Bill of Lading

A Bill of Lading is a legal document issued by a carrier (e.g. shipping line, airline, or freight forwarder) to the shipper or consignor of goods. It acknowledges the receipt of goods, provides evidence of the contract of carriage, and can function as a document of title in some cases.

In international trade, three original sets of Bills of Lading (B/Ls) are commonly issued. Here’s a summary:

• 1st Set: The first set is retained by the shipper or consignor for their records.
• 2nd Set: The second set is sent to the consignee or their bank for use in taking possession of the goods, customs clearance, and payment
• 3rd Set: The third set is kept by the carrier or shipping line for their records and possible use in the event of discrepancies or disputes.

Main Types of B/Ls:

• Negotiable B/L: This type is transferable, meaning it can be used to claim the goods by the holder of the document. In certain scenarios, a negotiable B/L can be used as a form of payment in trade transactions.
• Non-Negotiable (Straight) B/L: This type is not transferable and indicates that the goods are to be delivered to a specific consignee.

Key Information on a B/L:

• Shipper Information: Names, addresses, and contact details of the shipper (sender).
• Consignee Information: Names, addresses, and contact details of the consignee (receiver).
• Notify Party: Name, contact information (address, phone number, fax number, email), and the role or relationship of the Notify Party, who should be notified about the shipment’s progress and relevant information.
• Cargo Information: Categorized into marks & numbers, cargo description, number of packages, gross weight, and dimensions. 
• Port of Loading: Information about the port or location of loading (origin).
• Port of Discharge: Information about the port or location of discharge or unloading (destination).
• Place of Delivery: The final delivery location (typically the consignee’s address).
• Carrier: The name of the company responsible for transporting the goods (typically an airline, shipping line, or freight forwarder).
• Container Number: A unique serial number assigned to a specific container typically containing four letters followed by seven digits (applicable only to sea freight).
• Seal Number: The seal number of the container (applicable only to sea freight).
• Vessel/Flight Information: Details of the vessel or flight that will carry the goods.
• Freight Terms: Information on freight terms (prepaid or collect).
• Date of Issue: The date when the B/L is issued.
• Place of Issue: Location of B/L Issuance.

Purpose:

• Receipt of Goods: A B/L serves as a receipt issued by the carrier to confirm the acceptance of goods.
• Contract of Carriage: It represents the agreement between the shipper and the carrier for the transportation of goods.
• Title Document (Negotiable B/L): A negotiable B/L can be used as proof of ownership, allowing the holder to claim the goods upon presentation.
• Evidence of Loading: It serves as evidence that the carrier has loaded the cargo onto the nominated vessel/aircraft/truck at the origin.
• Legally-Binding: A B/L is a legally binding document with significance in legal disputes and insurance claims. In international trade, it’s crucial for customs clearance, proving goods receipt, and securing payment through letters of credit.

Key Takeaway: A Bill of Lading (B/L) is a multifunctional document that serves as a receipt, contract of carriage, and, in the case of a negotiable B/L, a title document in international trade. It contains crucial information about the shipment, including details about the shipper, consignee, cargo, transportation, and more. Understanding the types and functions of B/Ls is essential for anyone involved in global trade to ensure the smooth flow of goods and payment.