Release without original raises forwarders’ concerns
ALAN PEAT
A MOVE by shipping lines to add certain clauses to their bills of lading (BoL) - enabling them to release cargo without the production/surrender of the original BoL - has met with serious objections from the SA forwarding community.
Edward Little, consultant to the SA Association of Freight Forwarders (SAAFF), told FTW that FIATA - the central body for forwarding associations - had kept the association abreast of the deliberations on the clauses which have taken place at the International Chambers of Commerce (ICC) in Paris.
“I was, quite frankly, astonished by the initial reaction of the banks,” he said, “which, with notably few exceptions, seemed to find the practice acceptable.
“In the developing world it is still common practice for importers and exporters to negotiate in terms of a letter of credit - which establishes the requirement for an original BoL as a “Document of Title” in order to secure delivery and/or payment.
“Such is the banks’ need for protection that in many, if not in most cases, they require that the transmission of the original BoL be handled by them on a bank-to-bank basis - rather than allow their client or his freight forwarder to handle it on their behalf.”
SAAFF’s attitude about the effect of the new clauses is that they contravene a well-proven system, and could place forwarding agents in jeopardy.
“To allow shipping lines to deliver/hand over cargo without production/surrender of the original BoL would defeat the whole objective of this system that has been recognised and successfully relied upon worldwide for more years than anyone can remember,”says Little.
Also, forwarding agents would be severely prejudiced, he added.
This particularly when acting as principals - a situation where the cargo plus the liner bill is accompanied by a house bill. It could hit the forwarders when they find that the cargo has been released without their knowledge and consent, however much the shipping line believes that the party to whom delivery is being made is genuine.
Whilst one proposal put forward has been to avoid using the shipping lines that have introduced these clauses, Little sees this is impractical in SA - where the choice of shipping lines is limited.
“In addition,” he told FTW, “importers and their forwarding agents in SA do not always have a say in the vessel that will be used in the conveyance of the goods.”
SAAFF has now forwarded its concerns to SA Chamber of Business (Sacob) CEO James Lennox, with the request that he brings them to the attention of the various ICC committees that are involved in this matter.
“This is so that a meeting of the ICC maritime and freight committee scheduled for November 1 could be informed that they should advise the banks on the difficulties in accepting these clauses.”
