Shippers Face Risks With Dual Consignee Bills of Lading

This article analyzes the risks associated with dual-named Bills of Lading (B/L). It explains the cautious approach taken by shipping companies and freight forwarders towards such B/Ls. The article advises foreign trade companies to avoid using dual names on B/Ls to minimize potential legal and economic risks. It emphasizes the importance of clearly identifying a single and unique consignee, and the necessity of seeking professional compliance solutions to mitigate the risks associated with ambiguous B/L information and ensure smooth trade operations.
Shippers Face Risks With Dual Consignee Bills of Lading

In export transactions, the appearance of two company names as consignees on shipping documents may seem like a simple operational detail, but this practice carries significant legal and logistical risks. Why do shipping lines avoid such bills of lading (B/L), and why do freight forwarders remain tight-lipped about them? This article examines the underlying logic and dangers of dual-consignee B/Ls, offering crucial guidance for trade professionals.

The fundamental issue lies with master bills of lading (M/BL), which typically prohibit dual consignees. The reason is straightforward: in case of disputes, determining which party should receive the goods becomes problematic. If the carrier delivers to Company A while Company B claims rightful ownership, liability becomes legally ambiguous. Shipping companies refuse to assume such potential risks.

While house bills of lading (H/BL) theoretically allow dual consignees through letters of indemnity (LOI), this approach remains exceptionally hazardous. Should complications arise, the freight forwarder assumes disproportionate liability—potentially severe enough to threaten business continuity.

Dual-entity listings appear commonly on certificates of origin or property deeds, but their application to bills of lading requires extreme caution. Workarounds like "O/B" (on behalf of) or "C/O" (care of) may offer partial solutions, but direct dual-consignee listings retain the inherent risks described above.

Trade organizations should therefore avoid dual-consignee B/Ls entirely, designating a single, unambiguous recipient. When special circumstances necessitate alternative arrangements, consultation with legal and logistics experts becomes essential to develop compliant, risk-mitigated solutions—never relying on high-risk instruments like LOIs as substitutes for proper documentation.