To Order

To Order and Blank Endorsed Bill of Lading

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Basics, Letter of Credit Documents ,
To Order and Blank Endorsed Bill of Lading

Bill of lading, which is a transport document used in international trade, is an 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.

On this article you can find the definitions of “to order” and “blank endorsed” terms as used on bills of lading.

To order and blank endorse term is related to the consignee field of a bill of lading and determines if a letter of credit issued in a negotiable or straight form.

If you need more information regarding negotiable bills of lading and straight bills of lading, please read my article “What Does “Made Out to the Order of” Mean in a Bill of Lading?”.

To order bill of lading is the one that consignee part of the bill of lading have been completed by writing “to order” only as can be seen on the below example.

To Order Bill of Lading Example

  • “To order” means that the bill of lading has been consigned to order of the shipper. The shipper indicated on the bill of lading determines who should collect the goods at the port of discharge by surrendering at least one original copy to the carrier.

The shipper makes this determination with the help of the endorsement.

  • “Blank endorsement” means that the holder of the original bills of lading can claim the goods from the carrier at the port of discharge by surrendering at least one original copy of a bill of lading.

To order bill of ladings can be blank endorsed by putting Shipper Company’s stamp and signature on the reverse side of the bill of lading.

According to ICC experts a bill of lading issued to the order of a party can only be endorsed by the party stated in the “consignee” field of the bill of lading.

Only when the B/L is made out to order of the shipper is the shipper able to endorse in blank before presentation under the credit.

As a result,

  • Consignee: to order ==> shipper can endorse in blank
  • Consignee: to order of the shipper ==> shipper can endorse in blank
  • Consignee: to order of the issuing bank ==> issuing bank can endorse

What Does “Made Out to the Order of” Mean in a Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Documents , , ,
Made Out to the Order of

Majority of the letters of credits are asking for a bill of lading which must be issued made out to the order of the issuing bank.

This condition indicated under field “46A – Documents Required” for the letters of credit that are issued in a swift format.

In simple words bills of lading can be classified under two groups: Negotiable bills of lading and non-negotiable bill of lading. Non-negotiable bills of lading also known as sea waybills.

Negotiable bills of lading can also be classified under two main groups. Negotiable bills of lading and straight bills of lading.

  • Negotiable Bills of Lading: Negotiable bills of lading are the ones that have been issued “to order” or “to order of a named party”. If bill of lading has been issued in a negotiable form, then the buyer of the goods need to surrender at least one original bill of lading to the carrier at the port of discharge. In this scenario bill of lading must be endorsed properly.
  • Straight Bills of Lading: Straight bills of lading are the ones that have been issued in a way to consigned a named party. If bill of lading is issued in a non-negotiable form, then the buyer can get the goods either by,
    • surrendering at least one original bill of lading to the carrier at the port of discharge or
    • in accordance with rules of the national law at the port of discharge which may accept the delivery of the goods to the buyer against proof of identity.

Both “to order” and “to order of a named party” statements make a bill of lading a negotiable bill of lading.

Letter of Credit Examples:

  • Example of to order and blank endorsed bill of lading: Full set signed clean on board ocean bills of lading made out to order and blank endorsed marked ‘freight prepaid’ and notify Import Bank of India indicating letter of credit number.
  • Example of made out to order of bill of lading: Full set of original clean on board bill of lading issued to the order of Arab Bank PLC Algeria notify applicant marked freight prepaid.