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Letter of Indemnity i/o Bill of Lading

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Thu, 05/26/2016 - 20:03
Trade Inquiry
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Joined: 05/17/2016
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Good Day!

Can anyone enlighten me on the use of Letter of Indemnity specifically for oil shipments instead of Bill of Lading for presentation of documents for negotiation.

Usually, banks will require that the original Bill of Lading be presented to them by X number of days after negotiation date for proper endorsement and all. But in reality, it is not followed by the shipper/buyer, the presentation of this original, and banks are left with just the Letter of Indemnity and a series of follow ups and calls just to present to them the original Bill of Lading.

Why do buyers/shippers give the banks a hard time in this issue?

Thanks in advance!

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Sun, 05/29/2016 - 02:00
#1
pan
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Joined: 09/13/2007
LOI vs B/L

Hi friend,

probably an oil cargo is sold many times when transported from port of loading and an intended port of discharge.

Traders may make contracts and indicate the final destination to the probably chartered vessel, so a bill of lading  is not ready to be presented and cargo will be discharge at destination against a LOI, afterwards all will be completed and settled. A surrendered bill of lading may be adjusted and cargo discharged against a telex release.

Everyone has its experience:

Other comments appreciated-Ciao

 

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