraudulent document and may result in
legal consequences for the signatory..
9. Non-inclusion of commercial terms –
Commercial terms relating to the sales contract
etc does not form part of the bill of lading and
ideally should not be included in the bill of lading..
Commercial information includes Cargo Value,
Incoterms, Letter of Credit details etc..
As per the carriers, this commercial information
does not form part of their contract of carriage
and therefore it has no place on the bill of lading..
If the bill of lading states a cargo value, it
becomes an Ad Valorem bill of lading (According
to Value) and as per Standard Club, the purpose of
an Ad Valoerm bill of lading is to sidestep the
package/unit limitation set out in Article IV Rule
5(a) of the Hague or the Hague Visby Rules (the
Rules)..
But if the customers insist on the value on the bill
of lading, then carriers may choose to inform their
liability Insurers of the requirement.. The insurers
in turn may accept to cover any eventuality of
issuing an ad valorem bill of lading in exchange
for a sometimes hefty extra premium..
If the customer is willing to pay this extra cost,
then the carrier may issue an ad valorem bill of
lading..
10. Bills of lading originals must be issued in
the right numbers and marked appropriately
– When bills of lading are issued in originals and
copies, due care must be taken to issue the right
numbers

3 Originals and 6 Copies seems to be the general

norm when negotiable bills of lading are issued..

3. Dealing with Illegal requests

A Master in his career can come across number of
different kind of pressures to sign a bill of lading
that he is not suppose to sign. I personally have
come across to some of these. Let us see what
these requests can be
1) Request to sign bill of lading with ship
shore quantity difference.
Terminal may request master to sign bill of lading
showing more loaded quantity than ship’s figure.
The terminal may ask the master to issue letter of
protest for discrepancies in quantities and sign the
bill of ladings. The master may find himself under
pressure for delays and terminal manager may on
board with a letter of protest stating all delays will
be on ship’s account. Another one, terminal
demanding the vessel to leave berth within three
hours of completion of cargo. Whatever the case,
Master must not come under pressure to sign bill
of lading which he thinks he should not sign.
Generally, Master can sign bill of lading if the ship
shore quantity difference is lesser than 0.3%. If
the difference is more than 0.3%, master should
request for P&I attendance and must never sign
bill of lading unless matter has been sorted out.

2) Request to sign blank or incomplete bill of

ladings
In one sentence, the request must be denied. We
have discussed earlier in this blog , the possible
reasons for this request. In most cases the reason
for this request is insufficient data due to EDP.
Master should inform the owners and charterers if
any such bill of lading is presented to him for
signing.

3) Request to issue clean bill of lading

Shipper may request the master to issue clean bill
of lading with a logic that clean bill of lading is
required for letter of credit from the bank. Though
true, but that is a problem shipper has to deal with
and master must only sign the bill of lading which
describes the actual condition of the cargo.
Shipper may propose to indemnify master and
owners of any consequences because of it. Master
must resist from any of such pressures as there
are huge risks involved in this. It does not matter
if any indemnity letter was issued to master. If
master issues a clean bill of lading despite
inaccuracies, it will be assumed that cargo was
loaded in apparent good condition. Owners would
have little to defend for any cargo claims arising
because of inaccurate bill of lading if clean bill of
lading was issued by the master.

4) Request to retain an original bill of lading

on board
Shipper may request to keep one or more than one
original bill of lading on board and carry same to
discharge port. Shippers does this to avoid the
possibility of original bill of lading not arriving at
discharge port before vessel’s arrival. This is
particularly the case with short voyage where it is
impossible for shipper to provide the original bill
of lading at discharge port. Master usually signs
three original bill of ladings and few of the non-
negotiable copies of bill of ladings. The number of
original bill of ladings signed by master is
mentioned on each bill of ladings, usually on the
bottom of front cover. None of these original bill of
ladings can be carried on board to discharge port.

If requested by shipper, Master must deny any

such request as their are risks involved with this.
The main risk involved is the change of ownership
of the cargo while the vessel is enroute. If there
has been change of title of the cargo, this
would reflect on the two bill of ladings but not on
the bill of lading carried by the master
onboard. So the bill of lading carried by the
master may not be showing correct details to
whom the cargo belongs. The ship owner will have
absolutely no defense in wrongful delivery of the
cargo in this case.

5) Request to discharge cargo at different

destination to that in bill of lading
If a request is made to proceed to a port different
than that mentioned in bill of lading, master must
inform the ship owners. Apart from that he must
proceed only when ship owners have safeguarded
their interest. There are two risks involved in such
a request. first, one of the original being presented
at port of discharge stated in bill of lading.
Second, claim for deviation to another port. Ship
owners has the arrangements to deal with such
requests, such as they can ask the shipper to re-
issue the bill of lading after destroying the
previous one. Whatever the arrangements,

6) Request to discharge the cargo without

production of original bill of lading
The practice of discharging the cargo against a
LOI (Letter of indemnity) is so common specially
in tanker trade that this can trick masters.
Masters must ensure that direct request from
charterers/shipper to discharge the cargo against
such LOI should not be considered. Master must
receive such instructions from the ship owners. If
vessel is on time charter, charterer would receive
the LOI from shipper or sub charterer and instruct
master to discharge the cargo. These instructions
might look something like this

In these cases, sometimes owners need LOI in

their own format. Also such LOI from shipper or
sub-charterer is indemnifying the charterers but
not the owners. Owners are not under any
contractual obligations with sub-charterers and
such LOI might not be enough to protect owner’s
interest. So in this case owners might need a
separate LOI in their format from the charterers
(time) of the vessel.

What is the difference between load line

hydrometer and draught survey hydrometer?
Draft survey hydrometer is used to know the density of
the sea water that will be used during draft survey for
calculating the weight of cargo loaded.
And Loadline hydrometer is used to know the density of
sea water that will be used for calculating the
compliance with the loadline convention.
Draft survey measures the actual density of the water.
Whereas Loadline hydrometer measures the Apparent
density (also called specific gravity) of the water.
Specific gravity is the density in relation to something.
When we measure the specific gravity of water, it is in
relation to the fresh water at 15 C. So if specific gravity
of sea water as measured with loadline hydrometer is
1.025, it means that the density of water in relation to
the fresh water at 15 C is 1.025. Specific gravity is a
ratio, a Number and does not have any unit. Now what is
the actual density of water if the specific gravity is
1.025. The fresh water density at 15 C is 0.999 Kg/L in
vacuum. So the actual density of water with specific
gravity 1.025 will be 1.025 x 0.9991 = 1.024 Kg/L in
vacuum.
The correction for converting this density from vaccum
to the air is 0.0011.
So actual density of sea water (with specific gravity of
1.025) in air will be1.024-0.0011 = 1.023 Kg/L in air.
Now If we measure the density of the same sea water
with draft survey hydrometer, it will give the reading of
1.023 Kg/L in air.
When to use which Hydrometer ?
If you want the dock water density to know how much
you can submerge the load line and still comply with the
load line convention, use loadline hydrometer. This will
give you the specific gravity (apparent density) of the sea
water.
But when calculating the weight of cargo loaded by draft
survey, we want to know the actual sea water density
(and not specific gravity). In this case we must use draft
survey hydrometer.
How to distinguish between Loadline and Draft
survey hydrometer ?
Both the hydrometers can be distinguished by the
marking on the hydrometer.
As loadline hydrometer measures specific gravity or
Relative density, it will have the marking of notation RD
or Sp. Gr.
Draft survey hydrometers have the unit of the density
and temperature marked on these. For example it may
have the marking as Kg/L at 15 C.
Ship staff must use the correct hydrometer for the
intended use. If another hydrometer is used, proper
corrections must be applied to it.