If you are transporting some goods as ocean freight as a shipper or receiving cargo as a consignee, you will often hear the shipping term “bill of lading”. What functions does a bill of lading have?
A bill of lading is the most important document when shipping internationally.
Sea transportation has a very long history and over the years a bill of lading has played an important role in maritime transport. In the long history of shipping industry, a bill of lading has acquired an important function as a receipt of the goods being transported without which the consignee is unable to receive the goods. It is also a document that indicates the contract made between the shipper and the carrier and also the liability of the carrier. In fact when cargo is at sea, it is exposed to all kinds of danger and risks and it is necessary for carriers to protect themselves from liabilities caused by marine accidents by stating their limitation of liability.
A bill of lading has a function of receipt of cargo.
Firstly and importantly a bill of lading has the function of a receipt for the goods.
This is the very first role a bill of lading played and originally this was the main function and its importance has increased over the years. Principally, a bill of lading is a document in which the carrier or its agent acknowledges that they have received the merchandise described for sea transport from the shipper. The carrier is required to issue bill of lading to the shipper after they have received the goods.
What are indicated on a bill of lading?
When the goods are loaded to a vessel and the vessel has left the port of departure, the carrier acknowledges the receipt of the merchandise onboard by issuing a bill of lading. The descriptions of the goods must be indicated on the document and if there is no remark of damage, such a bill of lading is called “clean bill of lading “ and basically it proves that outer packages had no visible damage when the transportation was initiated whereas if there are some apparent damage on the packages, it must be indicated. It is important that the document states whether the carrier received the goods in a good condition or there were some visible damage to the cargo when they received them. A bills of lading also indicates the number of boxes, the weight and the volume as well as the shipping mark and the contact information of the parties involved in the transaction. Having said a bill of lading testifies that the carrier received the cargo, it does not mean they checked the contents.
Another function of the bill of lading is to provide an evidence that the contract of sea carriage and while defining the obligations of the carrier it also indicates the liability as well. In this sense a bill of lading is like a ticket proving the contract and conditions of carriage.
Needless to say, the bill of lading is the most important and frequently used document when shipping cargo internationally by sea. It states three important things. One is the conditions of carriage. The second one is a statement that the cargo was received by the carrier. Finally it also indicates whether there was any damage at the time they carrier received it,
Important points of a bill of lading：
- A bill of lading is required when a consignee receives the goods at the final destination of shipping. Although the original bill of lading must be submitted to have the shipment released, one can have a surrender bill of lading issued. What is a surrender bill of lading? A surrender bill of lading is a form of a bill of lading and it means that no original is required. If a surrender bill of lading is issued, there is no need for the shipper to send the original to the consignee. The consignee can use a copy the shipper sends.
- In the case of multi-modal transport, i.e. one single carrier arranges sea transportation and then also arranges inland transportation either by truck or rail to the final destination, a bill of lading is often called “multimodal bill of lading”.
Information which must be indicated on a bill of lading
On a Bill of lading the following information must be indicated.
– Name of the shipper.
– Name and address of the carrier and its destination office or breakbulk agent.
– Name of the first vessel leaving the country of the departure
– Name and address of the consignee (This can be the actual consignee, a customs broker or a bank.)
– Notify party (A second party to be notified of the arrival. It can be a bank or a custom broker.)
– Port of embarkation and disembarkation and the final destination.
-Brief description of the goods preferably with an HS code.
-If the shipping charges are paid by the shipper or by the consignee.
-The number of the bill of ladings issued. Normally three.
Conclusion
A bill of lading is an important document when a cargo is transported via ocean. Not only it has important information such as who to contact when cargo arrives at the destination, the number of packages and other details of cargo, it is also a document without which the consignee is unable to receive the cargo.