Bill of Lading

What is a Freight Forwarder’s Bill of Lading?

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What is a Freight Forwarder’s Bill of Lading?

A freight forwarder’s bill of lading is a transport document which is issued by a freight forwarder.

It is also known as a house bill of lading.

What Does Freight Forwarder’s Bill of Lading Mean in Export and Import Businesses?

A freight forwarder’s bill of lading (FBL) is a transport document, which is used in sea shipments and multimodal shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What are the Main Features of a Freight Forwarder’s Bill of Lading (FBL)?

  • A freight forwarder’s bill of lading generally issued on a freight forwarder’s bill of lading format. It is also known as house bill of lading (HBL).
  • A freight forwarder’s bill of lading issued and signed by a forwarder without indicating any signing authority either a carrier or as agent of the carrier. In some occasions forwarder companies sign FBLs “as carrier”, especially when their clients require a letter of credit compliant bill of lading.
  • A freight forwarder’s bill of lading (FBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • A freight forwarder’s bill of lading is signed by the forwarder and states the terms and conditions of carriage for the forwarder company’s perspective. FBL does not contain actual carrier’s carriage contract, as a result shipper and consignee stated on the house bill of lading is not a direct participant of the carriage contract indicated on the master bill of lading.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of LadingHouse Bill of Lading
Master Bill of Lading:
Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.		House Bill of Lading:
Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading:
Signed either by the carrier or an agent of the carrier.		House Bill of Lading:
Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading:
Issued on a pre-printed form of an actual carrier's bill of lading.		House Bill of Lading:
Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading:
Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.		House Bill of Lading:
May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading:
States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.		House Bill of Lading:
States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading:
States actual carrier's bill of lading number.		House Bill of Lading:
States forwarder company's bill of lading number.

Forwarder’s bill of lading is also known as house bill of lading.

Is Freight Forwarder’s Bill of Lading Acceptable Under Letters of Credit?

According to the letter of credit rules, unless otherwise indicated in a specific letter of credit, it is possible to present a freight forwarders bill of lading.

But the bill of lading must be issued in accordance with the UCP 600 rules.

As a result if a letter of credit requests a marine bill of lading, it is possible to present a carrier’s bill of lading, forwarder’s bill of lading (house bill of lading in other words) or multi modal bill of lading without any problem, as long as the presented document conforms the respected letter of credit rules.

Important Note: It is not possible to present a charter party bill of lading if a letter of credit requests a marine bill of lading.

Letter of Credit Example with Freight Forwarder’s Bill of Lading Presentation:

Letter of Credit Sample: Field: 46A: Documents Required

  1. Full set of original clean on board ocean bills of lading made out to the order of issuing bank marked freight to be collected and notify applicant indicating this documentary credit number and name, address, telephone no of the carrying vessels agent at the port of discharge.

Option 1: Freight Forwarder’s bill of lading presented which is signed as carrier

Forwarder's bill of lading presented which is signed as carrier

The exporter presented a freight forwarder’s bill of lading, which is signed “as carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as a carrier and signed by the same company as carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Option 2: Freight Forwarder’s bill of lading presented which is signed as agent for the carrier

Option 2 : Forwarder's bill of lading presented which is signed as agent for the carrier.The exporter presented a freight forwarder’s bill of lading, which is signed “as agent for carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as agent for the carrier and signed by the same company as agent on behalf of the carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Important Note: If Freight Forwarder’s Bill of lading is not signed one of the methods explained above, then banks may raise a discrepancy called “Carrier Not Identified or Bill of Lading not Signed as per UCP“.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

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Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)

Understanding the differences between a master bill of lading and a house bill of lading in export and import transactions.

What Does a Master Bill of Lading Mean in Export and Import Businesses?

A master bill of lading (MBL) is a transport document, which is used in sea shipments, issued and signed by a sea cargo carrier or its agent, generally on a pre-printed carrier’s bill of lading format, evidences the terms and conditions of the carriage of goods between port of loading to port of discharge.

What Are the Main Features of a Master Bill of Lading (MBL)?

  • A master bill of lading generally issued on a pre-printed bill of lading form of an issuer carrier.
  • A master bill of lading issued and signed by a carrier or an agent on behalf of the carrier.
  • A master bill of lading (MBL) is issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • A master bill of lading is signed by the actual carrier and states the terms and conditions of the carriage, as a result consignee may have a better protection in case the goods are damaged or lost in transit.

Figure 1: Master Bill of Lading Sample (Carrier: Maersk Line) Figure 1 : Master Bill of Lading Sample (Carrier : Maersk Line)

What Does a House Bill of Lading Mean in Export and Import Businesses?

A house bill of lading (HBL) is a transport document, which is used in sea shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What Are the Main Features of a House Bill of Lading (HBL)?

  • A house bill of lading generally issued on a freight forwarder’s bill of lading format.
  • A house bill of lading issued and signed by a forwarder without indicating any signing authority either carrier or as agent of the carrier. In some occasions forwarder companies sign HBLs “as carrier”, especially when their clients require a bill of lading compliant to the letter of credit conditions.
  • A house bill of lading (HBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • House bill of lading is signed by the forwarder, and it states the terms and conditions of carriage for the forwarder company’s perspective. A house bill of lading does not contain actual carrier’s carriage contract, as a result the shipper stated on the house bill of lading is not identified in the actual carrier’s contract.

Figure 2: House Bill of Lading Sample

Figure 2 : House Bill of Lading Sample

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of LadingHouse Bill of Lading
Master Bill of Lading:
Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.		House Bill of Lading:
Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading:
Signed either by the carrier or an agent of the carrier.		House Bill of Lading:
Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading:
Issued on a pre-printed form of an actual carrier's bill of lading.		House Bill of Lading:
Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading:
Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.		House Bill of Lading:
May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading:
States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.		House Bill of Lading:
States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading:
States actual carrier's bill of lading number.		House Bill of Lading:
States forwarder company's bill of lading number.

What are the Differences Between Air Waybill and Bill of Lading?

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Differences Between Air Waybill and Bill of Lading

What Does Bill of Lading Mean in Export and Import Businesses?

Bill of lading (B/L) is a transport document, which is used in port-to-port sea shipments, issued and signed by a carrier or its agent, generally on a pre-printed carrier’s bill of lading format, evidences the terms and conditions of the carriage of goods between port of loading and port of discharge.

What are the Main Features of a Bill of Lading (B/L)?

  • A negotiable bill of lading represents the title of the goods and normally has to be surrendered at the port of discharge to the carrier’s agent to obtain delivery of the goods.
  • A bill of lading is regarded as a negotiable document if issued “to order and black endorsed” or “to order of a (named party)”.
  • A bill of lading issued and signed by a carrier or an agent on behalf of the carrier is called a master bill of lading.
  • A bill of lading issued and signed by a freight forwarder is called a house bill of lading.
  • There are certain differences exist between a master bill of lading and house bill of lading.
  • A bill of lading generally issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
  • Because a bill of lading is used in port-to-port sea shipments, it can be used in conjunction with all the trade terms defined in Incoterms 2010 rules.

Figure 1 : Bill of Lading Sample

Figure 1 : Bill of Lading Sample

What Does Air Waybill Mean in Export and Import Businesses?

An air waybill (AWB) is a transport document, which is used in air shipments, issued and signed by an airline cargo carrier or its agent, generally on a pre-printed air waybill format, evidences the terms and conditions of the carriage of goods over routes of the airline carrier(s).

What are the Main Features of an Air Waybill (AWB)?

  • An air waybill, contrary to bill of lading, is not a document of title, as a result it is not a negotiable document. The carrier’s agent delivers goods by approving the identity of the consignee without requesting surrender of the original air waybill.
  • An air Waybill is not a negotiable document as a result it cannot be issued “to order and black endorsed” or “to order of an issuing bank”. An air waybill can only be consigned to a “named company”.
  • An air waybill can be issued and signed by a carrier or an agent on behalf of the carrier.
  • Alternatively it can be issued and signed by a freight forwarder. But carrier air waybill and forwarder air waybill have some differences. For more information please read my article “What is the difference between MAWB (Master Air Waybill) and HAWB (House Air Waybill)?“
  • An air waybill generally issued subject to Warsaw Convention, Hague amendment, Montreal Convention, etc.
  • An air waybill should be used in airport-to-airport shipments, as a result it cannot be used in conjunction with the incoterms available only sea shipments such as FAS, FOB, CFR and CIF. For further information please look at “What happens if a letter of credit calls for a wrong Incoterms?“.

Figure 2 : Air Waybill Sample

Figure 1 : Master Air Waybill Sample

What are the Differences Between Air Waybill and Bill of Lading?

Air WaybillBill of Lading
Air Waybill:
Air waybill should be used in air shipments.		Bill of Lading:
Bill of lading should be used in port-to-port sea shipments.
Air Waybill:
Air waybill is not a document of title.		Bill of Lading:
Negotiable bill of lading is a document of title. At least one original bill of lading must be surrender to collect the goods from the carrier.
Air Waybill:
Air Waybill cannot be issued "to order and black endorsed" or "to order of an issuing bank".		Bill of Lading:
Bill of lading can be issued "to order and black endorsed" or "to order of an issuing bank".
Air Waybill:
Air waybill generally issued subject to Warsaw Convention, Hague amendment, Montreal Convention, etc.		Bill of Lading:
Bill of lading generally issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Air Waybill:
Air waybill cannot be used in conjunction with the incoterms available only sea shipments such as FAS, FOB, CFR and CIF.		Bill of Lading:
Bill of lading can be used in conjunction with all of the incoterms available.

L/C Demands a B/L Stating That All Original B/Ls Must be Surrendered

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Bill of Lading Stating That All Originals Must be Surrendered

A negotiable bill of lading is a bill of lading where the consignee’s name is preceded by the words “to order,” thus allowing the consignee to endorse the bill of lading to another party, thereby transferring title of the relative goods to another party. (1)

The importer has to present at least one original copy of the negotiable bill of lading to the carrier’s agent at the port of discharge in order to receive goods from the carrier.

What happens if letter of credit requests presentation of all original bills of lading to the carrier as follows?

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Question Comes from Heidi, Hayward, California, USA:

Can you please take a look at the following L/C language for the required documents of the B/Ls and confirm this will be manageable with the steamship lines?

  • Full Set of clean on board bills of lading made out to the order of opening bank and marked “freight prepaid” and notify applicant.
  • Bills of Lading to show the name and address and telephone/fax numbers of shipping company/agent representing them at port of destination.
  • B/L to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Please advise.

Thank you,

Answer:

Thanks for your question.

Above letter of credit condition, which can be evaluated as a standard format, used by many banks under field 46-A: Documents Required.

The only part that you should be careful is the following one:

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all 3 sets of original bills of lading.

Apparently the issuing bank would like to say:

  • Bill of lading to clearly indicate that the goods can only be delivered at destination port only on submission of all original bills of lading.

The problem with above condition is that it contradicts surrender clauses of the most, if not all, bills of lading in circulation as can be seen on below image.

surrender clause of a bill of lading
Surrender clause of a typical negotiable bill of lading used in port to port container carriages.

Each original negotiable bills of lading is equally represents the title of goods, as a result when one them surrendered to the carrier, the remaining ones becomes void.

For this reason it is highly recommended either correction or deletion of this clause from the letter of credit.

Sources:

  1. International Trade Procedures: A guide to doing business abroad, Wells Fargo Bank, Page: 70

How to Determine Date of Shipment on a Bill of Lading?

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How to determine date of shipment on a Bill of Lading

Date of shipment is one of the key definitions in a letter of credit transaction. It is used to determine

  • whether shipment made on time or not (in other words a late shipment has been effected or not)
  • whether documents presented within the presentation period or not (in other words a late presentation has been effected or not)
  • maturity date of the time draft
  • maturity date of a deferred payment letter of credit.

Date of shipment on a bill of lading can be determined in two ways.

In the first scenario, we will face a situation where a bill of lading does not contain any dated shipped on board notation.

In the second scenario, we will be having a bill of lading which contains a dated shipped on board notation.

Option 1 => There is no shipped on board notation exists on the bill of lading:

  • The date of issuance of the bill of lading will be deemed to be the date of shipment.

Option 2=> Bill of lading indicates, by stamp or notation, a shipped on board date:

  • Notation date will be deemed to be the date of shipment as specified below: Date of shipped on board notation/stamp => this date will be deemed to be the date of shipment

Example: On the below figure, you can see a shipped on board notation which is located on the bottom of a bill of lading. As there is a dated on board notation exist on the bill of lading, date of shipment will be deemed to be this shipped on board notation date which is 14.May.2018.

Date of shipment on a bill of lading

What Does Full Set of Bills of Lading Mean?

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What does full set of bill of lading mean?

Under an ordinary letter of credit, the issuing bank demands a full set of clean shipped on board ocean bills of lading from the beneficiary.

But what is a full set of bill of lading according to the letter of credit rules? How does a beneficiary make sure that he presents a full set of bills of lading?

Most of the transport documents, that is subject to international transportation, issued in more than one originals.

For example, a CMR road consignment note is issued in 3 original copies. The first copy for the exporter, the second to accompany the goods; and the third for retention by the carrier. (1)

Understanding the Reasons Behind the Issuance of Multiple Original Transport Documents:

International transport documents can be classified under two main groups: Negotiable transport documents and non-negotiable transport documents.

 

Multiple Original Transport Documents

Negotiable transport document is a title of goods, such as an original bill of lading, which can be transferred to another party by endorsement.

At least one original negotiable transport document must be surrendered to the carrier by the consignee at the place of destination to collect the goods.

Negotiable transport documents are issued in more than one originals in order to prevent lost of documents.

Non-negotiable transport document is a not a title of property and the consignment is placed at the disposal of the stipulated consignee against a proof of identity without further need to surrendering any original transport document.(2)

Non-negotiable transport documents are issued in more than one originals mainly for operational purposes as some of the original copies of these documents are traveling with the goods.

Full Set of Ocean Bills of Lading Under a Letter of Credit

According to the letter of credit rules, a bill of lading is to indicate the number of originals that have been issued and all of the originals stated on the bill of lading have to be presented by the beneficiary to the issuing bank, unless otherwise indicated in the credit.

For example, container carriers issue bills of lading in a set of 3 original and 3 copies as an established tradition for decades.

The letter of credit rules taking into account only the original bills of lading as a transport document by disregarding the non-negotiable copies.

Example:

  • A letter of credit issued asking for a full set of clean ”shipped on board” negotiable bill of lading showing freight prepaid made out/endorsed to the issuing bank, notifying the issuing bank and the applicant with full address.
  • The bill of lading indicated that it has issued in 3 originals.
  • The beneficiary has presented all of the 3 originals as a full set of bills of lading.

Important Note: The beneficiary could have presented 3 originals and 3 copies of the bills of lading without any problem.

Letter of Credit Rules:

UCP 600 – Article 20 – Bill of Lading
iv- Be the sole original bill of lading or, if issued in more than one original, be the full set as indicated on the bill of lading.

ISBP 2007 – Full set of originals Paragraph 93
As per UCP 600 article 20 transport document must indicate the number of originals that have been issued. Transport documents marked “First Original”, “Second Original”, “Third Original”, “Original”, “Duplicate”, “Triplicate”, etc., or similar expressions are all originals. Bills of lading need not be marked “original” to be acceptable as an original bill of lading. In addition to UCP 600 article 17, the ICC Banking Commission Policy Statement, document 470/871(Rev), titled “The determination of an ‘Original’ document in the context of UCP 500 sub-Article 20(b)” is recommended for further guidance on originals and copies and remains valid under UCP 600. The content of the Policy Statement appears in the Appendix of this publication, for reference purposes. (Please keep in mind that ISBP 2007 has been updated and is not the effective version as of July 2013.)

References:

  1. The CMR Convention, The British International Freight Association (BIFA) Website, Retrieved: 21.06.2018
  2. Shipping and Incoterms, Practice Guide, UNDP Practice Series, Page:50

Clean on Board Notation on Bills of Lading

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clean on board

What is clean on board?

A clean transport document or a “clean on board” clause relates to the condition of the goods and/or packaging.

If, on receipt of the goods, the carrier finds that the packaging or the goods are defective, he will make a notation on the transport document to this effect to avoid being subsequently held responsible for such defect.

Hence, the document is no longer clean, and any objections or claims for damages will have to be directed to the consignor. (1)

If the word “clean” appears on a bill of lading and subsequently it has been deleted, the bill of lading will not be deemed to be claused or unclean unless it specifically bears a clause or notation declaring that the goods or packaging are defective.

Clauses or notations on the bills of lading, which expressly declare a defective condition of the goods or packaging are not acceptable by the letter of credit rules.

Clauses or notations which do not expressly declare a defective condition of the goods or packaging (e.g., “packaging may not be sufficient for the sea journey”) do not constitute a discrepancy.

However, a statement on the transport document declaring that the packaging “is not sufficient for the sea journey” would not be acceptable.

One of my reader is asking below question from Belgium. She is director of a shipping company. She would like to know more about clean on board notations on bills of lading.

We have a persistent shipper who insists to have the word ‘clean’ added before shipped on board in their B/Ls. Have tried to explain that a B/L without clauses/remarks is a clean B/L. Can you refer to a certain part on your website where I can find official explication to convince them ?

Thanks in advance.

director of XYZ Shipping Company

Dear Director,

I can suggest you to inform below UCP 600 article to your shipper.

UCP 600 – Article 27

Clean Transport Document

A bank will only accept a clean transport document. A clean transport document is one bearing no clause or notation expressly declaring a defective condition of the goods or their packaging. The word “clean” need not appear on a transport document, even if a credit has a requirement for that transport document to be “clean on board”.

UCP 600 defines below documents as transport documents :

  • Transport Document Covering at Least Two Different Modes of Transport
  • Bill of Lading
  • Non-Negotiable Sea Waybill
  • Charter Party Bill of Lading
  • Air Transport Document
  • Road, Rail or Inland Waterway Transport Documents
  • Courier Receipt, Post Receipt or Certificate of Posting

References:

  1. Documentary credits in practice, Reinhard Längerich, Second edition – 2009, Published by: Nordea, Page: 146
  2. Shipping and Incoterms, Practice Guide, UNDP Practice Series, Page:12

What are the differences between received for shipment bill of lading and pre-printed shipped bill of lading?

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What are the differences between received for shipment bill of lading and pre-printed shipped bill of lading?

There are two types of bills of lading circulating around the globe in terms of pre-printed notifications:

  • Received for shipment bills of lading: Goods have been received by the carrier but not on board of a named vessel.
  • Shipped on board bills of lading: Goods have been received by the carrier and laden on board of a named vessel.

Received for Shipment Bill of Lading:

This bill of lading states that goods are received by the carrier in apparent good order.

Unless received for shipment bill of lading contains an additional “on board notation”, it does not confirms that the goods have been shipped on board to a named vessel.

Traditionally, received for shipment bills of lading does not give enough assurance to the banks in letter of credit, bank guarantee or standby letter of credit transactions.

Banks prefer to have a pre-printed shipped on board bills of lading.

Alternatively received for shipment bill of lading can be accepted with an “On Board Notation“.

Received for Shipment Bill of Lading Example:

Received for shipment bills of lading clause can be seen on the face of the bill of lading generally at the right bottom side of the page.

Without an additional on board notation, received for shipment bill of lading does not confirm that goods shipped on board a named vessel.

RECEIVED by the Carrier from the Shipper in apparent good order and condition unless otherwise indicated herein, the Goods, or package(s) said to contain the Goods, to be carried subject to all the terms and conditions herein.

Pre-Printed Shipped Bills of Lading:

Pre-printed shipped bills of lading not only confirm that goods have been received by the carrier, but also they have been shipped on board of a named vessel.

Banks accept pre-printed shipped bill of lading in trade finance transactions such as under commercial letters of credit, bank guarantee or standby letter of credit operations.

Pre-Printed Shipped Bill of Lading Example:

Pre-printed shipped bills of lading clause can be seen on the face of the bill of lading generally at the right bottom side of the page.

Pre-printed shipped bill of lading will be accepted by banks under most trade finance solutions.

Pre-printed shipped bill of lading confirms that goods shipped on board a named vessel as required by the letter of credit rules.

SHIPPED, as far as ascertained by reasonable means of checking, in apparent good order and condition unless otherwise stated herein, the total number or quantity of Containers or other packages or units indicated in the box entitled “Carrier’s Receipt” for carriage from the Port of Loading (or the Place of Receipt, if mentioned above) to the Port of Discharge (or the Place of Delivery, if mentioned above), such carriage being always subject to the terms, rights, defenses, provisions, conditions, exceptions, limitations, and liberties hereof (INCLUDING ALL THOSE TERMS AND CONDITIONS ON THE REVERSE HEREOF NUMBERED 1-26 AND THOSE TERMS AND CONDITIONS CONTAINED IN THE CARRIER’S APPLICABLE TARIFF) and the Merchant’s attention is drawn in particular to the Carrier’s liberties in respect of on deck stowage (see clause 18) and the carrying vessel (see clause 19).

Bill of Lading

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bill of lading

The transport document covering the carriage of goods by sea is called a bill of lading. B/L is the most frequently used abbreviation of the bill of lading.

Actually, the bill of lading is the generic name of the transport document, which is used in sea shipments.

There are several types of bills of lading in circulation such as multimodal bill of lading, charter party bill of lading and non-negotiable bill of lading etc. Each type of bill of lading has unique characteristics.

On this page you can find information regarding the bill of lading that is mostly used containerized, port to port shipments.

Although most banks define this type of bill of lading as marine bill of lading or ocean bill of lading, we better to use the exact definition from the letter of credit rules and call this transport document simply as bill of lading.

What are the Functions of a Bill of Lading?

The bill of lading is the authentic receipt delivered by a carrier, confirming that the goods therein specified (markings, types of goods, number of packages, etc.) have been loaded or taken in charge for loading on a designated vessel for carriage to a specified port. (1)

A bill of lading is an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify it, stating the name of the consignor, the terms of the contract for carriage, and agreeing or directing that the freight be delivered to the order or assigns of a specified person at a specified place. (2)

functions of a bill of lading

The bill of lading fulfills three basic functions :

  • bills of lading are receipts for the goods;
  • bills of lading evidence the terms of the contract of carriage (by way of clauses usually printed on one side of the document);
  • they are said to be “negotiable documents of title” (except for the nominative or “straight” bill of lading) (3)

Important Note: Letter of credit rules, UCP 600, define the bill of lading as a transport document used only port-to-port sea shipments. Which means that you can not use the bill of lading with air or land shipments. Also if transportation take place more than one mode of transport, then letter of credit should call for a multimodal bill of lading or combined bill of lading.

How to Use Bill of Lading in Letters of Credit Transactions:

The rules related to the multimodal bill of lading can be found under article 20 of UCP 600.

A bill of lading, however named, must appear to:

  1. indicate the name of the carrier and be signed by:
    • the carrier or a named agent for or on behalf of the carrier, or
    • the master or a named agent for or on behalf of the master.
  2. indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit by:
    • pre-printed wording, or
    • an on board notation indicating the date on which the goods have been shipped on board.
  3. indicate shipment from the port of loading to the port of discharge stated in the credit.
  4. be the sole original bill of lading or, if issued in more than one original, be the full set as indicated on the bill of lading.
  5. contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back bill of lading).
  6. contain no indication that it is subject to a charter party. (4)

Special Hints Regarding the Bill of Lading From ISBP (International Standard Banking Practice):

  1. To comply with UCP 600 article 20, a bill of lading must appear to cover a port-to-port shipment but need not be titled “marine bill of lading”, “ocean bill of lading”, “port-to-port bill of lading” or similar.
  2. If a credit requires presentation of a bill of lading (“marine”, “ocean” or “port-to-port” or similar) covering sea shipment only, UCP 600 article 20 is applicable.
  3. If a credit states “Freight Forwarder’s Bill of Lading is acceptable” or uses a similar phrase, then the bill of lading may be signed by a freight forwarder in the capacity of a freight forwarder, without the need to identify itself as carrier or agent for the named carrier. In this event, it is not necessary to show the name of the carrier.

Bill of Lading Example?

You can find a bill of lading example below, that is evidencing a frozen meat shipment from Poland to Saudi Arabia.

bill of lading example

Multimodal Bill of Lading

Ozgur Eker (CDCS) Bill of Lading, Letter of Credit Documents ,
multimodal bill of lading

Multimodal transportation is the movement of one unit load from origin to destination by several methods or transportation under one document without breaking up the unit load.

A very good example of a multimodal transportation is that containers loaded in continental Europe travel by train to Rotterdam, then ship on a vessel to Dar Es Salaam, then are delivered inland in Tanzania by truck. (Source: UNDP Shipping and Incoterms Practice Guide, Page: 6)

Multimodal bill of lading is a transport document that is evidencing more than one mode of transport, one of which is typically by sea shipment, although it is not required.

Bill of lading for combined transport is another name of the multimodal bill of lading.

MMBL (Multimodal Bill of Lading) or MMTD (Multimodal Transport Document) are the most frequently used abbreviations.

Types of Multimodal Transport Documents:

Multimodal bills of lading can be classified under two main types: multimodal transport bill of lading and through bill of lading.

types of multimodal bill of lading

Multimodal Transport Bills of Lading: These types of multimodal bills of lading are issued by a multimodal transport operator and mostly printed on FIATA (International Federation of Freight Forwarders Associations) standard pre-printed form.

Multimodal transport operator (MTO) means any person who concludes a multimodal transport contract and assumes responsibility for the performance thereof as a carrier for the whole journey.

Through Bills of Lading: Through Bills of Lading are virtually identical to the Multimodal Transport Bills of lading but with one major difference.

The Multimodal Transport Bill of Lading is issued by the Multimodal Transport Operator (MTO) (shipping lines, freight forwarders, NVOCC Operators) who takes responsibility of the goods (e.g. shortages, losses, damages) during the entire period of transport, thus not only for the sea passage but also for the other transport modes as well.

The Through Bill of Lading is issued by the sea carrier but the carrier states on the contract of carriage that he is only responsible of the goods for that part of the carriage he takes care of, such as the sea passage only. (Source : www.maritimeknowhow.com )

How to Use Multimodal Bill of Lading in Letters of Credit Transactions:

The rules related to the multimodal bill of lading can be found under article 19 of UCP 600.

A transport document covering at least two different modes of transport (multimodal or combined transport document), however named, must appear to:

  1. indicate the name of the carrier and be signed by:
    • the carrier or a named agent for or on behalf of the carrier, or
    • the master or a named agent for or on behalf of the master.
  2. indicate that the goods have been dispatched, taken in charge or shipped on board at the place stated in the credit.
  3. indicate the place of dispatch, taking in charge or shipment and the place of final destination stated in the credit,
  4. be the sole original transport document or, if issued in more than one original, be the full set as indicated on the transport document.
  5. contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back transport document).
  6. contain no indication that it is subject to a charter party. (Source : UCP 600)

Special Hints Regarding the Multimodal Bill of Lading From ISBP (International Standard Banking Practice):

  • In all places where the term “multimodal transport document” is used within this document, it also includes the term combined transport document.
  • A document need not be titled “Multimodal transport document” or “Combined transport document” to be acceptable under UCP 600 article 19, even if such expressions are used in the credit.
  • If a credit requires presentation of a transport document covering transportation utilizing at least two modes of transport … the transport document must not indicate that shipment or dispatch has been effected by only one mode of transport.

Multimodal Bill of Lading Example:

You can find a multimodal bill of lading example below, that is evidencing a soybean shipment from USA to Japan.

multimodal bill of lading example

Above multimodal bill of lading evidencing both road and sea transportation. It is most probably issued by a freight forwarder, because of the fact that the transport document has been signed “As CARRIER”.