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Maritime Logistics Professional

When Bill of Lading become the problem

Posted to When Bill of Lading become the problem (by on July 1, 2013

Fraud, malpractices and other prevalent offenses associated with bill of lading take center stage at the workshop on ‘Bill of lading & Disputes’

The mounting problems caused in relations to the Bills of Lading (B/L), an important document in the EXIM Trade, have been a matter of concern. Many importers, exporters, freight forwarders, shipping agents, carriers, other transporters etc., have lost millions of dollars often because there is a tendency to take things for granted not aware about the innumerable pitfalls and the fraudulent practices that exists when dealing with B/Ls. It is common knowledge that the path between the exporters and the importers by which cargoes move can often be treacherous. 

Like a knight in shining armor, the Shipping Professional Network in Mumbai (SPNM) has taken the role of a crusader, championing the cause of the trade, striving to promote fair business practices, bring in transparency and help fellow professionals to be on the guard against becoming victims of illegal schemes and malpractices. By popular demand it organized a full day WORKSHOP on “Bill of lading & disputes” on 29 JUNE 2013 which also served their objective of networking, learning & socializing.

It provided an opportunity to the large number of persons who attended with in-depth information about the nitty-gritty of the trade and all relevant facts on B/L so that they do not fall prey to prevailing transgression. The well-attended workshop was open to the trade and though there was no participation charge, the organizers accommodated all who requested for registration.

Bills of lading present numerous opportunities for fraudsters to manipulate the commodity trades. These opportunities arise because of the unique range of functions that such bills perform. Prakash Bhawnani, General Manager of J. B. Boda Insurance Brokers Pvt Ltd., a well-known expert on the topic said, “The implications and consequences of mishandling a B/L could be far reaching and could potentially be both costly and damaging.” He informed that B/L is a legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the goods being transported and which also serves as a receipt of shipment when the goods are delivered to the predetermined destination.

In order to avoid risks he warned that operators must arm themselves with a wealth of practical knowledge on documentary credits, incoterms, transport documents, chartering, trade frauds and cargo insurance. He explained how transport got regulated over the years and how the Hague Rules, 1924, Visby Protocol, 1968, Hamburg Rules, 1978, the UN Convention on Multimodal Transport of Goods, 1980 and the Rotterdam Rules, 2009 came into being and the liabilities they carry.

Touching upon the various types of frauds and malpractices that are prevalent, he mentioned that among the common ones were mis-deliveries, delivery against forged B\L, non-compliance of legal requirements, substitution of the cargo with junk, mis-declaration of hazardous goods as non-hazardous, claim for short-delivery from container with seal intact and limitation of liability on weight basis. There were other instances of material received in damaged condition.

Speaking on the sidelines of the workshop Mr. Bhawnani informed that he is often flooded with requests from people seeking advice. “In most cases I find that people are not aware about their rights and what they should be doing.” He recalls a freight forwarders who he found happened to be so confused as a result he failed to take delivery of the containers for over six months.


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