Switch: bill of lading

What is a switch bill of lading?

A switch Bill of Lading can be considered as a second set of Bill of Lading that is issued by the shipping carrier (or their agent) for substituting the original bills of lading and is issued at shipment time.

The information presented over the switch bill of lading, is put forth because of various reasons, and is edited intentionally as it is not meant to be identical to the original bill of lading it replaces.

Just like the original, the switch Bill of lading serves as:

• A receipt for consignment (for the destination agent)
• Act as an evidence of carriage contract (a contract between the shipper and the carrier)
• Document for the title to the goods (consignee will need at least one original bill of lading in order to receive the consignment)

In most cases, switch bill of lading is used for editing the shipper information, i.e. to replace the actual factory details with the trading agent’s one. Thus there can be various motives because of which a switch bill of lading is requested.

Why do traders require a Switch bill of lading?

Switch B/Ls can be issued after the surrender of the original bill of lading or may be required if any of the three parties wants to get involved directly within the purchase or sale of the cargo: this will include direct interaction with the cargo owner/seller (who can be an authorized representative), the trade agent, as well as the end buyer.

Switch bill of lading is requested for different purposes:

• When there are certain changes within the original trading conditions ;
• Consignments have been resold and the previous discharge port has switched to another port ;
• The seller (intending agent) do not want the consignee to know the actual exporter because consignee may strike a direct deal with the exporter ;
• The supplier doesn’t want the buyer to know the country of origin for the cargo being shipped. Thus he requests to change the port of loading to be shown as some other port.

When can “switch” bills be issued?

The issuance of this switch bill of lading or we can say the second set of bills of lading can be an extremely dangerous practice. The fact that you are having two sets for bills of lading in favour of same cargo can make it a little complicated and thus shipping agents must ensure that they follow these rules:

• the principal’s written authority must be obtained not only for the issuing of switch bills of lading but also for any change that has to be made in the content of the original bills of lading;
• the switch bill of lading should be issued only after the complete surrender of original bill of lading for cancellation;
• There should be no misrepresentations within switch bill of lading, e.g. original port of loading, the exact condition of the cargo, date of loading of consignment.  If switch bills get issued having misrepresentations, then the carrier as well as his agent will be at high risk for getting claims from parties who have suffered from a loss because of some misrepresentations within switch bill of lading.

Switch Bill of Lading example

For requesting a switch bill of lading a standard procedure has to be followed for ensuring a smooth process. Let’s take an example to understand how a switch B/L could be requested and processed.

Take three parties in consideration:

• Party A: factory who produce the goods
• Party B:  trade agent who sell the goods
• Party C:  final buyer

The original bill of lading is issued with party A being the shipper and party B as the consignee. The cargo owner can later request for a switch bill of lading for listing party B as the shipper and party C as the consignee.