What Is a Switch Bill of Lading and Why Is It Used?
A Switch Bill of Lading, also referred to as “Switch BOL”, is a replacement for the original Bill of Lading. It carries updated details about the shipment. This updated document is issued after the goods have left the port but before they arrive at their final destination.
Businesses use it when there is a need to update shipment information mid-journey. One common reason is when goods are sold to a new buyer while still in transit. Another reason is to protect business relationships. For example, a trading agent might want to hide the name of the original supplier to prevent the buyer from dealing directly with them.
Some companies use a Switch Bill of Lading to change the listed country of origin. Others use it to correct shipment details, such as the consignee’s name or the port where the cargo will be unloaded. It is also common in triangle trades, where goods move through a middle party before reaching the final buyer.
Switching the bill allows these changes to happen without stopping the shipment or delaying delivery.
Who Issues and Approves a Switch Bill of Lading?
Only the carrier or freight forwarder can issue a Switch Bill of Lading. This is because they control the official shipment records. No other party has the authority to release this updated document.
The request must come from someone with control over the goods. This is usually the cargo owner, seller, or a trading agent. In some cases, the end buyer may request it if they have written approval from the seller.
Before the new bill is issued, the full set of Bills of Lading must be returned to the carrier. This set usually includes three original copies, all of which must be surrendered. This step prevents two active sets from existing for the same shipment. Once the original set is cancelled, the carrier can prepare the updated Switch Bill of Lading with the new shipment details.
This protects all parties from confusion, double claims, or fraud.
Step-by-Step Process to Issue a Switch Bill of Lading
Step 1: Submit a Formal Request
The process starts when the cargo owner or their authorised agent contacts the carrier or freight forwarder. This request must clearly state the reason for issuing a new bill of lading. Reasons might include resale, a change in consignee, or updating shipment details.
Step 2: Provide the Required Documents
The requester must prepare and submit several documents:
- The full set of original Bills of Lading. All must be returned to prevent duplicate documents.
- A signed letter of indemnity. This document protects the carrier from future legal claims related to the change.
- Written authorisation. Depending on the carrier’s policy, written approval from all involved parties may be required.
Step 3: Carrier or Forwarder Verification
The carrier or forwarder will review the request and documents. They check if the change meets their policies and legal obligations. If anything is unclear, they may ask for extra proof or clarification before moving forward.
Step 4: Cancel the First Set of Bills of Lading
Once approved, the carrier cancels the first set of Bills of Lading. This step removes the originals from circulation. It ensures that only one valid document exists for the shipment.
Step 5: Issue the Second Set of Bills of Lading
The carrier then prepares thesecond set of Bills of Lading. This new set reflects the updated details, such as the new consignee or port of discharge. It fully replaces the cancelled set as the active shipping document.
Step 6: Deliver the New Bill to the Requester
The carrier hands over the second set to the requesting party. This set now becomes the official document used for the cargo’s release at its destination.
What Can and Cannot Be Changed in a Switch Bill of Lading?
What Can Be Changed
- Shipper Details
You can update the name of the seller or trading agent. - Consignee or Notify Party
You can change who receives the cargo or who gets notified on arrival. - Goods Description
You can add more detail or correct the description, but the product itself must stay the same. - Port of Discharge
You can change where the cargo will be unloaded if the carrier approves it. - Issue Date and Location
You can update this based on where and when the new set is issued.
What Cannot Be Changed
- Port of Loading
This cannot change because it must match the actual place the cargo was loaded. - Loading Date
This also cannot change since it ties to the real shipment date. - Dangerous Goods Declaration (DGD)
Details about hazardous cargo must stay the same for safety and legal reasons. - Reefer Cargo Settings
Temperature and storage details for refrigerated cargo cannot change. - Out-of-Gauge (OOG) Cargo Details
Measurements and handling details for large cargo must stay the same. - Original Payment Terms and Legal Clauses
These cannot be altered, as they are part of the contract agreed upon at shipment.
How to Identify a Switch Bill of Lading
The format of a Switch Bill of Lading looks just like an original. That is why carriers, buyers, and customs officials need to check for signs that the document has been replaced. Here are some ways to identify if a Bill of Lading has been switched:
- Check the Issue Date and Location
A Switch Bill of Lading often has alater issue date than the original. The place of issue may also differ if the switch was made at another location. - Look for Version Control or Carrier Notes
Some carriers mark switch documents with internal reference numbers or notes. These notes may confirm that the document is a second set. - Compare Against Shipping Records
Cross-check the details with:- Port records.
- Carrier’s shipment logs.
- Customs declarations.
- Verify Document History with the Carrier
The carrier or freight forwarder should confirm if a switch has taken place. They keep records of all document changes.
Risks and Legal Implications of Using a Switch Bill of Lading
While a Switch Bill of Lading offers flexibility, it also introduces serious risks. Below are the most common issues businesses and carriers need to manage.
Fraud Risk
Switching a Bill of Lading creates the chance for two sets of documents to exist for the same cargo.
If the original set is not cancelled properly, multiple parties might try to claim the shipment.
This could lead to double sales, cargo theft, or payment fraud.
Legal Violations
Changing shipment details can cross legal lines if it is done to:
- Hide the real supplier or country of origin.
- Avoid sanctions, import taxes, or trade restrictions.
If authorities discover this, it can lead to fines, cargo seizure, or legal action against the parties involved.
Insurance Gaps
Some P&I insurance providers do not cover claims if a Switch Bill of Lading was issued in breach of rules. If the updated document contains false or misleading details, insurance may be voided. This puts the cargo owner and carrier at financial risk if something goes wrong.
Carrier Liability
Carriers take on extra risk when they issue a Switch Bill of Lading. If the process is not followed correctly, they could faceclaims from multiple consignees. Mistakes could expose them to legal and financial penalties, even if they acted in good faith.
Best Practices for Managing Switch Bills of Lading
To avoid fraud, legal trouble, or financial loss, businesses and carriers should follow these best practices:
- Verify All Shipment Details First
Double-check the cargo description, country of origin, and shipment dates before approving any changes. - Request a Signed Letter of Indemnity
Get a written statement from the requester that accepts full responsibility for any risks linked to the switch. - Confirm Cancellation of the Original Set
Make sure theentire set of original Bills of Lading is collected and marked as cancelled before issuing a new set. - Keep All Parties Informed
Notify the shipper, consignee, and any agents involved about the change to avoid confusion or disputes later. - Review Your Insurance Policy
Check if your insurance covers claims involving a Switch Bill of Lading. Some policies may limit or exclude this coverage. - Work Only With Trusted Carriers and Forwarders
Use experienced and reliable service providers who follow proper legal and operational checks when issuing switch documents.
Frequently asked Questions about the Switch BOL
Why Do Some Traders Use a Switch Bill of Lading in Triangle Trade?
In a triangle trade, a factory sells goods to a trading company, and the trading company sells to the final buyer. The trading company often switches the Bill of Lading to:
- List themselves as the shipper, not the factory.
- Protect their supplier relationships.
- Manage price control without revealing the original cost or source.
This helps traders stay in control of the deal without the buyer going direct to the factory.
What Happens if Both the Original and Switch Bill of Lading Reach the Destination?
If both the first and second set of Bills of Lading reach the destination:
- Two parties might claim the cargo.
- This could cause legal disputes or shipment holds.
- Carriers may refuse to release the goods until the conflict is resolved.
This is why cancelling the first set before issuing the second set is critical.
