A Bill of Lading (BL) is one of the essential
documents in logistics, particularly in international ocean shipping. When done
right, a Bill of Lading is a valuable legal asset and a source of crucial
information about the cargo and shipping conditions.
In this article, we will cover the general
meaning of the term and describe the two most common kinds of BL that are used
in global trade: house and master bills of lading.
The definition of a Bill
A BL is a legal document issued by the company
providing cargo shipping. It is proof of business relationship between the two
parties involved in moving the cargo from one place to another. It specifies
the shipper and consignee, cargo description, delivery terms according to
Incoterms, and payment conditions.
What information does a
Here is the list of information that can be
obtained from a standard BL:
- Contact information of the shipper and consignee;
- Place of loading and discharge;
- Cargo size and weight in specified measurement units;
- Full description of the loaded products;
- Packaging description: pallets, barrels, crates, boxes, etc;
- International Maritime Dangerous Goods Code (IMDG) for hazardous cargo.
The importance of a
Bill of Lading
- It confirms the legal ownership of the cargo by a certain entity.
- It has a receipt function and confirms that the exporter loaded the ordered products for transportation.
- When signed by a consignee, it serves as a confirmation that the carrying company has fulfilled its obligations, and the new owner has received the cargo.
- It has all the necessary descriptions of the cargo, which allow the recipient to assess its quantity and quality.
- It contains necessary shipping clauses.
When issued at the place of loading, BL confirms
that the shipper has provided the goods and the carrier has accepted them for
shipment. At destination, the BL serves as a receipt confirming that the cargo
belongs to the consignee and can be released to the company that possesses the
original copies of the BL.
House Bill of Lading: a
The House Bill of Lading (HBL) is issued not by
the main carrier but by the company the shipper turns to for assistance in
arranging the shipment, an intermediary. These would be either freight forwarders
or non-vessel operating companies (NVOCC). Read our post about the difference
between the two here.
The intermediaries issue an HBL as an
acknowledgement that they have received the items from the owner for further
shipment. After that, the freight forwarder or NVOCC books space for the cargo
with the main carrier: ocean shipping lines, airlines, truckers, etc.