What Is Bill of Lading Clausing and How Is It Done for Steel Cargo?

The mate's receipt is issued by a ship's officer when cargo is received on board and acknowledges its receipt. In practice, the bill of lading is very often prepared from the information on the mate's receipt.

This is why remarks need to be entered accurately and completely on the mate's receipt in the first place. Adding a defect to the bill that was never on the receipt can be difficult in practice and is likely to cause friction between the parties.

A clean bill of lading states that the cargo was shipped in apparent good order and condition and carries no adverse remarks. A claused bill contains notes indicating visible defects in the cargo.

Commercially, clean bills are generally preferred; banks looking for clean documents under letters of credit are one reason. That can put pressure on the shipper's side to avoid remarks. Failing to record visible defects, however, can leave the carrier facing claims for damage that existed before loading.

Remarks are based on observations made during the pre-loading survey and during loading. The defects most often recorded on steel products vary by product type but generally fall under these headings:

An effective remark is clear, observable and traceable to specific items. It should state the type of defect, its extent and which items are affected. Rather than one blanket statement for the whole shipment, the numbers or count of affected items can be given.

Vague or unsupported generalisations weaken a remark, while recording a defect that was not observed invites objection. Keeping the wording consistent with the survey report and photographs makes the remark much easier to support later.

In practice, remarks are written in short, fairly standardised phrases, such as partly rust stained, edges dented, wrapping torn or bands missing. Even with brief wording, identifying the affected items by number or count strengthens the remark considerably and makes it far harder to dispute at the discharge port.

The master decides which remarks are entered on the bill of lading. The surveyor supports that decision with independent observations and, if instructed, prepares a list of suggested remarks.

Shippers and masters may disagree on the wording. In that situation, findings backed by photographs and clearly identified defective items keep the discussion grounded in facts rather than opinion.

A surveyor's list of suggested remarks is not binding; the master weighs it against their own observations and the owners' instructions before deciding what goes on the mate's receipt.

Shippers sometimes offer a letter of indemnity in exchange for a clean bill. The general position of P&I clubs is that arrangements concealing visible defects should be approached with great caution, and the matter raises questions of insurance cover and legal consequences that need separate consideration.

When faced with such a request, it is common practice for the master to contact the owners and the P&I club. This article is not legal advice; specialist advice should be taken in any specific case.

Inspecting cargo before loading means defects are identified before operations start. Defective items can then be reported to the shipper, possibly replaced or set aside, and remarks can be prepared without turning into a last-minute dispute at the gangway.

Karan Gözetim provides pre-loading surveys from its base in Gemlik; whether a list of suggested remarks is included in the scope is agreed at quotation stage.