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What is a Switch Bill of Lading: Guide to its meaning and uses

A Switch Bill of Lading is a type of Bill of Lading issued in substitution for the original bill. In this blog, learn about its benefits, usage and format.
switch bill of lading
A Bill of Lading is issued by the carrier company to the shipper, which acts as proof of contract for the goods being shipped. The shipper then transfers the bill to a consignee after receiving the final payment. The consignee is only allowed to take delivery of the cargo after presenting the original Bill of Lading to the carrier. A Switch Bill of Lading is basically a second set of Bill of Lading, issued in substitution for the original bill for any changes to be made during any stage of the shipment.

What is a Switch Bill of Lading?

Switch Bills are used to replace the shipper and consignee details from the original Bill of Lading. It is issued to replace the original Bill of Lading that is given at the time of shipment. Sometimes, there are a few changes in the deal or conditions, which are updated in the Switch Bill of Lading1.

Why is a Switch Bill of Lading issued?

When switch bills are issued, the first set should be given to the carrier in exchange for the new one. Some of the reasons to issue a switch bill are2:
• If the cargo’s destination needs to be changed to another port, a Switch Bill of Lading is issued as the original bill.
• Any custom authority or the buyer or consignee can request the cargo description to be modified or edited at the final destination.
• The customer or importer prefers to have only one Bill of Lading covering all the details because earlier the goods were shipped in small parcels on separate bills.

How does the Switch Bill of Lading work?

The switch bill can only be issued in the place of the original Bill of Lading. However, the Switch Bill of Lading is different from the original bill of lading but has a few similar uses:
• Acts as the receipt of goods.
• Acts as a valid contact between the shipper and the bearer of the shipment.
• Lists details of the goods.

It is an important document when goods are being shipped across international borders. It consists of all the information about the cargo being transported and thus, it is critical in terms of transparency and adhering to laws between two or more countries.

Format of a Switch Bill of Lading

Below are some of the components included in a Switch Bill of Lading are:

• Details of the exporter and the importer
• Booking number and Master Bill of Lading number and its issue date
• NRA (Negotiable Rate Arrangement) number, which is a document exchanged between the shipping and the Non-Vessel Operating Common Carrier (NVOCC) to ensure that all the rates are regulated and accepted before shipping
• Details of the place of pickup and delivery
• Details of the port of loading and unloading
• Vessel and voyage details

Features of a Switch Bill of Lading

Some of the features of a Switch Bill of Lading are3:
• A new set of Bill of Lading is issued in the form of a Switch Bill of Lading when a seller of the goods does not want the name of the original shipper to appear on the bill.
• The original bills are held in the country of shipment.

What are the benefits and risks associated with a Switch Bill of Lading?

Benefits:

• An exporter can use a Switch Bill of Lading to receive payment from the importer before paying the shipper or the original manufacturer of the goods.
• The custom authorities or the buyer at the final destination request the cargo description to be modified.

Risks:

• Different versions of Bill of Lading can present a risk of the carrier delivering goods to the wrong person.
• Creating inaccurate details like shipment date, shipper or consignee name, quantity etc.
• Changes and impact on jurisdiction clause or different freight rates.
• Switch Bill of Lading may be used to draw fraudulently on a letter of credit or to defraud a seller/buyer.

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Frequently Asked Questions

Who issues a Switch Bill of Lading?
A Switch Bill of Lading can be issued only if requested by the cargo owner. Only the party that has complete set of documents can ask for a Switch Bill of Lading as this bill represents ownership. After the request has been made, only the freight forwarder or carrier can approve the request.
Can a Bill of Lading be revised?
During the export logistic process, a few changes in shipment details or cargo details can be expected. A Bill of Lading can be revised accordingly.
Published on August 29, 2022.

Sources:
1. https://www.itic-insure.com/fileadmin/uploads/itic/Documents/BOL/Issuance%20Switch%20Bill%20of%20Lading.pdf
2. https://shippingandfreightresource.com/wp-content/uploads/wp-post-to-pdf-cache/1/what-is-a-switch-bill-of-lading-and-when-and-why-is-it-used.pdf
3. https://law.nus.edu.sg/wp-content/uploads/2020/04/011_2019_Miriam-Goldby.pdf
4. https://www.tradefinanceglobal.com/freight-forwarding/switch-bills-of-lading/
5. https://nacin.gov.in/resources/file/e-books/Bill%20of%20lading.pdf
6. https://www.icontainers.com/help/what-is-port-to-port-shipping/
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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.

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