Bill Of Lading: what it is and how to fill it out
What is the Bill of Lading?
The Bill of Lading (B/L) is a basic document of the transportation industry, used in domestic and international shipping.
The Bill of Lading certifies:
- The boarding of the goods in a specific ship at a specific port.
- The carrier taking over of the shipment of that cargo to a predetermined destination port.
The carrier takes responsibility for delivering the cargo in good condition.
According to the Navigation Code, the Bill of Lading, signed by both parties, is a binding contract with obligations and conditions stated on the back of the document, which has several functions:
- It constitutes proof of the agreement between the parties: carrier and shipper.
- It is valid as a cargo receipt.
- It guarantees the existence and nature of the goods described in the contract of carriage.
- It gives the person in possession of the original bill of lading also possession of the goods and thus the right to collect them at destination and the possibility of disposing of them for transfer to third parties by endorsement.
- It allows goods to be sent to multiple recipients by creating as many delivery orders as there are recipients.
The Bill of Lading is, therefore, a negotiable, representative of the goods and fractionable title.
Bill of Lading: who issues it?
The Bill of Lading is issued by the shipping company, in three originals, normally distributed as follows:
- One copy remains with the shipper as proof of carriage or in case of dispute.
- One copy to the carrier for handling the cargo during transport.
- One copy to the consignee to collect the goods at the port of arrival.
The B/L therefore is sent by the company (or the issuer) to the rightful claimant (sender), who will in turn forward it to the consignee of the goods only once the consignee has proceeded with payment.
There are cases, however, where a full set (3/3 originals) is required for a bank negotiation or at the express request of the supplier of the goods, and in special cases a larger number may be issued.
The bill of lading can be:
- Nominative: the name of the person who will collect the goods at the port of destination is indicated in the document.
- Bearer: the document does not identify the owner of the goods transported.
In both cases, therefore, the goods can be picked up only upon delivery of the bill of lading, and if the original is lost, the recipient may be denied delivery. Once one of the originals is used, the remaining two lose their validity (except for special constraints).
How to fill out a Bill of Lading
The bill of lading must be completed in its entirety, mandatorily including:
- Name and address of the shipper (or forwarder), i.e., the sender of the goods.
- Name and address of the carrier, i.e., the person in charge of the transport.
- Name of the recipient of the goods if the B/L is nominative.
- Description of the goods:
- Nature, quality, and quantity of the items sent.
- Number of packages and weight.
- Value and conditions of return.
- Name of the ship on which the goods are loaded.
- Exact indication of the port of departure.
- Exact indication of the port of arrival.
- Indication of any ports of transshipment (transhipment).
- Date of departure of the ship (day, month, and year).
Another fundamental element that must be present on the Bill of Lading is the annotation “goods on board” dated and signed by the captain of the ship. If not, the document would have no value as a bill of lading but would become a simple receipt.
Bill of Lading: some typologies
In this area of mandatory documents, there are many details and shades that bring with them specific terminologies. Let us look at the main ones together.
Master Bill of Lading
The Master Bill of Lading (MBL) is a document used in maritime transport issued by the carrier, i.e. the shipping company, to the person who entrusted it with the cargo:
- To the exporter: the sender, who also organises the forwarding.
- To the shipper: if the exporter has entrusted the shipment to an intermediary who takes care of it on his behalf.
The purpose of the Master Bill of Lading is therefore to certify the taking-over of goods pertaining to multiple shipments. This document can be issued for shipments:
- FCL (Full Container Load): when the container is filled by a single shipper or loaded with goods all for the same consignee.
- LCL (Less than Container Load): in the case where a container contains several loads from different shippers with several consignees.
This transport document is not significant for either the exporter or the recipient, as both will refer to the bill of lading for the specific shipment, issued for them by the shipper.
House Bill of Lading
The House Bill of Lading (HBL), therefore, is always consequential to the Master Bill of Lading, or rather, to the presence of a figure intermediating the forwarding, the shipper. This document, in fact, is issued by the shipper for the benefit of the exporter as a receipt for taking charge of the goods and usually contains:
- Exporter’s details.
- Recipient’s details.
- Shipped cargo.
- Terms of payment.
- Shipper’s contact details.
Clean Bill of Lading
This is a characteristic of any bill of lading: it must be clean, meaning that it must not contain reservations, indications about the condition of the goods such as damage to packaging, goods, seals, etc.
In this case, the 3 original copies of the Bill of Lading are printed and stored in the home office of the shipping company. With the approval of all parties, the shipper authorizes the shipping company to “destroy” the set of originals and do a so-called “telex release” with a digital copy of the policy. This saves the cost of the express courier to physically send the original policies to the recipient, and most importantly, there is no risk of losing the originals.
Once the Bill of Lading is confirmed in all its details by the shipper, the printing of the set of 3 originals is not done, as is usually the case, but only copies with also digital validity are produced. Obviously in this case there must be maximum trust between the parties, as there is no possibility of having control over the release of the goods at destination. The advantage is that it saves both the cost of printing the original set and sending it by express courier.
Through Bill of Lading
“Through Bill of Lading” means a direct or cumulative policy and is no longer used; it could be issued in the case of a transport performed by different modes by several carriers or when the place of pick-up or drop-off of the goods was different from the port of destination. In this case each ocean carrier took responsibility only for the section under its jurisdiction.