Bills of lading, protests and the official log book
1The lesson in plain words
Your bill of lading records the cargo and helps prove the carriage contract. Check delivery rights, sign accurately and keep clear records.
Three functions
A bill of lading (B/L) is a receipt for cargo quantity and apparent condition, and evidence of the carriage contract. A negotiable bill is a document of title: transferring it can transfer the right to claim the goods. Check entitlement, the required original and any endorsement, the holder's signed transfer. If originals are missing, consult the owner and protection and indemnity (P&I) insurer before delivery. A letter of indemnity (LOI) promises reimbursement; it cannot establish entitlement, remove misdelivery liability or guarantee cover. Never release cargo on your own authority.
Clean or claused
A clean B/L has no express reservation about the apparent condition of the goods or packaging. A claused B/L records visible defects, such as wet bags or torn packaging. For visible damage, clause the mate's receipt, your loading receipt, and the B/L. Never sign a clean B/L for damaged cargo in exchange for an LOI. That deceives the buyer and the bank, and the P&I club may refuse to cover it.
The rules on liability
The Hague Rules of 1924 remain in use. Under Hague-Visby with the 1979 Protocol, the limit is 666.67 Special Drawing Rights (SDR), an international accounting unit, per package or unit, or 2 SDR per kilogram of gross weight lost or damaged, whichever is higher. The usual time limit for bringing suit is one year from delivery or the date delivery should have occurred. Hamburg is in force; Rotterdam is not. Check which regime applies to the carriage.
Protests
A note of protest is a sworn statement by the master, made before a notary, consul or other official soon after arrival. It records that the ship met heavy weather or another event that may have damaged the cargo or ship. This account supports later claims; it does not itself establish freedom from liability. An extended protest gives the full details later, from the log, when the damage is known.
The log book
The official log book required by the flag records births, deaths, crew changes, offences, drills and other legal events. The deck log records navigation and weather. Both are evidence in court. Write facts promptly and sign entries. Never remove pages. Keep a mistaken entry readable: strike through once, then initial and date the correction. Retain records for the periods required by the flag.
2Key data
- B/L functions
- Receipt, evidence of contract; negotiable B/L: document of title
- Hague-Visby limit
- Higher of 666.67 SDR/package or unit and 2 SDR/kg gross weight
- Hague-Visby time bar
- 1 year from delivery or when delivery should have occurred
- Hamburg Rules
- In force since 1992, about 35 states
- Rotterdam Rules
- Signed 2009; not in force (needs 20 ratifications)
- Note of protest
- Before a notary or consul, soon after arrival
3Key points
- 1
A B/L is a receipt and evidence of the contract; a negotiable B/L also acts as a document of title.
- 2
Clause the B/L for visible damage; never trade a clean B/L for an LOI.
- 3
Check which carriage regime applies; Hamburg is in force, Rotterdam is not.
- 4
Note protest soon after a damaging event, and keep accurate logs.
4Frequent mistakes
Wrong: Signing a clean B/L against an LOI is normal and safe.
Right: For damaged cargo it is a misrepresentation; the LOI may be unenforceable and P&I cover lost.
Wrong: The Rotterdam Rules now govern most container trade.
Right: They are still not in force. Hague-Visby, Hague or Hamburg rules apply, depending on the contract and the states.
Wrong: Wrong log entries should be erased so the book looks neat.
Right: Strike through with one line, initial and date. Erasures look like falsification.
5Practice case & exam keys
After loading steel coils you notice rust and dents on 14 coils. The shipper asks you to issue clean bills of lading and offers a letter of indemnity. The ship then meets a severe storm on passage. What do you do in each case?
Show the answer
Clause the mate's receipt and the B/L with the coil numbers and the damage seen. Refuse the LOI for clean bills, and inform the owner and P&I club. During the storm, record the weather, ship motion and any actions taken in the deck log. On arrival note protest before a notary or consul, and extend it later when the damage is known.
Exam keys
- B/L: receipt, evidence of contract; negotiable bill: document of title. Clean vs claused.
- Hague-Visby: higher of 666.67 SDR/package or unit and 2 SDR/kg gross lost/damaged; suit within one year of delivery or when due.
- Hamburg in force for about 35 states; Rotterdam not in force.
- Note of protest, extended protest; official and deck logs as evidence.
Finish this unit
When you've read it, answer three questions. Get all three right to finish the unit; opening the page alone doesn't count.
My notes for this unit
No notes