Short Form Bills of Lading

cargo shipping vesselBills of Lading are vitally important documents in the shipping and receiving chain. They provide evidence of the contract, a document of title and information regarding the receipt of goods. In short, these bills are the document that provides proof of the entire contract for shipping and receiving. These documents, once established, are non-negotiable and/or non-transferable, the intent being to ensure that cargo is delivered into the proper hands.

The Blank Back Bill
Short form Bills of Lading, also called Blank Back Bills of Lading, are bills of lading that do not include the terms and conditions of shipment on the back side of the bill. In some cases, these short form bills reference a separate document that includes terms and conditions which may or may not accompany the bill to the receiver.

Why These are Rare
Since these bills don’t include terms and conditions, they are comparatively rare, and many receivers prefer the more traditional, long-form bills of lading attached to their industrial packing loads.

Nevertheless, as a negotiable document, short form bills of lading are allowed, and may be requested by the client, if there are no clauses prohibiting the blank back bill in the initial agreement. Such clauses are usually included in the agreed-upon Letter of Credit between the shipper and carrier.

Potential for Abuse
It is important to understand that even if there is a House Bill of Lading between the shipper and customer, the carrier has control of the goods while they are in shipment, and until said carrier releases the shipment. Since short form bills of lading do not by default include the terms and conditions of the shipment, there is the possibility for the carrier to abuse this control power.

In some cases, the carrier has been owed funds for the shipment and has refused to release the cargo until the payment has gone through. There are other less-than-savory cases where the shipper has decided to charge extremely high fees to release the cargo when it reaches its final destination.

Peace of Mind
For this reason, many clients will not accept a short form or blank back bill of lading, and will insist upon the more traditional long form, as the traditional form provides extra protection against abuse by the carrying company.

Having the terms and conditions attached to the bill of lading provides an extra sense of security that the industrial packing shipment will be properly handled from a financial standpoint between shipper, carrier, and client.

In the end, short form or blank back bills of lading are perfectly allowable for negotiation purposes, but many clients will insist that they not be used during the shipping process, instead preferring the more detailed and specific long form bill of lading to protect their interests.

It’s almost never a good idea to allow shortcuts, and shippers should keep a close eye on the procedures under which their industrial packing shipments are sent and received. If you need advice about shipping cargo, we can help—give us a call.