In triangle trades, a switch bill of lading is used to make sure that a bill of lading is provided for each transaction that takes place
Triangle deals occur frequently in international trade. When importers buy products from abroad, they might not always be buying them directly from the factory but rather from an intermediary or broker who may be based elsewhere.
The actual movement of the products does not, therefore, accurately reflect the transaction that is taking place. Even though the products might be sent straight from the producer to the importer, the business transactions take a different route.
When it comes to the paperwork, all of the commercial transactions contained in the shipment must match the shipping documents. The factory sells the goods to the merchant, who then sells them to the importer in a straightforward triangle deal.
A second set, or switch bill of lading, must be generated for this shipment since a bill of lading must be issued for each transaction that occurs. The factory must be listed as the shipper on the initial batch of bills of lading, and the trader must be listed as the consignee.
This initial set of bills of lading will be "swapped" out for a second set once the products have been fully released from the factory to the trader (i.e., the trader has paid the factory for the items). The trader is named as the shipper on this second set of bills, and the importer is named as the consignee.
Please be aware that the shipment cannot be released to the ultimate purchaser until the trade terms between the purchaser and the seller of the first transaction have been resolved.
The cargo can be released to the second buyer after the seller has been paid and the trade terms have been agreed upon and the second buyer has presented Beeontrade with the original bill of lading.
However, if the second buyer gives our team the original bill of lading before the trade terms between the buyer and seller of the initial sale have been resolved, there can be delays. Consider using an express switch bill to prevent these delays.
When might the need for a switch bill of lading arise?
A switch bill of lading is typically used to mask the factory's identity. The trader does not want to identify the factory from where they are sourcing the items because they are selling them to the importer.
A switch bill of lading will therefore frequently be requested by the trader for their shipments.