Bills of Lading are the main transport document used by carriers, worldwide. There are over 40 different varieties of bill of lading, meaning that it is important for you to know which type is being used by your carrier.

In this guide, we will give you an overview for 5 of the main types of bill of lading, and general rules for release.

What is the purpose of a Bill of Lading?

A Bill of Lading is used during the carriage of goods for 3 main purposes:

–       The Bill of Lading is evidence that the carrier has been contracted to carry the goods on behalf of the organiser. This includes lawful conditions of carriage or trading.

–       The Bill of Lading serves as a receipt to the organiser that the goods have been received by the carrier for transport.

–       The Bill of Lading can be a document of title to the goods, depending on the type of bill that has been used.  

What information is needed on a Bill of Lading?

A Bill of Lading needs to show clear information on your shipment so that all parties know what is being carried (and in case you need to use it in a claim).

The following information should be displayed clearly on the bill:

–       Name, address, and contact details of the shipper (Consignor).

–       Name, address, and contact details of the receiver (Consignee).

–       Name, address, and contact details of the carrier.

–       Name, address, and contact details of the party to be notified on arrival at the port of destination.

–       Name of the vessel.

–       Name of the place of receipt/loading.

–       Name of the port of departure.

–       Name of the port of arrival.

–       Name of the final destination.

–       Description of the goods, including:

o  Number of packages.

o  Weight of goods.

o  Identifying marks.

o  Condition of the cargo.

–       Terms of payment:

o  If the freight is prepaid, it will state “Prepaid”.

o  If the freight is not prepaid, it will state “Collect”.

–       Number of Original Bills of Lading (OBLs) that have been issued.

On the back of the Bill of Lading, there will be the terms and conditions for the carriage. Note that these are completely separate to your chosen INCOTERM for
the shipment.

Types of Bill of Lading

There are over 40 different varieties of Bill of Lading, but most can be split between 2 groups that relate to title: negotiable and non-negotiable.

–       Negotiable Bills of Lading are documents of title, and permit ownership of the goods to be transferred through endorsement of the bill.

–       Non-negotiable Bills of Lading are not documents of title, and serve only as a receipt of the goods and evidence of contracted carriage.

Ocean Bills of Lading

An ocean Bill of Lading is issued by the carrier and covers your transport from the port of loading to the port of destination. Inland carriage is not included in this contract.

Through Transport and Combined (Multimodal) Bills of Lading

Through Transport and Combined (Multimodal) Bills of Lading cover the same types of movement, but give you different options for liability with the carrier. This is important for you as you will need to know what parts of transit you need to obtain additional insurance for.

Through Transport Bills of Lading

A Through Transport Bill of Lading may include inland transport, whether this is before or after the ocean carriage.

If the collection is included in your carrier’s responsibilities, then this will be indicated with a different “Place of Receipt” location to the “Port of Loading”. This is to qualify that the goods have been received by the carrier before being placed at the port of loading.

If the delivery is included in your carrier’s contract, then this will be indicated with a different “Final Destination” to the “Port of Arrival”.

On a Through Transport Bill of Lading, the carrier is only liable for the goods whilst they are onboard the vessel. Additional insurance is recommended for the carriage outside of this mode.

Combined (Multimodal) Bills of Lading

A Combined Bill of Lading may include inland transport, whether this is before or after the ocean freight.

If the collection of the cargo is contracted by the carrier, this will be indicated by the “Place of Receipt” location being different to the “Port of Loading”. This is to qualify that the goods have been received by the carrier before being transported to the port of loading.

If the delivery of the cargo is included in your carrier’s responsibilities, then this will be indicated by the “Final Destination” being different to the “Port of Arrival”. This shows that the carriage is not over once the cargo has reached port.

On a Combined Bill of Lading, the carrier is liable for your goods during the entire carriage, meaning that claims need only be raised to them.

House Bills of Lading

House Bills of Lading (HBLs) are raised by Non-Vessel Owning Cargo Carriers (NVOCCs), who are responsible for the carriage of your goods but contract out the freight to on a Master Bill of Lading (MBL) to another carrier.

House Bills of Lading are commonly used when an NVOCC is responsible for multiple stages of a journey, like on a Combined Bill of Lading, but the carrier for the MBL is only responsible for part of the total carriage.

For example, if you are using the DAP INCOTERM there may be an agent responsible for the delivery and clearance of the goods at origin who require payment of the full transit before release, but the MBL with the ocean carrier will only require payment to port. The agent will have a seaway bill with the ocean carrier so that they control the release, and collection cannot be done by the Consignee without the agents approval.

Seaway Bills of Lading

Seaway Bills of Lading, also known as Express Bills, do not require endorsement or lodging of the bill of lading to obtain release from the carrier. This is because seaway bills are non-negotiable and hold no title to the goods.

Express Bills of Lading are often used in conjunction with a House Bill of Lading so that there is no delay on release to the agent, with the House Bill of Lading being processed and delivered to the Consignee during the payment process. 

Original Bills of Lading (OBLs) can also be changed to Seaway bills by surrendering all of the originals to the carrier at origin, who will then issue a telex release to their agent at destination to indicate that an OBL is not required.

How bills can be consigned and released

How a Bill of Lading is consigned will dictate on who can obtain release from the carrier, and how the releasee needs to be nominated. 

(It is important to note that the “release” being referred to here is the carrier release. You will also need to have completed a customs clearance  with HMRC to collect the goods.)

Bills of Lading can either be “consigned”, “consigned to order of”, or “to order”.

“Consigned” Bills of Lading

Bills of Lading that are consigned will have a named consignee, and they are the only party who can grant authority for release to the carrier. This means that anybody  wishing to obtain release from the carrier must receive a letter of authority, on letter headed paper, from the consignee to present with their release instruction.

Consignees that keep the same agent for their shipments will often have a “blanket release” in place, removing the need for a letter of authorisation on every single shipment.

“Consigned to order of” Bills of Lading

Bills of Lading that are “consigned to order of” still require the consignee to release the goods, but this can be done through endorsement.

A consignee can endorse a Bill of Lading on the back (where the terms are) by writing the name of the party that they are releasing to and then signing, stamping, and dating the name. This transfers the title of the goods to the new party.

Note that endorsing a Bill of Lading solely for the purposes of obtaining release is an incorrect process. If the consignee, or owner of the goods, wishes for their agent to obtain release on their behalf, then they should issue a letter of authorisation for release to the carrier.

“To order” Bills of Lading

“To order” Bills of Lading do not have a named consignee, meaning that the goods do not have a receiver specified until the bill is endorsed. With a “To order” Bill of Lading, the consignor (shipper) holds the title of the goods until they endorse the bill to another party.

The shipper will endorse the Bill of Lading by naming the consignee on the back, then signing, dating, and stamping the endorsement.

Note that endorsing a Bill of Lading solely for the purposes of obtaining release is an incorrect process. If the consignee, or owner of the goods, wishes for their agent to obtain release on their behalf, then they should issue a letter of authorisation for release to the carrier.