X You are participating in the sale of a shipment of three parties, four sides, ... and need to learn what is the actual Bill Switch? How important is it an important role in exporting and importing?
X You want to know if the use of Switch Bill is prone to any risk? Which side will be responsible for approving the Bill Switch?
X You are not aware of the process of performing the Switch Bill?
Proship.vn we will detail what Switch Bill is, what role Switch Bill has in import and export activities, using Switch Bill has any risks, the process of Switch Bill as the steps like how, ... right after.
What is Switch Bill? Which unit approves Switch Bill?
You wonder what Switch Bill means and which unit will approve Switch Bill? Join Proship to read the following content to get the answer:
What is Switch Bill?
What is Switch Bill? Switch Bill or "Switch Bill of Lading" used to replace the original bill of lading. This document is applied in goods trading, with the participation of intermediaries. The purpose of Switch Bill is to change the manufacturer's information.
The role of Switch Bill
Switch Bill plays an important role in international trade transactions, especially with the participation of intermediaries, in particular, Switch Bill helps:
- Information security of parties:
When using Switch Bill, detailed information of imported and export companies will not be disclosed. As a result, the two sides cannot know each other's true identities, help ensure the interests of the intermediary and prevent direct trading transactions without intermediaries.
- Save on shipping costs:
Switch Bill allows goods to be transported directly from the production site to the imported place without the inventory of the intermediary. This helps minimize shipping costs and delivery time.
- Enhance the flexibility in transactions:
Switch Bill makes it easy for the parties to change information on the bill of lading, such as the manufacturer or shipper, in accordance with the requirements of each transaction without affecting the shipping process.
The unit is responsible for approving Switch Bill
The shipping company or Forwarder is the authorized unit to approve the Switch Bill. These parties have the authority to check the differences between the two bill of lading (the original bill and the bill of lading required the switch) and the signing.
Incoterm conditions should be used in Switch Bill and note that it is necessary to know
Join Proship to continue to find out what the Incoterm conditions should be used in Switch Bill and what to note when using the following:
Incoterm conditions should be used in Switch Bill
Once you have identified the Bill Switch, the intermediary needs to clearly identify the delivery conditions and use the appropriate form of payment, select the right provider of reputable shipping services.
With intermediaries will always win the right to book ships. But to be able to do this, there should be 2 contracts signed between A and B, between A and C. At this time, there will be some conditions for this group:
- Party A signed a contract with Party B, Party A will have the role of an importer, so they use the delivery conditions to win the right to book a ship. The payment method used is L/C payment
- Party A will sign import and export contracts for Party C. At this time, Party A will turn into an exporter of goods to win the right to book a ship. Party A will sign a contract under the condition of Party C and apply that method is TT.
- After Party A has signed a contract with the parties will need a transport unit to support Party A to perform the Bill Switch.
Note when using Switch Bill of Lading
When using Switch Bill of Lading to convert the original bill of lading, note:
- Information is changed in Bill: shipper, consignee, Cargo Description;
- Information has not been changed including: Port travel, loading port, quantity of goods and packages;
- Note that the initial bill of bill and the Switch bill of lading should be the same.
Common risk when using Switch Bill
What are the common risks when using Switch Bill? That may be:
Risk of fraud
If a shipment has more than a set of bills of lading together, it can lead to the situation that many people receive goods in the same valid original version at the destination port. This may cause a dispute over the ownership of goods. The legal consequences that arise from which may be very serious for the last shipping and the recipient.
Legal risks
The use of Switch Bill can cause unintentional conflicts, even violating laws in different countries. Therefore, when commercial transactions need to master the relevant laws in different countries, especially when Switch Bill is released in another region than the original B/L.
Loss of protection and insurance compensation
The illegal use of Switch Bill can lead to loss of protection and compensation insurance. For example, if describing the goods in Switch Bill is discovered incorrectly, the compensation may be affected, even rejected by the insurance unit.
Process of implementing Switch Bill of Lading
The process of implementing Switch Bill of Lading is as follows:
Bill 1 (virtual bill of lading)
After signing a sales contract with both A (exporter - seller) and C (importer - buyer), intermediaries B asks sellers A in China to deliver goods and appoint Forwarder to issue B /L is as follows:
- Shipper: Seller a;
- Consignee: Intermediate B (if paid T/T) or L/C issuing bank for B (if payment L/C and L/C content should be noted to accept House B/L);
- Husband and loading port: China;
- Hang Hang Hang Port: Vietnam.
Bill 2 (Switch from the bill of lading 1)
After the bill of lading 1 was released and the intermediary B received the goods from Party A at the Chinese port, Party B conducted payment to Party A and received a full set of delivery documents.
At this time, the shipment is completely owned by Party B and requires the Forwarder Switch B/L by canceling B/L 1 (virtual bill), followed by new B/L release (real bill) with information :
- Shipper: Intermediate B;
- Consignee: buyers C;
- Husband and loading port: China;
- Hang Unloading Port: USA;
- Description of aviation (may change if necessary).
Once the Switch B/L has been granted as required, Party B gathers a new delivery document and sends it to the buyer C to select the goods at the port of destination in the US.
Hopefully the above knowledge sharing has helped you understand what Switch Bill is , how important it plays in import and export as well as how the bill of lading conversion is. Proship Logistics is proud to be one of the units specializing in providing KBHQ services, multimodal shipping services and advice to businesses of papers, vouchers, railrisions/sets/sea/aviation , ... Contact 0909 344 247 for supporting service you are interested.
