What is a bill of lading? What is its purpose?
Most of our customers especially those shipping their vehicles or containers for the first time usually ask us this question at one stage or the other when container shipping or car shipping. But what is a bill of lading? What is its purpose? A bill of lading is one of the most important document in the chain of chipping your container or vehicle.
What is Bill of Lading?
Bill of lading, ( commonly known as Bol or abbreviated as B/L) is a detailed list of a ship’s cargo in the form of a receipt given by the master of the ship to the person consigning the goods.
A bill of lading is a record of traded goods which have been received on board. It is a document that establishes an agreement between a shipper and a transportation company for the transportation of goods. Transportation Company (carrier) issues these records to a shipper.
A bill of lading indicates the particular carrier through which the goods have been placed to their final destination, and the conditions for transporting the shipment to its final destination. Land, ocean/sea and air are the means used for bills of lading.
Purpose of bill of lading
Bill of lading has 3 main purposes.
- Evidence of Contract of Carriage
The B/L is the EVIDENCE of the contract of carriage entered into between the “Carrier” and the “Shipper or Cargo Owner” in order to carry out the transportation of the cargo as per the sales contract between the buyer and the seller.
2. Receipt of Goods
Emphasis on the term “Receipt”.
A B/L is issued by the carrier or their agent to the shipper or their agent in exchange for the receipt of the cargo.. The issuance of the B/L is proof that the carrier has received the goods from the shipper or their agent in apparent good order and condition, as handed over by the shipper
3 Document of Title to the goods
Emphasis on the term “Title”
It means that the goods may be transferred to the holder of the B/L which then gives the holder of the B/L, the rights to claim the goods or further transfer it to someone else.
IMPORTANT POINT TO NOTE ABOUT CONSIGNEE
That is why we always want our customers to make sure they are clear on what it means to put some’s name as consignee. Consignee becomes automatically the person entitled to have the vehicle registered in his or her name. Some customers especially those who do not have professional representatives to give them guidance end up confusing the person who can go to collect as vehicle from the port as the consignee. We have dealt with many family conflicts as a result of this error. In most countries, the consignee becomes the registered keeper of the vehicle.
If you intend to have a vehicle registered in the name of a company, the bill of lading must state the name of the company as the consignee.
Things to be take note of on a bill of lading of a vehicle
It is the responsibility of the shipper to make sure details on the bill of lading are correct. Some customer assume that it is the responsibility of the freight forwarder to make sure vehicle details such as the registration number and vehicle identification number (VIN) or commonly known as chassis number. These details must be exactly the same on the Bill of lading as is on the vehicle registration book (logbok). Any errors noted after closure of time to correct the details on the Bill of Lading, (manifest), usually incurs what is called a manifest corrector fee. This fees is paid by the shipper. So to avoid any unnecesary expenses, care must be taken to double check that all details including the name and surname or company name of the consignee is correct. The name of the consignee must be exactly the same as indicated on the identify document of the consignee (this must include even the second name of the consignee if they have a second name on their identity documents)
If you are not sure about what to do when you get a draft copy of your bill of lading, please contact us for free impartial advice.
Types of bill of lading
Below are the descriptions of types of bill of lading:-
1. Straight bill of lading reveals that the goods are consigned to a specified person and it is not negotiable free from existing equities. It means any endorsee acquires no better rights than those held by the endorser. This type of bill is also known as a non-negotiable bill of lading; and from the banker’s point of view this type of bill of lading is not safe.
2. Order bill of lading is the bill that uses express words to make the bill negotiable. This means that delivery is to be made to the further order of the consignee using words such as “delivery to A Ltd. or to order or assigns
3. Bearer bill of lading is a bill which states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery.
4. Surrender bill of lading works under a term ‘import documentary credit’, the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading. (SBL)
5. A clean bill of lading is one which states that the cargo has been loaded on board the ship in apparent good order and condition. Such a bill of lading will not bear a clause or notation which expressively declares a defective condition of goods and/or the packaging. The opposite term is a soiled bill of lading. It reflects that the goods were received by the carrier in anything but good condition.
