What Is a Bill of Lading?

cargo container freight shipping

Whether it’s a short form bill of lading, a long form one, a switch bill of lading, or any other variety, bills of lading are not only commonplace and standard in the transloading industry, they are in fact one of the most essential parts of the shipping and logistics process. Since it holds such a central place in the process, it’s important to understand the bill of lading.

Three Purposes of a Bill of Lading

The bill of lading serves three important roles in the shipping process.

  • Provenance of the Contract of Carriage. While the actual contract is hashed out when the shipper or shipping agent books with the shipping line, the bill is proof that a contract exists.
  • Receipt of Goods. The bill of lading is a receipt given to the shipper in exchange for the cargo. It serves as proof that the carrier has gotten the goods from the shipping agent in good condition.
  • Title to the Goods. The bill of lading serves as a document of title, declaring that the holder has the right to claim the goods. The title itself varies based on the way the bill of lading has been assigned.

Types of Bills

Given the three main roles of the bill of lading in the transloading industry, there are several variations, or types of bill of lading, that can be issued.

  • Straight Bills of Lading: These bills are non-negotiable and non-transferable, having been issued as an original document to a named consignee. With a straight bill of lading, the cargo can only be released to a specific party and then only when the original bill is surrendered.
  • Seaway Bills of Lading: These non-negotiable bills are issued either for inter-company shipments, for shipments where no negotiations are required between different companies, or where the shipper is not required to submit the original bill to obtain payment. With a seaway bill, no original bill is issued, and thus, no surrender is required.
  • Seaway Bills of Lading: These non-negotiable bills are issued either for inter-company shipments, for shipments where no negotiations are required between different companies, or where the shipper is not required to submit the original bill to obtain payment. With a seaway bill, no original bill is issued, and thus, no surrender is required.
  •  Negotiable Bills of Lading: Also known as “Order Bills,” these are issued as originals and can be used with letters of credit to negotiate payments between buyer and seller. These bills contain the terms and conditions of the carrier, and port agents can hold cargo until an issued original bill is surrendered with proper endorsements.

Terms and Titles

In addition to the types of bills, there are various ways in which bills of lading can identify the responsibility of the carrier in relation to the cargo.

  • Port-to-Port: With this term, the carrier has responsibility from the port of loading and the port of discharge, where such responsibility ends.
  • Combined Transport or Multimodal: These bills cover various combined modes of transport from receipt to delivery, when a single contract covers multiple service providers under one carrier.
  • Through Bills: These hold the carrier responsible only during the sea leg and as an agent for arranging inland transport.

 Bills of lading are important documents in the transloading and logistics industry and fill many roles throughout the process, from proof of contract to negotiable document, to defining the responsibilities of the shipper. If you are beginning your own shipping process, we are experts in industrial packaging and crating. Give us a call with any questions you may have.