A Switch Bill of Lading is a term that comes up occasionally when it comes to cargo shipping, and many may be confused as to the term and what it means. The Switch Bill of Lading is a secondary bill of lading that can be put forth to replace the first set of bill of lading at the point of origin.
The Purpose of Switch Bills
These sorts of bills are generally requested if a change has been effected from the original conditions of the trade shipment. If, for example, goods are resold and the destination port is changed from the original, the seller wishes to obscure the original exporter’s identity, or the seller wants to hide the point of origin of the industrial packing shipment.
Often, the idea is to keep buyers from striking direct deals with the exporter, and thus removing an intending agent from the equation, or otherwise confusing some aspect of the shipping because it would in some way be unfavorable to the company issuing the switch bill.
Shades of Grey
As you might expect, the use of switch bills of lading can be viewed as grey at best, and at worst, a fraudulent practice, though this depends upon the exact reasons why the replacement bill was issued.
Misrepresenting the original shipping conditions is a real danger when it comes to switch bills of lading, and any whisper of such an issue, any information that seems in any way contrary to the original set of documents, is fraudulent and criminal.
Naturally, shipping companies want to defend against these issues since being accused of fraud not only affects the reputation of a shipping company, but can interfere with their ability to do business in the future.
Generally, it’s not worth the hassle, so companies have to be very careful about issuing switch bills of lading. There are several things that must be done to be sure that the shipping company is protected from such accusations.
Protection from Fraud
In order to defend themselves from claims of fraudulent practice, many companies who issue switch bills of lading on industrial packing shipments, make sure that their insurance policy covers the use of these bills. They must be exceptionally detailed as to the reason for issuing a switch bill of lading, and get written permission from the original shipper, especially if acting as an agent for the original shipper.
In addition, it is important to carefully track paperwork, making sure that there are no discrepancies between the original bill and the switch bill, and that the new bill does not misrepresent the original shipping conditions.
Understanding and Awareness
The most important protection against accusations of fraud is to be sure that both the original shipper and the buyer are made expressly aware of the conditions of the switch bill, and that they fully understand the terms and conditions under which it was issued. All documentation must be meticulously maintained to avoid any instances of misrepresentation or contrary information.
If you need advice or information regarding shipping your cargo, no matter what medium you choose, please drop us a line. We’ll help in any way we can. For more info, please visit our cargo protection page.