Bill of Lading

Bill Of Lading

Summary of Bill Of Lading

A document issued by a carrier to a shipper acknowledging receipt of the goods, and stating the points of pick-up and delivery, as well as other information relative to value declared for carriage, terms and conditions of transport, freight charges, et cetera. The bill of lading is the most fundamental of all documents in the transport of goods, although the form of the bill varies substantially among different modes of transport (such as rail and water) and from carrier to carrier. All bills of lading have two features in common: (1) they serve as a receipt from the carrier for the merchandise; and (2) they are contracts of carriage between the carrier and shipper. Commonly, short form bills are used; these do not include full terms of the contract of carriage but incorporate them by reference. Bills that include the full text of the contract of carriage are long form bills. Bills of lading may be negotiable or nonnegotiable. Bills that are consigned to order of a named party may be transferred by endorsement and delivery in the same manner as a check. The endorsement and delivery of a bill of lading serve to transfer title to the goods named in the bill. Although the law provides for the use of negotiable bills of lading on domestic rail and motor shipments, the use of such instruments is rare; virtually all domestic shipments move under nonnegotiable, or straight, bills of lading. Negotiable bills of lading are widely used in connection with international shipments by water. Bills of lading for air shipments (generally known as air waybills) are never negotiable. As a practical matter, it is the shipper of the goods who actually prepares the bill of lading, presenting it to the carrier for validation or signature when the goods are taken up for shipment. If the carrier signs off on the bill without any notation that the count is incorrect or that the merchandise is damaged or distressed, the bill is said to be clean-, any bill bearing notations of damage or incorrect count is unclean or foul.

In the case of merchandise that is dangerous, fragile, or peculiar in size or shape, the carrier may be obliged to stow the goods or handle them in a manner more apt to cause loss or damage; bills of lading covering such shipments are often claused with statements relieving the carrier of responsibility for loss or damage in transit. For example, shipments of flammables by sea are stowed on deck to permit ready access and discharge overboard in the event of fire; any bill covering such a shipment will bear the clause “On Deck at Shipper’s Risk”or words of like import. Claused bills of lading are unclean bills and are not acceptable for shipments where payment is expected under a letter of credit unless the credit expressly authorizes the use of such bills (see figures, next pages).

(Main Author: William J. Miller)

Definition of Bill of Lading

In accordance with the work A Dictionary of Law, this is a description of Bill of Lading : A document acknowledging the shipment of a consignor’s goods for carriage by sea (Compare sea waybill). It is used primarily when the ship is carrying goods belonging to a number of consignors (a general ship). In this case, each consignor receives a bill issued (normally by the master of the ship) on behalf of either the shipowner or a charterer under a *charterparty. The bill serves three functions: it is a receipt for the goods; it summarizes the terms of the contract of carriage; and it acts as a document of title to the goods. A bill of lading is also issued by a shipowner to a charterer who is using the ship for the carriage of his own goods. In this case, the terms of the contract of carriage are in the charterparty and the bill serves only as a receipt and a document of title. During transit, ownership of the goods may be transferred by delivering the bill to another if it is drawn to bearer or by endorsing it if it is drawn to order. It is not, however, a *negotiable instrument. The responsibilities, liabilities, rights, and immunities attaching to carriers under bills of lading are stated in the Hague Rules. These were drawn up by the International Law Association meeting at The Hague in 1921 and adopted by an International Conference on Maritime Law held at Brussels in 1922. They were given effect in the UK by the Carriage of Goods by Sea Act 1924 and so became known in the UK as the Hague Rules of 1924. They were amended at Brussels in 1968, effect being given to the amendments by the Carriage of Goods by Sea Act 1971. The Rules, which are set out in a schedule to the Act, apply to carriage under a bill of lading from any port in Great Britain or Northern Ireland to any other port and also to carriage between any of the states by which they have been adopted. Every bill issued in Great Britain or Northern Ireland to which the Rules apply must state that fact expressly (the clause giving effect to this requirement is customarily referred to as the paramount clause). The Hague Rules were completely rewritten in 1978 in a new treaty known as the Hamburg Rules, which drastically alter the privileged position of a sea carrier as compared to other carriers, but they have not yet been generally adopted.

Bill of Lading (B/l) in International Trade

Meaning of Bill of Lading (B/l), according to the Dictionary of International Trade (Global Negotiator): A transport document issued or signed by a carrier evidencing a contract of carriage acknowledging receipt of cargo. This term is normally reserved for carriage by vessel (marine or ocean bill of lading) or multimodal transport. All B/Ls must indicate the date of issue, name of shipper and place of shipment, lace of delivery, description of goods, whether the freight charges are prepaid or collect, and the carrier’s signature. A bill of lading is, therefore, both a receipt for merchandise and a contract to deliver it as freight. There are a number of different types of bill of lading.

B/L on board: Confirms the shipment of the goods in the ship, incorporating the text document “on board”. This type of bill of lading is the most common form of issue.

B/L received for shipment: means that the goods have been received for transportation by the indicated date, but it has not been shipped. Usually used in the multimodal transport deliveries, confirming the date on which the container has reached the end of the first carrier.

B/L nominative: Issued on behalf of a person or a company, which may collect the goods prior identification and presentation of at least one original of B/L.

B/L to the order: in this type of bill of lading the owner of the goods is the possessor of the original documents that can convey the property to another by endorsement, making nominative or simply endorsing the document as “bearer”. This is the bill of lading most used with letters of credits where the bank is listed as the consignee of the goods, and endorse the documentation to his client, who is the importer.

B/L to the bearer: is issued without identifying the owner of the goods that will be the one that holds the original documentation.

B/L house: is a document issued by the freight forwarder and non-negotiable. Not acceptable in banking operations. It is only in shipments where either the exporter or the importer assumes full management of the international sale.

B/L express: issued by the freight forwarder, allows delivery of the goods at destination with simple photocopies, i.e. the original document is not required for any procedure. It is useful in cases of full trust between seller and buyer as well as rapid transit maritime operations.

Clean B/L: is a bill of lading where the carrier has noted that the goods have been received in apparent good condition (no apparent damage, loss, etc.).

Dirty B/L: a bill of lading with a notation to the effect that the goods have been partially/wholly lost or damaged.

Direct B/L: a bill of lading for direct transport between loading and discharging ports.

Stale B/L: a bill of lading which is presented late (for letter of credit purposes, a B/L must be presented within a certain number of days the shipment.

In the bills of lading it is common to find a variety of concepts abbreviated by acronyms that refer to information on weights, costs, charges, services, etc., which may be requested by the buyer or inserted by the shipping company as identification of the shipping characteristics. Also called marine bill of lading and ocean bill of lading. Model of Bill of Lading B/L.

Charter Party Bill of Lading in International Trade

Meaning of Charter Party Bill of Lading, according to the Dictionary of International Trade (Global Negotiator): A bill of lading issued by a charter party. Charter party bills of lading are not acceptable by banks under letters of credit unless they are specifically authorized in the credit. See bill of lading.

Bill of Lading in Private International Law

This section contain conflict of laws information and cross references related to bill of lading on some major countries and additional jurisdictions. It covers key issues involved when citizens face international situations. Information on private international law cases and courts related to bill of lading is provided here. Details on private international law books are available here.

Bill of Lading


See Also

  • Negotiable bill
  • also, Order bill of lading


See Also

Further Reading

  • Francesco Munari, “Bill of Lading”, Encyclopedia of Private International Law, Edward Elgar, 2017