The essential about Bill of Lading

A bill of lading is a document issued by a carrier acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified.

Legal function of the bill of lading

• Evidence of Receipt of Cargo

Bills of lading originated are no more than documents issued to merchants by carriers to evidence receipt by the carriers, in good condition, of cargoes shipped on board their vessels.

The words "shipped on board in apparent good order and condition" remain, the most common form of words used to evidence receipt on board a vessel, in good condition, of a shipper's cargo.

• Evidence of a Contract of Carriage

The manner in which bills of lading are issued has dictated their characterisation, generally, as documents that contain or evidence, rather than constitute, contracts of carriage.

In practice, because bills of lading often are transferred, a bill of lading will be the only evidence of the terms of the contract for carriage of the cargo that it covers that is available to a consignee or other transferee of the bill of lading.
Thus, bills of lading in the hands of consignees or other, intermediate or subsequent, transferees often have to be assumed to contain all of the terms of the contract of carriage.

• Document of Title to Cargo

By mercantile custom, both "received for shipment" and "shipped on board" bills of lading have come to be treated as documents of title to cargo.
 
Information on the Bill of lading:

The bill of lading contains detailed terms on matters such as:

• The name of the consignee (in the case of a straight bill of lading)
• The scope of the duties accepted by the carrier in relation to the carriage and discharge of the cargo,
• The duties of the person entitled to the cargo in relation to the payment of freight and the rights
• The duties of the person entitled to the cargo in relation to the discharge and delivery of the cargo
• information specific to the cargo: description and weight or volume of bulk cargoes , dimensions, number and seal numbers of containers in the case of containerised cargoes

Issue of bill of Lading

Bills of lading traditionally have been issued in sets of 3 originals: one to be retained on the vessel, one to be retained by the shipper and one to be sent to the consignee.

 Type of bill of lading:

• Straight bill of lading

A Straight bill of lading is a bill of lading that is not transferable by either delivery or endorsement and delivery. It specifies the name of the consignee.

• Order bill of lading

An order bill of lading is a document that is made out to the order of the foreign importer or its bank, or the order of the export firm, its bank, or another designated party.

Title to goods being shipped is given by possession of the bill of lading that bears the exporter's endorsement. Often, this endorsement is in blank, thus giving ownership of the goods to the person possessing the bill, and therefore making the bill highly negotiable.

• Bearer bill of lading

This bill 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

• Switch bill of lading

A Switch bill of lading is a replacement bill of lading issued at the request of a consignee seller to replace the original bill of lading issued to that seller's supplier as shipper, so as to show the consignee seller as shipper and its own sub-purchaser as consignee.  Such bills of lading are intended to keep the identity of the supplier from the sub-purchaser and thus to prevent future direct dealings between the supplier and the sub-purchaser.

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