Line justifies ‘unpopular’ indemnity demand

ALAN PEAT A DEMAND by a shipping line for indemnity from consignees for each and every release effective from August 15 has attracted loud complaints from members of the SA Association of Freight Forwarders (Saaff) in Cape Town. The problem with the demand – which comes from Green Africa, SA agents for Evergreen Line - is that it negates the purpose of a bill of lading (BoL), which is a negotiable document entitling the holder to receive release of the cargo, says Graham White, financial manager of Safcor Panalpina in Cape Town, and member of Saaff’s exco, This is defined in “Export Trade: The Law and Practice of International Trade” by Clive Schmitthoff – accepted as the bible for the SA freight industry – as: “Only a person holding a bill of lading is entitled to claim delivery of the goods from the shipowner. The shipowner is protected if he delivers the goods to the holder of an original bill - though it is only one in a set - and need not inquire into the title of the holder of the bill or the whereabouts of the other parts of the bill. “The bill of lading retains its character of document of title until the contract of carriage by sea is discharged by delivery of the goods against the bill, and the shipowner is not responsible for wrongful delivery of the goods against the bill unless he knows of the defect in the title of the holder.” Apparently, according to White, other lines have also introduced indemnity demands, but only against non-negotiable waybills – introduced to speed up release of cargo, although putting the shipowner at risk – express releases, and, of course, the already accepted indemnity request against e-mailed or telefaxed copies of a BoL. Crosshead It’s reasonable in these situations, but not, he added, in the case of a standard BoL. “This document,” said White, “entitles the holder to the cargo, and – with indemnity already written into the clauses on the bill – there is no point in shipping lines charging added indemnity.” For lines to start demanding indemnities from consignees will also add more paperwork to an already burgeoning system of paper, Gavin Cooper, MD of Seair Freight and former Cape chairman of Saaff, told FTW. “But, more importantly,” he added, “as agents search for the appropriate consignee to sign the letter it will slow down the release process of containers which will, no doubt - given the limited free period which containers have in a terminal – add to importers’ costs.” But Green Africa feels that its move is justified and realistic. “We’ve had problems, along with other lines, I might add,” a spokesman told FTW. The problem, he added, is that – although there is indemnity on the bill – Green Africa, as agents for the line, has been faced with freight forwarders taking release of the cargo. “Some have then redirected the shipment – say from Durban to Johannesburg – and, when the consignments have disappeared as has sometimes happened, we have the consignees lodging a claim against us,” the spokesman said. It is this sort of case which Green Africa feels gives the company the entitlement to ask for indemnity directly from the consignee to cover such shipment releases going wrong.