What is a Switch bill of lading?

Answer 1

"Switch" bills of lading are a second set of bills of lading issued by the carrier (or by the carrier's agent) in substitution for the set issued at the time of shipment. The agent who is asked to produce the second set is often not at the load port. The holder of the bills may decide, for one reason or another, that the first set of bills is unsuitable, and the carrier is put under commercial pressure to issue switch bills to satisfy his new requirements. Some of these reasons are:

• The original bill names a discharge port which is subsequently changed (perhaps because the goods have been resold);

• A seller of the goods in a chain of contracts does not wish the name of the original shipper to be known;

• The goods were shipped originally in small parcels, and the buyer requires one bill of lading covering all of the parcels to facilitate his on-sale.

The perils of having two sets of bills of lading in circulation for the same cargo are obvious and shipagents must make sure they follow these rules:

• The principal's written authority should be obtained to issue switch bills;

• They should only be issued if the first complete set has been surrendered;

• They should not contain misrepresentations, eg as to the true port of loading, or the condition of the cargo. If switch bills contain misrepresentations, the carrier/agent will be at risk of claims from parties who have suffered a loss because of such misrepresentations.