Bill of Lading

Bill of Lading Definition

Bill of Lading is a transport document, which serves as a receipt for goods contract to transport using ocean mode. Below key points should be keep in mind regarding Bill of Lading. Bill of Lading is a major shipping documents that proves the amount and mode of shipment.

1) Full set of BL should be submitted.
2) Bill of Lading should be drawn /endorsed to the order of issuing bank.
3) “Shipped on Board” “Freight Prepaid” etc. marked on B/L.
4) Name and address of the Notify Party (ies) should be mentioned or not as per L/C stipulation.
5) B/L must indicate the name and capacity of the party i.e carrier of
master, on whose behalf the agent is signing the BL.
6) “Shipped on Board notation show the name of intended vessel
7) Short form Bill of Lading (BL) is not acceptable.
8) Third party Bill of Lading should not be submitted if it stipulated in LC
9) Charter party BL should not be submitted if it stipulated in the LC.
10) Description of goods in BL agree with that of invoice and packing list.
11) Alteration on BL must be authenticated.
12) Loaded on Deck (goods shipped on deck-unless stipulate in the LC)
13) Claused (unclean) bill of lading.
14) ON BOARD notation in Bill of lading should be mentioned.
15) Shipment effected from port other than the stipulated in the credit.
16) Certificate notifying insurance company of shipment presented
17) Shipping marks and numbers not differ between documents
18) Bill of lading must evidence/indicate whether freight is paid or not
19) Forwarder’s cargo receipt should be avoided (unless provided in LC)

Negotiable V’s. Non-Negotiable Bill of Lading

Whether a B/L would be negotiable or non negotiable depends on the phraseology used in the TD under the space meant for consignee which again depends on the decision of the shipper. If the words used are “to order” or “or his or their assigns”, then the TD is “negotiable”. When such words are not inserted, then the TD is “non-negotiable.”

Liner Party Bill of Lading:

Liner BLs are issued by shipping companies in respect of goods carried on regular line vessels with scheduled runs, and reserved berths at destination. Shipping lines serving the same routes may form a conference, within are made over such matters as the terms and conditions of BL, freight rates, times of sailing, etc.

Charter Party Bill of Lading:

A “Charter Party” is a contract under which a ship owner agrees place his ship, at the disposal of a merchant or other person (Charterer), for the carriage of goods from one port to another (voyage charter) or to let his ship for a specified period (time charter). There are basically two types of charter parties: demise (ship owner only provides vessel) and non-demise (ship owner provides both vessel and crew). A banker should also seek “sea-worthiness certificate” of the charter-party vessel.

Forwarder’s Certificate of Receipt:

It is the receipt issued by a freight forwarder as a carrier or multimodal transport operator or as an agent of a carrier or multimodal transport operator for goods received from shippers. Whether a BL would be negotiable or non- which agreements.

Transport Document:

Transport documents give proof of shipment/carriage of goods from port of loading/place of receipt to port of discharge/place of destination. Usually, transport documents are the documents of title of goods and act as the evidence of contract for the carriage or transportation of the goods between the shipper and the carrier.

Transport Document Content

-Name of the carrier and be signed
– On board notation.
– Place of receipt, port of loading, port of discharge and place of delivery.
-Description of goods consistent with that in the credit.
-Identifying marks and numbers (if any).
-The name of the carrying vessel or the intended carrying vessel.
-The names of shipper, consignee (if not made out ‘to order’) and the name and address of any notify’ party.
-Whether freight has been paid or is still to be paid.
-The number of originals issued to the consignor if issued in more than one original.
-Terms and conditions of the carriage.
-Date of issuing the documents.

Transport Documents Types:

Usually a transport document assumes the form of either
# Single Modal Transport Document
# Multimodal Combined Transport Document.
The former is that type of transport document which is normally applicable to a carriage of goods only by one mode (such as air, rail, waterway etc.). The Multimodal Transport document is applicable for the carriage of goods by more than one mode of transport. This document may indicate either dispatch or taking in charge of the goods or loading on board as the case may be. Transshipment is normally allowed for multimodal transport document. The various forms of Single Modal Transport Documents are the following-
# Marine/Ocean B/L
# Charter Party B/L
# Air Transport Document
# Road, Rail or Inland Waterway Transport Document
# Courier and Post Receipts.
Some documents commonly used in relation to the transportation of goods, namely, Delivery Order, Forwarder’s Certificate of Receipt, Mate’s Receipt etc. do not reflect a contract of carriage and are not transport documents according to UCP-600 rules (19-25).


Transshipment generally means transfer and reloading from one mode of transport to another mode of transport or from one vessel to another vessel within the same mode of transport. A transport document indicating that the goods will or may be transshipped is accepted provided that the entire carriage is covered by one and the same T/D. Moreover, even after prohibiting transshipment under BL, a transshipped BL is acceptable, if the goods are shipped in a container, trailer or LASH barge.

Bill of Lading Related Terms

Short Form/Blank Back BL: BL in which the detailed conditions of transportation are not listed in full (on the back of the BL).
Mate’s Receipt: When the goods are handed over to the agent of the shipping company for shipment by a specified vessel and the agent contracts to do so, he issues a receipt known as Mate’s Receipt. When the goods are actually shipped the Mate’s Receipt is exchanged for the regular BL.
Notify Address: Address mentioned in the BL or Airway Bill to which the carrier is to give notice regarding the arrival of goods.
On Board BL: It is issued after the goods have been shipped on board. A credit requiring BL must indicate that the goods have been shipped on board.
Received for Shipment BL: This document merely confirms that the carrier has received the goods for shipment and is holding the goods in its custody
Clean Vs. Not Clean TD: A clean TD is one which bears no clause or notation which expressly declares a defective condition of the goods and/or the packaging. Otherwise, it is not a clean TD. (Art.-27). A bank will only accept a “Clean” transport document.

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