Guides - 03
Bills of lading, explained
The bill of lading is the central document of sea freight. Get it wrong and the cargo, the payment or both can be held up at the other end.
01
Three jobs in one document
- A receipt. The carrier confirms what it received, how many packages and in what apparent condition.
- Evidence of the contract of carriage. Its terms govern the carrier's duties.
- A document of title. In its negotiable form, whoever holds the original, properly endorsed, can claim the cargo.
02
The main kinds
| To order | Negotiable. Made out "to order" or "to order of" a bank or shipper, and transferred by endorsement. Usual under letters of credit. |
|---|---|
| Straight | Made out to a named consignee. Not transferable by endorsement. |
| Master and house | A master bill is issued by the ocean carrier. A house bill is issued by a forwarder or NVOCC (non-vessel operating common carrier) for its own customer. |
| Shipped on board | Shows the goods are loaded, with the on-board date. Credits usually require it. |
| Received for shipment | Issued before loading. Needs an on-board notation to serve as a shipped bill. |
| Clean or claused | A clean bill records no defects. A claused bill notes damage or shortage, and banks will usually refuse it. |
03
How the cargo is released
- Original bills. Usually issued in a full set, often three. One original, surrendered at destination, releases the cargo.
- Surrender or telex release. The shipper surrenders the originals at origin, and the carrier tells its agent to release the cargo without them.
- Sea waybill. No original is needed. The named consignee collects on proof of identity. Not a document of title, so not suited to trades where the cargo is sold or financed in transit.
04
What to check on a draft
- Shipper, consignee and notify party: names and addresses exactly as the contract or credit states.
- Port of loading and port of discharge, and the place of delivery if any.
- Description of goods, marks, number of packages and gross weight, matching the invoice and packing list.
- Freight shown as prepaid or collect, as the Incoterm requires.
- The number of originals, and the on-board notation and date.
05
Where we come in
We draft the shipping instructions, check the carrier's draft against your contract, invoice and credit, and arrange issue through the carrier or a licensed forwarder.
Related
Services that use this
- Bills of lading and sea waybillsThe carrier's receipt and contract, prepared right.
- Letter of credit document checkingDocuments checked against the credit before the bank sees them.
- Full container load (FCL)A container for your cargo alone.
- Breakbulk and general cargoCargo loaded piece by piece, not in containers.
Send us the details.
Tell us the cargo, the route and the dates. We will reply by email with what we can arrange.
