BILLS OF LADING: POSSESSION, TITLE & OWNERSHIP

“BILLS OF LADING: POSSESSION, TITLE & OWNERSHIP”

 In relation to bills of lading, what is the difference between Possession, Title and Ownership.. Example would be where cargoes are in dispute etc and a totally unrelated party is holding the bills.

The word possession in relation to cargo and BL’s could mean to hold-with or without ownership. In other words, BL possession falls to the party holding them at the particular time or the custodian at time of dispute or discussion. This person might be the cargo owner or another party in the supply chain.

The nature of international trade provides a tendency for BL’s falling in several hands. For instance, the BL’s may be in custody of the cargo supplier who maintains possession in lieu of pending payments or for other reasons before dispatching them to actual cargo owner.

 Freighting agents, shipping agents, customs brokers and forwarders at some point are likely to be in possession of the BL’s to execute the various roles assigned to them. Banks in L/C payments also get to posses the BL’s as they move through documentary credit processes.

Being in possession of BL’s does not give one ‘title’ to the goods unless they are the rightful holder of the BL’s through the necessary provisions such: being the named consignee, through endorsements or through legal provisions such as the rule of law.

In fact there are known occasions where BL’s in possession of wrong hands dubious means such as lost & found and through fraudulent activities

 ‘Title to the goods’ refers to legal right to claim, own and use the goods as one may wish. Title to the goods may come with or without possession. This is simply because ‘title’ is more of a legal right to claim ownership to the goods.

There various ways through which one may gain title to the goods. The most common way is where the title lies to the actual consignee as named on the bills of lading (straight BL’s).

Banks may also gain title to the goods through L/C financing in the event that the consignee is unable to repay the bank money paid out on his behalf as per the L/C terms and conditions.

A trader in international trade may gain title to the goods in the event good are sold and BL’s endorsed in his favor (to order BL’s).

Shipping lines and shipping agents have lien in respect to unpaid freight. The lien may give them title to the goods in the event the freight charges remain unsettled and the owner fails to pay the same within the stipulated period as evidenced by the BL.  Other interested parties may also petition through the courts of law and with enough reason and be awarded title to the goods. Example could be trader owed money by consignee and who may want to recover their amounts through applying for title and ownership to the goods.

The party holding title to the goods is deemed to be the owner of such goods. Actual cargo ownership is obtained by applying for the goods from the person or company holding them on behalf of the carrier. This might be a ship owner, a shipping agent or a port/ terminal authority on appointed by the carrier.

The shipping practice across the world entails one original bill of lading being presented to carrier in exchange of cargo. Upon receipt of the cargo, the consignee gets actual cargo possession and ownership of the goods. During this stage, the bill of lading has served its purpose and is referred to as “an accomplished BL” or “an exhausted BL” and it serves no more important function other than a reference document to both the carrier and the consignee.

Any contribution or comments> petermainamics@gmail.com

PANAMA CANAL

The history of the Panama Canal goes back to 16th century. After realizing the riches of Peru, Ecuador, and Asia, and upon counting the time it took the gold to reach the ports of Spain, it was suggested that by cutting out a piece of land somewhere in Panama.

The trips would be made shorter and the risk of taking the treasures through the isthmus would justify such an enterprise.

Constructions started in 1881

A survey of the isthmus was ordered and subsequently a working plan for a canal was drawn up in 1529. The wars in Europe and the thirsts for the control of kingdoms in the Mediterranean Sea simply put the project on permanent hold.

The ships for which the canal was designed are now long gone. Modern shipping has increased the size of ships. The increase in the tonnage in which can be carried has thus caused problems for the canal. The canal can only accommodate ships carrying up to 65,000 tons of cargo, but recently ships which are able to carry 500,000 tons have been introduced.

The problem of the ever-increasing size in ships has caused discussion into the construction of a new canal joining the Pacific and Atlantic oceans. There have been discussions on three alternative routes for a new canal, through; Columbia, Mexico and Nicaragua. The Columbian and Mexican routes would allow for the construction of a sea level canal, whereas the Nicaraguan route would require a lock system.

Despite the limit in ship size, the canal is still one of the most highly travelled waterways in the world, handling over 12,000 ships per year. The 51-mile crossing takes about nine hours to complete, an immense time saving when compared with rounding the tip of South America.

More to follow

ONLINE SHIPPING TUTORSHIP 2013/14 CLASSES

Institute of Chartered Shipbrokers is one of the most recognized shipping professional and examining body for shipping courses.

ICS trained professionals are highly accredited for their skills, industry contribution and continue to play a leading role in the shipping and logistics.

Many colleges and training institutes have been offering this courses especially in Mombasa Kenya where shipping courses have become most popular.

Most students are however unable to join colleges due to increasing cost of tuition fees and requirements

Did you know you can do self study and sit for the exam after registering as a candidate and enrolling for the subject units?

Do you know the leading colleges where you can get this shipping courses?

Did you know Institute of Chartered Shipbrokers has a very active branch office in East Africa?

Did you know there are online tuitorship programs offered by individual training professionals?

For full guidance and assistance on how to study and become a professional in this growing global shipping industry, please contact: petermainamics@gmail.com and discuss the available options

GoAGT Ltd. launches new range of maritime armed security teams

GoAGT Ltd. launches new range of maritime armed security teams

Friday, 05 April 2013 | 00:00

 

GoAGT Ltd. is to introduce a new, simplified range of security teams delivering excellence in the on-going fight against piracy and the threat of hijack.

The firm, a leading maritime security operator, has a 100% success rate guarding client ships on over 1,500 transits through the High Risk Area of the Indian Ocean.

GoAGT Ltd. employs over 200 ex-Royal Marine, Army, and Naval personnel, all holding at least eight years exemplary military service.

Now GoAGT Ltd has developed tiered security team options so clients can choose exactly the right team to suit their needs.

• Diamond Service - Both the team leader and team members are British – aimed at the major oil companies.
• Platinum Service - A British team leader with European team members – high quality security at a lower daily rate than the Diamond Service.
• Gold Plus Service - A British team leader with Filipino ex-marines as team members – ideal for mid to long-term transits.
• Gold Service - A European team leader with Filipino ex-marine team members – an economic option for vessels spending long periods in the High Risk Area.

GoAGT Ltd. Chief Operating Officer and renowned anti-piracy authority Gerry Northwood said: “We want to offer ship owners quality and choice through a clearly defined standard of service. Our clients will know exactly what they’re getting for their money. Having the right level of protection going through the Gulf of Aden remains crucial. Pirate gangs continue to mount frequent attacks on merchant vessels.”

Every GoAGT Ltd. armed security team comprises a leader accompanied by either two or three armed guards. All are fluent in written and spoken English.

The firm’s training and screening of all security personnel goes further than current industry best practice, ICoC, IMO and BIMCO Guidance.

This month GoAGT Ltd. again upgraded the technical kit its teams take to sea as it pushes for ISO28007 accreditation.

Former Royal Navy Captain, Gerry Northwood commanded a successful anti-piracy deployment around the Horn of Africa 18 months ago. He is available for interview and can be contacted on +356 22 48 71 00.

Formed in 2008, GoAGT Ltd. is now one of the best known names in the maritime security business. At any one time 160-180 of its security guards are at sea. The company recruits from the UK Royal Marines, Parachute and other Army regiments with front line experience, as well as the Irish Navy, Estonian Army and Filipino Marines.

It conducts extensive background checks on all security personnel, including verification of military service, academic qualifications, criminal record checks, and medical history.

Source: GoAGT Ltd.

WEEKLY PIRACY UPDATE for 28 Mar - 3 Apr 2013

Friday, 05 April 2013 | 00:00

Regional Considerations:
All masters are advised to maintain heightened vigilance when at anchor and when loitering/queuing as there may be a higher likelihood of these vessels being targeted by pirates. The uniform risk to merchant vessels throughout the HRA is a reminder of the need to be alert for such activity at all times. In order to mitigate any vulnerability, it is strongly recommended that all vessels maintain a high state of readiness, implementing BMPs and citadel preparedness, while in the HRA.

Sailing yachts should avoid transiting the HRA. Past activity has shown that pirates will attack both large and small yachts passing their way. Despite the fact that attacks on merchant vessels appear to have decreased, the possibility of attacks and the successful pirating of sailing vessels remains likely due to their vulnerability and the reduction of revenue sources from pirated merchant vessels.

There have been a number of incidents reported to counter-piracy organisations in the HRA involving small craft approaches to merchant vessels. Although these incidents may appear to be piracy related, the majority actually are not and have been assessed as non-piracy related activity common to the pattern of life in the area. This can include fishing, small vessel trade, smuggling and other local traffic.

Fishing vessels may approach a merchant ship to maximize fishing opportunities or to safeguard fishing nets and fishermen may carry small arms. It is not uncommon for fishing vessels to follow merchant and large vessels in order to capitalise on the often increased numbers of fish in the resultant wake. Please note that, if the NATO Shipping Centre assesses an approach or incident to be piracy-related, we will issue relevant warnings.

Weather:
With the onset of the transition period following the North East Monsoon, sea states have become increasingly conducive to piracy operations.

Piracy Threat:
The threat of piracy against merchant shipping continues throughout the entire HRA. Successful disruptions by naval forces over the past few months, in conjunction with masters’ adherence and implementation of BMP4, have significantly reduced the pirates’ ability to capture vessels. However, pirates are able to act far off the coast of Somalia and are likely in search of vessels of opportunity.

Pirate Tactics:
Pirate Attack Groups (PAGs) have made “soft-approaches” on merchant ships transiting the HRA. A skiff will often approach a vessel to probe the reactivity of its embarked security team, if present. If they elicit no response, the pirates may then proceed with an attack, sometimes accompanied by a second skiff. This practice seems designed to allow pirates to avoid needless expenditures of ammunition and personal risk without a significant probability of success.
Continued Vigilance and the use of BMP:

Merchant vessels are advised to remain vigilant throughout the HRA and ensure that Self Protection Measures are implemented as recommended in BMP4. Prudent and timely implementation of all recommended actions and ship hardening measures in BMP4 can make the critical difference of being approached, attacked, or pirated. NSC would like to remind masters that BMP4 highly recommends maintaining best possible vessel speed when transiting the HRA to deter pirate boardings.

Registration & Incident Reporting:
As per Section 5 of BMP4, early registration with MSCHOA before entering the HRA and initial and regular reporting to UKMTO are highly recommended to ensure military authorities are aware of a vessel’s passage and vulnerabilities.

It has been observed that some Masters are choosing to phone their Company Security Officer (CSO) first in the event of a piracy incident. However, one of the fundamental requirements of BMP4 is that UKMTO is the primary point of contact for merchant vessels during piracy incidents in the HRA.

 

This aims to avoid unnecessary delay and prevent inaccurate or incomplete information from reaching military commanders. CSOs should ensure their ships’ security plans reinforce the BMP4 recommendation that UKMTO be immediately telephoned at +971 50 55 23215 in the event of any piracy activity. UKMTO will then make it a priority to contact the CSO with any information received whilst ensuring the relevant information reaches the military commanders without delay.

 

Masters should provide as much accurate information as possible. This will ensure the incident can be fully assessed and information is quickly provided to other ships in the area for their awareness and vigilance.

Masters should provide as much information as possible about the incident. If Masters are able to take pictures and/or video of the suspicious activity safely, please provide these via email to UKMTO at ukmto@eim.ae, NATO Shipping Centre (NSC) at info@shipping.nato.int or MSCHOA at postmaster@mschoa.org. This information will be used by Counter Piracy forces. Pictures supplied from an attack on a merchant vessel have previously led to the rapid release of a pirated dhow.

Source: NATO Shipping Centre

THE PRACTICAL APPLICATION OF GENERAL AVERAGE

THE PRACTICAL VIEW OF GENERAL AVERAGE

By Peter Maina (MICS), Shipping & Logistics Professional, Trainer: Mombasa, Kenya: 04/05/2013.

The law of general average is a legal principle of maritime law applied by shipping lines and ship owners in solving maritime accidents which are deemed to have been deliberate encountered with intention of saving the adventure from incurring a total peril.

According to law of general average, all parties in a sea adventure proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo incurred deliberately to save the whole adventure in an event of emergency that was likely to result to a total loss.

In the event of a danger faced at sea, crew members often have precious little time in which to determine precisely whose cargo they are jettisoning ie. to be thrown overboard. Thus, to avoid quarrelling that could waste valuable time, there arose the equitable practice whereby all the merchants whose cargo landed safely would be called on to contribute a portion, based upon a share or percentage, to the merchant or consignee whose goods had been thrown overboard to avoid possible total loss.

For example, a ship arriving at the port of Mombasa may face a risk of sinking while approaching the port. If the shipmaster and the crews realize the ship is about to sink due to much weight, they may decide to throw some containers overboard to save the ship from sinking. If they fail to do so, it means the whole ship would sink and all the goods will be lost including the ship, the containers and any other machinery onboard. Thus some cargo will be thrown overboard and the ship becomes safe. In this case, then it is only good for those who benefited to share the loss with those whose cargo was sacrificed to save the adventure. This is what brings about the concept of general average.  

General average traces its origins in ancient maritime law but it remains part of the admiralty law of most countries.

It is effect as per the York Antwerp rules

Usually on arriving at a port of discharge the shipmaster appears before a magistrate or notary public declaring that during the course of the voyage, there occurred an event which led to an extra ordinary sacrifice being made to save the voyage from a total loss.

Extracts from ship logbook are used as evidence. The ship logbook is a booklet containing a record of all events and occurrences on board the ship throughout the voyage and port stays.

For general average to be declared, the following conditions must be clear:

1.      There must be a common danger / or risk

2.      The risk must be real

3.      It must be endangering the risk of all cargoes and not one individual

4.      The loss must have been incurred in effort to save adventure from a total loss

5.      The effort must have been successful

When general average occurs, the losses are shared proportionately by all interested parties who include:

1.      Owners of cargoes – shippers

2.      Charterers

3.      Ship owner

4.      Owners of leased in containers

5.      Owners of hired / leased cargo handling equipments on board at the times

The losses are evaluated and calculated by Average adjusters who are specialists in General average. General average adjusters are special ship / valuation companies who specialize is evaluation the value of loss incurred, its magnitude and also determine each party’s contribution.  

Several conditions and requirements are set by ship owners for his agent to follow before release of cargo as adjusters proceed with evaluation process. It should be noted that a port / shipping agent is relied upon by all parties to ensure general average contributions are received before release of cargo.

To obtain cargo, consignee through his clearing agent must fulfill or submit the / part of the following documents:

-          General average claim form

-          General average valuation form.

-          Bank guarantee / Letter of indemnity

-          Cash deposit if required

The port agent is required to demonstrate his expertise while administering general average by:

-          Professionally advising the consignee and their clearing agents on what is general average, how its incurred and why the costs have to be shared.

-          To keep the clearing agents and the consignees fully informed about position of the ship, cargo and process of general average.

-          To keep all parties informed and to communicate with them on the requirements, contributions and any other details arising.

-          To supervise his staff on the general average procedures so that they can act effectively

The agent earns as a result of his expertise the following:

-          Special fees for executing general average on behalf of interested parties

-          Communication fees / allowances

-          Overtimes for extra hours worked by him and his staff while executing general average

GENERAL AVERAGE DISPUTES.

There have been so many disputes between interested parties on certain circumstances whether they qualify as general average or not. Most people argue that ship owners have attempted to protect themselves from certain expenses by declaring certain events as general average. This has been a source of many maritime legal battles and which continue to be addressed. This cases include:

-          Cases of piracy and hijacking of the ship

-          Deviation of the ship to proceed for repairs

-          Collision of the ship

Question on whether above and others not listed qualify as general average has been at discretion of the courts of law. Many people however argue that most lawyers and judges lack understanding on maritime issues and hence amicable judgments are not arrived at.

I trust for find the write resourceful and helpful to your career and exams. I also trust you can judge circumstance to qualify if they are general average or not.

House Bill of Lading HBL and Master Bill of Lading MBL

House Bill of Lading HBL and Master Bill of Lading MBL
A bill of lading issued by a freight forwarder or NVOCC (Non vessel operating companies) or groupage operator is known as a HBL ie. House Bill of Lading. Once after receiving cargo from shipper after necessary customs formalities, the freight forwarder releases House Bill of Lading HBL to the shipper. House Bill of Lading also is a negotiable document and accepted similar to MBL Master Bill of Lading. Normally HBL House Bill of Lading is issued as per the terms and conditions of Multi modal Transport Document Act. The shipper in House Bill of Lading is the exporter or shipper who delivers goods to freight forwarder and the importer or consignee, the party to whom the cargo has to be delivered by the said freight forwarder.

The freight forwarder after receiving goods from shipper, re-book the same cargo to main carriers who are vessel owners. The main carriers, once cargo received, issues Bill of Lading to whom the cargo booked with him. This is called MBL - Master Bill of Lading. In a master bill of lading, the shipper will be the freight forwarder who delivers the cargo to main carrier and the consignee, the overseas counterpart party of the freight forwarder who receives the goods from final shipper.