Bill of lading (B/L): meaning

What a bill of lading does

When the carrier takes over the goods, it issues the B/L as a receipt that records the packages, weight, marks and apparent condition. Under the Hague-Visby Rules, which apply in many countries, the shipper can ask for a B/L that shows these details. The B/L also evidences the contract of carriage on the carrier's terms. If it is made out "to order" and issued as originals, it is a document of title: the goods are delivered against an original, and the right to them can be transferred by endorsement.

Common types

A straight B/L names the consignee and cannot be transferred by endorsement; an order B/L reads "to order" or "to order of" a bank or buyer and can be. A house B/L is issued by a forwarder (NVOCC) to the shipper, while the shipping line issues its master B/L to the forwarder. A clean B/L has no clause noting damaged goods or packing, and a shipped on board B/L confirms that the goods were loaded on a named vessel, which letters of credit usually require.

What to check on the draft

Check the shipper, consignee and notify party, the ports, the description, the number of packages, the gross weight and the marks against the commercial invoice and packing list, as well as the freight term (prepaid or collect), the number of originals and, under a letter of credit, every detail the credit asks for. Corrections are easy before the originals are issued and costly after.