What is a Bill of Lading

Import, export business will usually involve bills of lading. The original bill of lading is the key document of title.

The Status of the Bill of Lading

A document in the form of a receipt; a bill of lading (BL) is issued by the office of a ship's master (the carrier) once goods have loaded for shipment. Its principal details are:

Date of loading the consignment
Quantities loaded
Condition of the consignment
Details of the intended recipient (consignee)

The carrier has a responsibility to ensure that the consignment is only to be released to the intended recipient. This makes the bill of lading a legal document of title: Without it the consignee cannot take possession of goods once they have arrived.

Although quantities and condition will be certified, this will only relate to the perceived condition of the consignment. For example if merchandise is being shipped it will be the number and condition of the cartons that is being advised, not their contents. For the rest the carrier relies on information supplied by the shipper and that will be made clear in the bill of lading.

Original Bill of Lading

Documentary credits such as letters of credit or bills of exchange are a common feature of import / export trade.

If you are an importer and payment is to be made by either of these, an original bill of lading will be sent to your bank together with other documents relating to the shipment. Once you have signed an authorisation paying or a commitment to pay for the goods (acceptance) the documents will be released to you. You are then able to use the bill of lading to take possession of the goods on their arrival at your home port.

It is important to note that only an original bill of lading will enable you to do this. A copy bill of lading will not be sufficient to enable the carrier to release the goods to you.

Alternatives to a Bill of Lading

Shipment of goods or merchandise by sea always calls for a bill of lading where documentary credits form part of the transaction. If however that is not the case or if they are to be shipped by air a waybill substitutes or for shipment by road; a consignment note or trucking receipt.

Unlike a bill of lading a carrier can accept instructions to deliver the consignment to the intended recipient as stated in the waybill, without first confirming title to the goods by having the consignee produce a matching original before delivery can be made.

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