How to act and prevent the situation when full set original Bill of Lading have been lost for an oce

“Oh my gosh, the originals ocean Bill of Lading are lost for a critical shipment for our final customer. The container is blocked at the port and the storage fees are accumulating every day as well as the dissatisfaction of our customer! Help us!”

Such an unpleasant situation can happen to you when working as 4PL or 3PL logistics provider and below, we examine actions to reduce client costs and enable rightful owner to take over cargo as soon as possible. 

A Bill of Lading is crucial document used in ocean transportation, defined as follows: “A document that a transport company possesses acknowledging that it has received goods, and serves as title for the purpose of transportation. 

It’s important to distinguish between Master Bill of Lading which is issued by the ocean carrier to the forwarder and House Bill of Lading, issued by the freight forwarder to the actual shipper. Both of them are documents of title.  

A potential loss of House Bill of Lading could be more easily solved directly between the freight forwarder and the shipper. On the other hand, to lose originals of Master Bill of Lading is subject to International Commercial Law and traditionally protect the ocean shipping companies’ rights by historical reasons - their exposure to higher risks running this business before Modern Age.
New technologies have brought innovation to the oldest transportation mode industry, such as the release of cargo based on Express Bill of Lading  – “A non-negotiable bill of lading sent via fax or other electronic means.”  Nevertheless, there are still countries, in particular on African continent, where the local commercial law allows only release of cargo to the person who presents original set of Bill of Lading (applicable for Bill of Lading addressed to one consignee, not “to order” when right to take over the cargo is based on document’s physical ownership). If the consignee fails to do so, cargo release can be obtained only if:

1.    Consignee finds the lost original set Bill of Ladings (at least one of usually issued 3 sets)
2.    Consignee issues a Letter of Indemnity (also called Letter of guarantee) defined as follows:

“A letter of guarantee given at discharge and delivery by a consignee who is unable to surrender original bills of lading which have been issued but lost is not a letter of indemnity (and usually not a document assisting in a misrepresentation or fraud) but rather a security or surety ship agreement. The letter of guarantee is commonly provided by a bank and declares that it will hold the carrier harmless for claims up to a certain sum that may arise from the delivery of goods to a particular person who is unable to surrender the original bills of lading in return for the goods”. 

The above relates to situations when dealing with a lost full set of original Bill of Lading and with delivery to country not supporting the Express release of cargo based on electronic or fax transfer of Bill of Lading document. 

A key factor of the final resolution of this logistic issue or any other is a proactive approach and swift actions to secure client’s cargo, prevent loss and reduce costs resulting from this situation. 
    Inform all parties whom may be concerned about the situation.
    Instruct the Steamship line to block the release of the cargo to unauthorized person presenting original set of Bill of Lading.
    Track back the shipping of the set of original Bill of Lading, initiate campaign to look for them, make sure that the right people are alerted, follow-up the research actively.
    Negotiate the storage fees with the port of import provider where cargo is located.
    Initiate the procedure of issuing the Letter of indemnity with the client and the bank approved to guarantee.

Per our experience, a few recommendations to mitigate the risk for your client losing the full set of original Bill of Lading, you can put in practice:
    Keep in archives at least one original set of Bill of Ladings by security
    Send to consignee one set of originals, if not received send another one
    Track and trace the cargo and original Bill of Ladings
    Be proactive and do regular checks of shipment and documents delivery status
    Provide updates and communicate with customer.
    Where commercial aspects and/or import customs law do not require issuing the original set of Bill of Ladings, the Express Bill of Lading type might be preferred solution for faster and smooth cargo release from the Steamship Line.

To conclude, every life situation has solution and often more than a sole one. All you need to do is keep looking around for possibilities how to solve the problem and stay positive. The same holds true for  logistics; there are lots of options for proactive and creative people to deal with issues. What matters are your approach and your engagement to the customer in bringing him the value added and satisfying his needs in business.