The Bill of Lading is a vital document in the shipping industry to understand its meaning & implications for operation better. The bill is used as a shipment receipt when the carrier delivers products at the predetermined destination. The Bill of Lading has also indicated the carrier through which the products have been placed to reach their destination and the conditions required to transport the shipment. There are 16 various types of Bill of Lading, with each being in particular situations for a specific function. In this write-up, we will discuss various types of Bill of Lading.
Importance of Bills of Lading
Before we discuss different types of Bill of Lading, lets first discuss the importance of Bill of Lading. A BoL is one of the most vital documents in the shipping industry or business. It’s a legally binding document providing the driver & the carrier with all the information required to process the freight shipment & invoice it correctly.
However, a Bill of Lading also serves 3 important duties:
- Receipt of Goods: A Bill of Lading is a document that verifies that products have been received by an agent, 3PL, carrier, or others from one party. When this occurs, in most instances, the organisation or company that takes possession of the commodity is accountable for its condition. This bill provides a paper trail of evidence to support shipping damage claims.
- Evident of Carriage or Shipment: While it is often assumed that a Bill of Lading is simply a contract between the buyer & seller, this is not completely correct. The contract exists when the order is placed-not shipped. The BoL provides evidence that the earlier agreed-upon purchase is being transmitted as agreed upon.
- Title Documentation: This means that whoever holds the Bill of Lading has the title for possession or ownership of the products. This is why the shipper & recipient are both noted on the Bill of Lading.
Using a Bill of Lading is vital not only to protect the assets of a Shipper but also to provide specifics for a carrier to ensure safe & efficient delivery of products.
What is the Primary Purpose of the Bill of Lading?
It’s a document meant to act as a transport document enacting as the evidence of the contract of carriage of the products. A negotiable BoL (Bill of Lading) has the following legal qualities:
- It represents a receipt which endorses that the carrier has received the cargo as per the products and the contract is received in good condition.
- It’s a document of title permitting the sale of goods in transit and raising financial credit.
- Bill of Lading acts as a piece of evidence for the carriage contract containing the terms & conditions under which the products or goods transportation will be carried out.
- Most of the local & international system doesn’t consider a Bill of Lading as a title document. It also provides the right for the delivery to be made to the possessor.
Types of Bill of Lading
Following are different types of Bill of Lading:
- Claused Bill of Lading: This is issued when the cargo is damaged or when the quantity goes missing.
- Master Bill of Lading: This is one of the important types of Bill of Lading, it’s a document that is issued for shipping companies or entities by their carriers as a receipt of transfer. This document specifies the terms that are needed for transporting the freight, details of the shipper or consignor, the consignee & the respective person who possesses the products.
- State Bill of Lading: It is presented for negotiation after 21 days from the shipment date or any other date or number of days stipulated in the documentary credit.
- Order Bill of Lading: This is the bill that expresses words that make the bill negotiable and this explains that the delivery is to be made to the further consignee’s order using terms such as delivery to A Limited to assigns or order.
- Surrender Bill of Lading: It works under the term import documentary credit, where the bank releases documents on receipt from the negotiating bank. The importer doesn’t make the payment to the bank until the maturity of the draft under the relative credit.
- Charter Party Bill of Lading: It’s an agreement between a vessel owner & a charter. The charterer of the vessel issues this to the shipper for the products that are shipped on board the vessel.
- Container Bill of Lading: This is a document that gives details regarding products that are delivered in a safe container/containers from one port to another.
- Clean Bill of Landing: This bill is issued by the Shipping Company/by its agents without any declaration on the imperfect constitution of the products or packages taken on Board or stuffed in containers.
- House Bill of Lading: This is a document issued by an Ocean Transport Intermediary freight forwarder or non-vessel operating company. This document is an acknowledgement of the receipt of products that are shipped and issued to the suppliers when the cargo is received. This is also known as the Forwarders Bill of Lading.
- Straight Bill of Lading: This indicates that the products are consigned to a specific individual and it is not negotiable free from the existing equities. That means that an endorsement acquires no better rights other than those that are held by the endorser. This bill is also known as non-negotiable Bill of Lading. Whereas, from the perspective of a banker, this is one of the types of Bill of Lading which is not safe.
- Bearer Bill of Lading: This is a bill that states that the delivery shall be done by whosoever holds the bill. These bills are particularly created or it is an order bill that doesn’t nominate the consignee in its original form or via an endorsement in blank. A bearer can be negotiated by physically delivering it.
- Short-term or Blank Back Bill of Lading: This is issued when the detailed terms & conditions of the carriage contract are not provided on the body of the BoL or on the back side of the bill.
- Stale Bill of Lading: It is presented for negotiation after 21 days from the date of shipment or any other date or number of days specified in the documentary credit.
- Received for Shipment Bill of Lading: This is a document that is issued by a carrier as an evidence of receipt of goods or products for shipment. It is granted prior to the vessel loading and is therefore not an on-board Bill of Lading.
- Combined Transport Document or Multi-Modal Transport Document: It’s a type of Through Bill of Lading that involves a minimum of 2 different transport modes (ocean or land).
- Forwarder Bill of Lading: It’s a transport document, which is used in sea shipments & multi-modal shipments, issued & signed by a Freight Forwarder, usually on a freight forwarder’s Bill of Lading format, evidences the terms & conditions of the carriage of products or goods as specified by the freight forwarder.
A Bill of Lading (BoL) is an essential document that helps supply chain members move cargo efficiently. There are various types of Bill of Lading documents & each is used for a particular purpose. So, it is important to understand how & when to use these types of Bill of Lading so you can increase the efficiency of your logistics program.
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