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In a very brief wording, "Switch B/L" is B/L substituted by a carrier for an original B/L in accordance with the terms of a Letter of Credit, i.e. In a back-to-back L/C, for example, the original B/L (which shows the actual supplier as the shipper is switched with another B/L that shows the middleman as the shipper and protects the identity of the actual / real suppler.
This is one of the practical questions posted on Bayt.
Switch B/L means a second set of B/L issued by the carrier. In practice, in many situations an organization would request for it. An example will help to understand all other readers easily :
A) Company X imports shipment from company Y for Company Z. it is quite simple, a UAE company imports from USA, on the name of a Company in Kuwait. The supplier is in USA, consignee in Kuwait and seller is in UAE. UAE Company doesn’t want to reveal his cost/purchase price to his customer in Kuwait. Company X will ask his freight agent / carrier to prepare a ‘switch B/L by surrendering the original B/L. Company X can replace the original shipper by attaching invoice, packing list & CoO from X for destination clearance.
B) Company X is seller, Y is buyer and Z is supplier. Whenever Company X accepts a transferable L/C from company Y, in most of the cases switch B/L required for L/C clause compliance.
C) “C” terms delivery shipment whenever arrives at destination and re-route to another port.
D) Finally buyer need to consolidate small shipments in one place and send all the consolidate shipments under one B/L
If a seller wants to conceal his cost / purchase price from a buyer for a direct delivery from his supplier
Whenever you use a ‘mirror’ (back to back ) L/Cs
To hide shipper’s information and expressing middle party as shipper
Generally the situation on which a shipment is planned to move thorough Switch BL is when there has been a change in the original trading conditions.. Some of the reasons could be :
Goods could have been resold and the discharge port has now been changed to another port and this could have occurred as a high-seas sale..
The seller (who could be an intending agent) does not wish the name of the actual exporter to be known to the consignee in case the consignee strikes a deal with the exporter directly..
The seller does not want to know the buyer to know the actual country of origin of the cargo so he requests that the port of loading be shown as some port other than the one the cargo was loaded from..
