Bill of Lading: Definition, Template, Q&A
Bill of Lading, B/L for short, is the most important shipping document in international trade. The content below shows B/L definition, a sample B/L template with detailed explanation, and several related questions and answers you may have.
The following information will help you better understand this term, and make your ocean freight more smoothly. Lets begin.
(i) Explanation: A B/L is issued by the carrier or their agent to the shipper or their agent in exchange for the receipt of the cargo. Its the proof that the carrier has received the goods from the shipper or their agent in apparent good order and condition.
(ii) Explanation: The contract between a shipper and the carrier is established when the shipper or their agent made a booking with the carrier (ocean shipping line and air shipping line) to carry the cargo from A to B. And the B/L is the evidence.
(iii) Explanation: Technically, it means that whoever is the holder of the B/L has the title to the cargo or the rights to claim the cargo.
The legal basis for Bills of Lading is known as the Hague-Visby Rules. It defines the obligations of the carriers (carefully load, handle, stow, carry, keep, care for, and discharge the goods carried” and to “exercise due diligence to … make the ship seaworthy) and the shippers (pay freight, pack the goods sufficiently well).
Its complicated from a legal perspective. You can just define it as ‘a ticket for your goods, and this ticket is necessary & important, thats enough.
- It is evidence of the goods being shipped
- It is evidence of the goods being in apparent good condition when shipped
- It is evidence of the contract of carriage, and a promise by the carrier to deliver the goods
- It is a negotiable document which can be used to transfer the ownership of the goods named on it to somebody else
- In international trade where payment by Letter of Credit is arranged, a clean B/L is required by the banks before any payments will be made
A Sample Template
Please note that each shipping line or airline has their own B/L format, but the parts that need to be filled up are almost the same. Learning from this template form will be enough for you to complete or understand a B/L for your freight shipping work.
Its the shippers responsibility to make sure the information listed on the B/L is the exact accurate and same as the buyers request. Lets look into this form further one by one.
Questions and Answers
Q: How many types of B/L?
By mode of transport:
- Seaway Bill of Lading, or Ocean Bill of Lading (OBL for short)
- Airway Bill of Lading (AWB for short)
- Combined Transport Bill of Lading or Multimodal Transport Bill of Lading
By Issued Party:
- Master Bill of Lading, by the carrier (shipping lines or airlines)
- House Bill of Lading, by the agent or freight forwarder
By Issued Form:
- Original Bill of Lading
- Telex Released Bill of Lading
Q: Whats telex released B/L means?
Telex Release, aka Express Release, means a message that is sent by the shipping line or their agent at loading port to their office or agent at destination port advising that, the shipper or exporter has surrendered one or all of the original bills of lading that have been issued to them, and that the cargo can be released to the consignee shown on the B/L without presentation of any original bills of lading.
This is a method to speed up documentation delivery. But please note:
- Some shipping lines do not allow Telex Release and insist only on the original as part of their policy.
- Certain countries like Colombia, do not allow Telex Release and cargo can be released only against presentation of the original to Customs.
- Shipper applies for electric B/L from the freight forwarder, and issues the electric guarantee paper, indicates that all the consequences and responsibilities of the electric B/L are undertaken by the shipper.
- Then freight forwarder asks the shipping company for electrical B/L issuing, and provides the guarantee paper.
- The shipping company receives the B/L application and guarantee paper therefor inform the destination port, to allow this shipment can be used electric B/L instead of the original B/L.
- The shipping company issues the electric B/L or to the freight forwarder, or an email receipt forwarded. It depends on different carriers.
The evidence can be the email receipt or an electronic version of B/L showing surrendered or telex released. Then the consignee can show this evidence to the carriers branch or port agent at the destination, instead of the original paper B/L.
Q: How do I choose: Original vs Telex Release?
We suggest try to express release every shipment if possible, though release fee is higher than courier cost for the original delivered from China to your country. Your Chinese supplier will cover either of them based on FOB.
- Release at the loading port is faster, especially the destination is not far away, such as Japan, Korea, Southeast Asia, West Coast of America. Theres not much sufficient time for a courier delivery in some cases.
- Release at the loading port is safer. Its very annoying when the original has lost during the transit. A new set of originals can be obtained from the carrier, but the process is so complicated. It cost both time and money.
Q: What is B/L endorsement?
Endorsement means stamp and signature in the back of the B/L. It applies to “TO ORDER OF” listed under the consignee column, such as TO ORDER OF XXX COMPANY or TO ORDER OF XXX BANK.
TO ORDER OF XXX = TO THE ORDER OF XXX = ORDER OF XXX
TO ORDER = TO THE ORDER = ORDER
|Consignee Type||Endoresent Type|
|To order of shipper||shipper|
|To order of XXX company||XXX company|
|To order of XXX bank||XXX bank|
If the consignee listed on the B/L shows the straight company, no needs for an endorsement.
Q: How do I know if the B/L a Master B/L of House B/L?
The short answer of distinguishing Master B/L and House B/L is to find out which party is issuing the B/L.
House B/L is the cargo transportation contract the centralized shipper and the real shippers; while the Master B/L is the transportation contract between the carriers and the centralized shippers cargo transportation contract.
You can find the carriers logo on all Master B/L. The shipping lines and airlines are well known and easy to identify.
Please note that all LCL and almost all combined transport use House B/L.
Q: Whats the difference between Master B/L and House B/L?
|Master B/L||House B/L|
|Issued by||carriers||freight forwarders|
|Shipper||freight forwarder||real shipper|
|Consignee||freight forwarder||real consignee|
|Document of Title||Yes||No|
|Process at POD||directly with carrier||change to MBL first|
The real shippers and the carrier dont have a direct contractual relationship. You have to face the issued party and pay them at the destination. Sometimes, you have to pay more confused charges in House B/L. Because they are not as official as the shipping lines or airlines.
But House B/L has its own advantages. You can use HB/L for freight collect, privacy protection or anti-dated.
Q: How long can I get my B/L if importing from China?
The carriers will issue the B/L once the vessel has actually departed from the loading port, which means the same day as departure.
It will take 1 or 2 days to your supplier. Then 2~5 days international express to you.
What we are talking about is original B/L. If telex release, you can get the electronic version as soon as the vessel depart.
Q: Can I have more than 3 original Bills of Lading?
Although 3 is the accepted industry standard, the carriers can issue as many originals as you require as long as the face of the ladings bears the number of originals issued. (i.e. if you require 5 originals, then the originals must state that 5 were issued).
Q: What does full set of clean B/L mean?
Frequently issuing banks put a phrase like “full set of clean shipped on board ocean bills of lading” on a letter of credit text under field 46-A Required Documents.
Full set: carriers issue bills of lading in a set of 3 original and 3 copies as an established tradition for decades. You should act according to letter of credit rules when you encounter such a phrase in a letter of credit.
Clean: indicating that the goods were received by the carrier in good order and condition, without any clauses declaring a defective condition in the goods and/or their packing.
Be careful sometimes banks demand “3 original 3 copies of bill of lading” or “3 originals 4 copies of bill of lading”. In these cases you should present exactly required originals and copies.
Q: Who verifies the B/L and keep the information same as the actual shipments?
Nobody else except the shipper themselves.
The shipper provides all the data needed on a B/L. When a container is loaded and locked by the shipper, it will be kept closed, unless theres an inspection by the Customs. We know the inspection ratio is very very low. So at most times, all the information is just the same as the shipper said, because no one has the chance to open a container and see whats actually in there.
Its a safe method for cargo shipping. On the other side, few shippers will scam the buyer by this way.