What is Bill Of Lading in Shipping?

A bill of lading is a record of traded goods which have been received on board. It is a document that establishes an agreement between a shipper and a transportation company for the transportation of goods. Transportation Company (carrier) issues these records to a shipper. A bill of lading indicates the particular carrier through which the goods have been placed to their final destination, and the conditions for transporting the shipment to its final destination. Land, ocean and air are the means used for bills of lading.

The Importance of Bills of Lading

The carrier need not require all originals to be submitted before delivery. It is therefore essential that the exporter retains control over the full set of the originals until payment is effected or a bill of exchange is accepted or some other assurance for payment has been made to him. A bill of lading, therefore, is a very important issue when making shipments. On one hand it is a contract between a carrier and shipper for the transportation of goods and on the other hand it serves as a receipt issued by a carrier to the shipper.

Credits: jibi44/wikipedia.org

Credits: jibi44/wikipedia.org

Types of bill of lading

Below are the descriptions of types of bill of lading:-

1. Straight bill of lading reveals that the goods are consigned to a specified person and it is not negotiable free from existing equities. It means any endorsee acquires no better rights than those held by the endorser. This type of bill is also known as a non-negotiable bill of lading; and from the banker’s point of view this type of bill of lading is not safe.

2. Order bill of lading is the bill uses express words to make the bill negotiable. This means that delivery is to be made to the further order of the consignee using words such as “delivery to A Ltd. or to order or assigns

3. Bearer bill of lading is a bill states that delivery shall be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery.

4. Surrender bill of lading works under a term ‘import documentary credit’, the bank releases the documents on receipt from the negotiating bank but the importer does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading. (SBL)

5. A clean bill of lading is one which states that the cargo has been loaded on board the ship in apparent good order and condition. Such a bill of lading will not bear a clause or notation which expressively declares a defective condition of goods and/or the packaging. The opposite term is a soiled bill of lading. It reflects that the goods were received by the carrier in anything but good condition.

You may also like to read Ship brokers.

References: wisegeekallamericatrans


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  1. JackyS says

    Great article. I work for a company that ship merchandise to department stores and one of my job is to verify and transmit an ASN. An ASN is an advance shipping notice. It is similar to an BOL but it is transmitted in an advance to the customer so they know what merchandise, order, PO#, sku, etc… they will receive (before the box or carton arrives in their docking station).

    We also submit a BOL (manually created) to the trucker who receive the cartons and load it on his truck.

  2. Touseef says


    I would like your positive guide on when and why we need “Switch Bill Of Lading ?
    Please guide me in a easy way with some examples since I am a newcomer in Logistics Field.

    Thanks & regards

    Touseef –

  3. RAMCHAND says

    carrier issued 3 orignal. and if surrnder one orignal to carrier, what will be tatus of other 2 orignals? pls be guided

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