Bill of Lading: Meaning and Functions

The bill of lading is the main transport document of a sea shipment. It is issued by the carrier or the master when the cargo is loaded.

Three functions

A bill of lading is a receipt that confirms the cargo has been loaded, a piece of evidence of the contract of carriage and, in its original form, a document of title: the holder of the original can claim the cargo at the discharging port and can sell it while it is at sea by passing the document on.

What it says

The ship, the shipper, the consignee, the loading and discharging ports, a description of the cargo, its quantity and condition, and the freight terms. The description must match what was really loaded. A clean bill says the cargo was loaded in good order; a claused bill notes a problem.

Types

An order bill can be passed to a new holder. A straight bill names one consignee. A charter party bill of lading is issued under a charter and refers to its terms. A sea waybill is a receipt without the title function: the cargo is delivered to the named party without an original document.

Bill of lading and the charter

In a charter the master signs the bill of lading, usually on the charterer's request and following the instructions in the charter party; see charter party explained. For the whole path of a cargo read how to ship bulk cargo by sea.

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