Export & Import Documentation
7.4 What to do with a bill of lading
7.4.1 Open account
The shipping line issues and signs the original bills of lading when the goods are on board the vessel. When consignor and consignee are trading on open account (see , Methods of export payment), there are the following stages: (a) The original bill is sent to the exporter. Depending on the relationship with the shipping company and the terms of sale, payment of the freight and FOB charges might be demanded before the bill is released.
(b) The exporter sends the original bills of lading to the consignee. Without the original bill of lading the consignee cannot receive the consignment.
(c) The consignee presents the original bill of lading to the shipping company or their agent in the port of destination, and accepts delivery of the goods. If the freight is payable at destination, the consignee has to pay the freight before the goods are released.
The consignee has the option of endorsing the bill of lading which means the title to the goods passes to another party.
7.4.2 Letter of credit transactions
Bills of lading are an integral part of letter of credit transactions (see Finance for export), and the sequence of events is somewhat different: (a) The original bills are sent to the exporter. Depending on the relationship with the shipping company and the terms of sale, payment of the freight and FOB charges might be demanded before the bill is released. For letter of credit transactions, the box consignee often has the words to order. The box notify party can either be the importer, the freight forwarder or a bank. The exporter endorses the bill of lading.
(b) The shipping line advises the notify party of the impending arrival of the goods. (c) The exporter sends the original bills of lading to the nominated bank together with all the other documents required by the letter of credit.
(d) The opening bank transfers the bills of lading to the party nominated in the notify party box. This party endorses the bills of lading and hands it on to the importer.
(e) The importer then takes delivery of the goods upon arrival. Banks normally insist on having the full set of original bills in their possession.
7.5 Types of bills of lading
7.5.1 Shipped bill of lading
This is one of the most common forms of bill of lading . The bill, when signed, confirms that the goods are on the vessel and have been shipped on board.
7.5.2 Received bill of lading
The received bill of lading confirms that the goods have been received for shipment. Frequently received bills of lading are issued by the shipping lines agents; the goods have not necessarily been shipped, but are required by the exporter for finance.
Problems can sometimes arise with the received bill of lading in that the shipping line might become embroiled in disputes about loss or damage to the cargo before the goods are on the vessel. Equally, the shipper can become confused by the division of responsibilities between the shipping lines agent and the shipping line.
7.5.3 Through bill of lading/combined transport bill of lading
The through bill of lading is growing in popularity, and is widely used when containers are transferred from one shipping line to another or moved from the port inland. The Ocean carrier takes responsibility for the transhipment and selection of the on carrying vessel. The through bill of lading covers the complete journey, and means the shipping line can quote one freight rate to cover the whole journey. The combined transport bill of lading, similar to the through bill of lading, is widely used when more than one mode of transport is used, e.g. road and sea or rail and sea.
7.5.4 House bill of lading
Freight forwarders frequently group several consignments for the same destination together in one container referred to as groupage or consolidation (see ,Transport and International distribution).T he shipping line issues one shipped bill of lading to the forwarder who then issues separate house bills of lading to each consignor. These bills of lading (unless a FIATA multimodal transport bill of lading) do not have the same legal force as a shipping line bill, and might be unacceptable to the bank for a letter of credit transaction.
7.5.5 Clean bill of lading
A bill of lading which remains unclaused is a clean bill of lading. This means the shipping line accepts their full liability under the Hague-Visby Rules .
7.5.6 Negotiable bill of lading
Most bills of lading are negotiable which means they can be endorsed and ownership of the goods then passes to another party. Bills of lading which are non-negotiable usually have the words non-negotiable prominently displayed.
7.4.1 Open account
The shipping line issues and signs the original bills of lading when the goods are on board the vessel. When consignor and consignee are trading on open account (see , Methods of export payment), there are the following stages: (a) The original bill is sent to the exporter. Depending on the relationship with the shipping company and the terms of sale, payment of the freight and FOB charges might be demanded before the bill is released.
(b) The exporter sends the original bills of lading to the consignee. Without the original bill of lading the consignee cannot receive the consignment.
(c) The consignee presents the original bill of lading to the shipping company or their agent in the port of destination, and accepts delivery of the goods. If the freight is payable at destination, the consignee has to pay the freight before the goods are released.
The consignee has the option of endorsing the bill of lading which means the title to the goods passes to another party.
7.4.2 Letter of credit transactions
Bills of lading are an integral part of letter of credit transactions (see Finance for export), and the sequence of events is somewhat different: (a) The original bills are sent to the exporter. Depending on the relationship with the shipping company and the terms of sale, payment of the freight and FOB charges might be demanded before the bill is released. For letter of credit transactions, the box consignee often has the words to order. The box notify party can either be the importer, the freight forwarder or a bank. The exporter endorses the bill of lading.
(b) The shipping line advises the notify party of the impending arrival of the goods. (c) The exporter sends the original bills of lading to the nominated bank together with all the other documents required by the letter of credit.
(d) The opening bank transfers the bills of lading to the party nominated in the notify party box. This party endorses the bills of lading and hands it on to the importer.
(e) The importer then takes delivery of the goods upon arrival. Banks normally insist on having the full set of original bills in their possession.
7.5 Types of bills of lading
7.5.1 Shipped bill of lading
This is one of the most common forms of bill of lading . The bill, when signed, confirms that the goods are on the vessel and have been shipped on board.
7.5.2 Received bill of lading
The received bill of lading confirms that the goods have been received for shipment. Frequently received bills of lading are issued by the shipping lines agents; the goods have not necessarily been shipped, but are required by the exporter for finance.
Problems can sometimes arise with the received bill of lading in that the shipping line might become embroiled in disputes about loss or damage to the cargo before the goods are on the vessel. Equally, the shipper can become confused by the division of responsibilities between the shipping lines agent and the shipping line.
7.5.3 Through bill of lading/combined transport bill of lading
The through bill of lading is growing in popularity, and is widely used when containers are transferred from one shipping line to another or moved from the port inland. The Ocean carrier takes responsibility for the transhipment and selection of the on carrying vessel. The through bill of lading covers the complete journey, and means the shipping line can quote one freight rate to cover the whole journey. The combined transport bill of lading, similar to the through bill of lading, is widely used when more than one mode of transport is used, e.g. road and sea or rail and sea.
7.5.4 House bill of lading
Freight forwarders frequently group several consignments for the same destination together in one container referred to as groupage or consolidation (see ,Transport and International distribution).T he shipping line issues one shipped bill of lading to the forwarder who then issues separate house bills of lading to each consignor. These bills of lading (unless a FIATA multimodal transport bill of lading) do not have the same legal force as a shipping line bill, and might be unacceptable to the bank for a letter of credit transaction.
7.5.5 Clean bill of lading
A bill of lading which remains unclaused is a clean bill of lading. This means the shipping line accepts their full liability under the Hague-Visby Rules .
7.5.6 Negotiable bill of lading
Most bills of lading are negotiable which means they can be endorsed and ownership of the goods then passes to another party. Bills of lading which are non-negotiable usually have the words non-negotiable prominently displayed.
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