Best Trade Solution

I don't understand why there is a distinction between ocean BL and charter BL. The basic difference is that ocean BL is issued by the carrier which is the owner of the vessel while charter BL is issued by the charterer who is not the owner of the vessel.

The rational given as to why bank will hardly accept a charter BL as a collateral for loans or payment under a LC transaction is due to the risk that in the event of any dispute between the charterer and the carrier (carrier in the context of charter BL can be referring to owner of vessel or charterer or sub-charterer, am i right?), under the contract of carriage the carrier can call back the vessel and lay claims on the goods onboard the vessel.

In my opinion, even if a shipper don't charter a vessel but have his cargo shipped by a shipping company, there still exist the risk that the shipping company can lay claims to the goods onboard their vessel in the event of any dispute between shipping company and the shipper. Hence, isn't it same risk as a charter BL?

Hi Pal,

the main difference is that bill of lading gives the control of the goods to the holder, CP bill of lading no.
Goods, as per charter party may be delivered without presentation of CP Bill of lading.
Other comments appreciated
Ciao

Hi Picant:


So the ocean/marine/port-to-port bill of lading is a negotiable document of title - consignee/endorsee who holds the BL can claim physical possession of the cargo from the carrier/master/agents.

But holder of a charter party BL might not be able to claim physical possession of the cargo from the master/owner/charterer as the charter party BL is established based on the charter agreement signed between the ship-owner and the charterer; clause inside charter agreement which allows ship owners to call back their vessels and lay claims on cargo onboard their vessel in the event of dispute between charterer and ship owner?

Hi Pal,

the problem is for the issuing bank, mainly. By having a bill of lading it has control of the goods, as guarantee for the issue of l/c. With CP Bill of lading , cargo may be delivered freely as per Charter Party. Normally the vessel is hired in full and the charterer manages it.
Ciao

Hi Picant:


Thanks for the valuable insight. Understood fully now = )